isatou's address: #6 Driscoll Court North Potomac 20878 --- Ylva Hernlund <[log in to unmask]> wrote: > ---------- Forwarded message ---------- > Date: Tue, 4 Nov 2003 18:08:28 -0600 > From: [log in to unmask] > To: [log in to unmask] > Subject: Senegal: Debt and Destruction > > > AfricaFocus Bulletin > November 4, 2003 (031104) > > Senegal: Debt and Destruction > (Reposted from sources cited below) > > Editor's Note > > As the U.S. Congress approves $87 billion for the > U.S. occupation > of Iraq, long-standing promises by rich creditors to > provide debt > "relief" of some $49 billion for 42 countries remain > unfulfilled, > and largely off the radar screen for policymakers. > Yet debt remains > a crippling burden not only for the 34 African > countries that > qualify as Heavily Indebted Poor Countries (HIPC), > but also for > major African powers such as Nigeria and South > Africa. > > This issue of AfricaFocus Bulletin contains the > summary of a new > report on Debt and Destruction in Senegal by Dembe > Moussa Dembele, director of the Forum for African > Alternatives. The summary and full report are > available on the website of the World Development > Movement at: http://www.wdm.org.uk > > A separate issue of AfricaFocus Bulletin, also > distributed today, > contains excerpts from a new analysis of the > failures of the HIPC > initiative, released in September by Jubilee > Research. > > +++++++++++++++++++++++end editor's > note+++++++++++++++++++++++ > > October 2003 > > Debt and Destruction in Senegal > A study of twenty years of IMF and World Bank > policies > > By Dembe Moussa Dembele > > Electronic versions of the full report are available > at > http://www.wdm.org.uk > > For hard copies of the full report please contact > [log in to unmask] > World Development Movement > 25 Beehive Place, London SW9 7QR, UK > +44 (0)20 7737 6215 http://www.wdm.org.uk > [log in to unmask] > > Executive Summary > > From the early years of Senegal's Independence up to > the late 1980s > the State played a major role in economic and social > development, > due to the dearth of an indigenous private sector > and the necessity > to meet some of the most pressing needs of the > population. The > legitimacy and stability of the post-Independence > political system > depended in large measure on its ability to satisfy > those needs. > During the 1960s and 1970s, Senegal achieved some > significant > results, thanks to the performance of the > agricultural sector and > the strength of its exports. > > However, by the mid-1970s, a succession of droughts, > combined with > a series of external shocks, led to an economic > downturn. The > country's external debt reached unsustainable > levels, prompting the > government of the day to turn to the International > Monetary Fund > (IMF) and the World Bank. From the late 1970s, until > the present > day, these institutions have dominated economic > policy in Senegal > and in other Sub-Saharan African countries through > what are known > as 'Stabilisation Programs' and 'Structural > Adjustment Programs' > (SAPs). > > The core policies associated with stabilisation and > SAPs are cuts > in public spending; tight monetary and fiscal > policies; export-led > growth; trade and investment liberalisation; > deregulation of > internal prices; dismantling of the public sector; > privatisation of > State-owned enterprises and of essential services; > rolling back the > State and eroding its ability to formulate > autonomous national > policies. > > However, far from rescuing Senegal from its debt > problems, the > implementation of such policies since the early > 1980s has > aggravated the debt burden and undermined the > achievement of > poverty eradication. Debt ratios have literally > exploded, despite > 13 rescheduling arrangements with the Paris Club of > bilateral > creditors since 1981. In 2002, the external debt > accounted for 70 > per cent of the country's Gross Domestic Product > (GDP) and for more > than 200 per cent of its export revenues. In > addition, more than 40 > per cent of the bilateral debt was composed of > arrears, which is an > indication of how unsustainable Senegal's debt > burden has become. > > The deepening of the debt burden ran in parallel > with the > deterioration of the economic and social situation, > due in large > part to the numerous policy conditions attached to > loans made by > the IMF and the World Bank. Sweeping trade > liberalisation and > deregulation combined with the dismantling of the > Senegalese public > sector, from the mid-1980s to the late 1990s, led to > the collapse > of both the agricultural and industrial sectors. The > agricultural > sector, which employs more than 70 per cent of the > population, has > been severely affected by liberalisation and the > dissolution of > many state controlled enterprises (known as > parastatals). As a > result, peasants and small-scale farmers have seen > their > livelihoods deteriorate in the face of the invasion > of the domestic > market by cheap and subsidised imports from > developed countries. > > It is against this background that Senegal entered > into the Heavily > Indebted Poor Countries (HIPC) Initiative, in June > 2000, following > its submission of an interim Poverty Reduction > Strategy Paper > (I-PRSP). Under HIPC, Senegal's debt is expected to > be reduced by > US$850 million, US$488 million in Net Present Value > (NPV) terms, > over a 10-year period. However, reaching the > 'Completion Point' and > receiving this debt relief (which will account for > only 17 per cent > of Senegal's total debt) is contingent upon > fulfilling a range of > structural policy conditions set by the World Bank > and IMF. In > other words, debt relief is being used as yet > another lever with > which the IMF and World Bank can push through more > free market > policy reforms. > > This is despite the evidence that the past twenty > years of IMF and > World Bank policies in Senegal have been > unsuccessful in > significantly reducing poverty. Low or stagnant > economic growth, a > deterioration in some social indicators and only > modest > improvements in others has characterised the period > of 'structural > === message truncated === ===== Yaikah M. Jeng MPhil/PhD candidate LSHTM London __________________________________ Do you Yahoo!? Protect your identity with Yahoo! 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