Economic Liberalization in Senegal: Shifting Politics of Indigenous Business Interests

Abstract

: Analysts of African business in the 1960s and 1970s stressed the weakness of the local private sector and its subordination to foreign capital and the government. Have economic liberalization and the shrinking of the state changed matters? This paper takes up this question in an analysis of Senegal. Here, relations between the state, foreign capital, and indigenous business interests have changed considerably since 1980, signaling what may be some of the most significant shifts in Senegal's political economy since Abdou Diouf's coming to power in 1981. There has been a shift of commercial control away from the state and foreign interests and toward the Senegalese “informal sector,” and clear moves away from the old pattern of clientelist-style relations between Senegalese business and the regime. In this paper, we argue that in spite of changes, the political clout and economic ambitions of Senegalese business interests are still limited by their weak hold on productive sectors of the economy. This is clear in the economic policy fights of the 1990s. Much of the contest is a struggle for commercial-sector advantage that pits old-style politician-businessmen against the “informal sector” commercial interests that have been gathering force in Senegal since the 1970s. These changes seem to have less to do with the emergence of “indigenous capitalism” than with diminution of the regime's ability to constrain and canalize the development of indigenous commercial interests. This paper traces these developments, grounding the analysis of the 1990s in a detailed empirical study of UNACOIS, a sometimes-militant business association that emerged in Dakar in 1990 to represent the Senegalese “informal sector.”

From State Dirigisme to Liberalisation in Senegal: Four Decades of Agricultural Policy Shifts and Continuities

“…Even more violent riots followed the mega-devaluation of the FCFA in 1994 (Vengroff and Creevey, 1997: 213). By the late 1980s, the government had lost the capacity to 'pay for stability' by expanding public sector employment, and to satisfy the demands of different classes and social factions (Coulon and Cruise O'Brien, 1989;Vengroff and Creevey, 1997: 215;Thioub et al, 1998;Diagne, 2004: 81). In the 1990s, however, as the government increasingly lost control over its own policy space, the balance swung even more in favour of the standard Washington consensus recommendations.…”

“…The experience of the 1980s and early 1990s shows the erratic pattern of agricultural policy design, which can be explained by the government's initial reluctance to accept all conditions (Diagne, 2004); the changing balance of power and weakening of PS legitimacy (Coulon and Cruise O'Brien, 1989;Dahou and Foucher, 2004); changing perceptions of adjustment and liberalisation by the different ruling classes and factions (Thioub et al, 1998); the incoherence and inadequacy of most World Bank/IMF reform packages; and the undermining effect of the efforts demanded by Washington institutions on state capacity and policy space. However, this erratic pattern does not justify the conclusion reached in several institutional reports, especially Berg (1990) and Rouis (1994), that structural adjustment and liberalisation were only partially implemented.…”

What drives Senegalese migration to Europe? The role of economic restructuring, labor demand, and the multiplier effect of networks

“…Strong ties of reciprocity and patronage link agents of the state with local businesses and religious or communal organizations (Fatton 1986;Thioub, Diop, and Boone 1998;Galvan 2001). Liberalization further decreased state power and, as the new development model created new constraints and opportunities, individuals mobilized these community-based forms of social capital.…”

“…Formal sector job loss following the 1986 New Industrial Policy was massive, and industrial production declined substantially. In particular, the capital city Dakar experienced a profound transformations of its local labor market, with a severe reduction in highly qualified jobs and substantial job creation in the informal sector from the mid-nineties (Bocquier 1996;Thioub , Diop, and Boone 1998) 7 . Overall, liberalization policies did not produce the expected economic growth and stabilization, although some irregular improvements took place from the late 1990s (Figure 1).…”

“…As a response to the crisis, the government cooperated with the International Monetary Fund and the World Bank to implement several structural adjustment plans, culminating in the drastic devaluation of the currency in 1994 (Duruflé 1988;Collier and Gunnig 1999;Azam 2004;Thioub , Diop, and Boone 1998).…”