THEME – The economic crisis and its impact on Senegal
Objectives
The joint objectives of Conversation Club are to enable cultural exchange through discussion, and to enable the participants to practice using their languages.
The joint objectives of Conversation Club are to enable cultural exchange through discussion, and to enable the participants to practice using their languages.
Everyday indications of the economic crisis
“You don’t need to be an economist to know that there is a financial problem in Senegal today” started one of our participants, “when you step outside the door in the morning and it’s more expensive to buy your breakfast and catch the bus into town, you know there’s a problem”. It was suggested that people in Senegal would suffer less than in other countries as there is more ‘solidarité’. A participant gave an example also of British people who were living in France who have had to leave because of the pound losing so much value against the euro.
At the same time, Senegal is dependent on the international markets, and further to that, its populace, the majority being under the age of 18, is dependent on the state. This means that it is even more difficult for Senegal to work itself out of its own financial difficulties as the majority of the populace is not of tax-paying age, but is requiring state support in terms of education, for example. There is no doubt that the world economic crisis is bad news for this country.
At the same time, Senegal is dependent on the international markets, and further to that, its populace, the majority being under the age of 18, is dependent on the state. This means that it is even more difficult for Senegal to work itself out of its own financial difficulties as the majority of the populace is not of tax-paying age, but is requiring state support in terms of education, for example. There is no doubt that the world economic crisis is bad news for this country.
Why is there an international financial crisis?
Some participants said that the financial crisis was the responsibility of certain individuals and institutions. They pointed to both the people responsible for the supply of oil and its pricing in the Middle East, and the irresponsible lending at banks in the US which had led to the collapse of the housing market there, as the primary reasons. It was suggested that this latter situation had come about as the result of a Bush Administration policy in the US to try and win votes.
Some participants said that the financial crisis was the responsibility of certain individuals and institutions. They pointed to both the people responsible for the supply of oil and its pricing in the Middle East, and the irresponsible lending at banks in the US which had led to the collapse of the housing market there, as the primary reasons. It was suggested that this latter situation had come about as the result of a Bush Administration policy in the US to try and win votes.
The people of Senegal and the developing world are the victims of the crisis as being dependent on the international markets, but incapable of influencing it. Concern was expressed that an international financial crisis impacts more on poor countries and their populations , as these are the people least likely to have the means to ‘ride out’ a recession, ie to have savings or additional funds to deal with hikes in prices.
Food security
It was suggested that Senegal is largely dependent on imports for its food, and therefore price increases are higher. One participant suggested that this issue is known as food sovereignty – where a nation or group of people is responsible for its own food production rather than being at the whim of international markets.
It was suggested that Senegal is largely dependent on imports for its food, and therefore price increases are higher. One participant suggested that this issue is known as food sovereignty – where a nation or group of people is responsible for its own food production rather than being at the whim of international markets.
Some participants said that whilst rice is the primary foodstuff consumed by the Senegalese, and is grown by Senegalese farmers, many people prefer to buy and eat rice that is imported rather than home-grown products.
One person said that the rice which is grown in Matam is not only harder to cook than imported rice, but is more expensive. Food sovereignty isn’t seen as a national issue, though there is a government –backed programme called GOANA which supports the agricultural industries which produce rice, peanuts and other crops. One participant suggested that subsidizing agricultural equipment and supporting the infrastructure to enable better logistics would be a positive step, because many of the traditional methods make homegrown rice prices uncompetitive with those from Asia. There is no subsidy for local rice, though rice is subsidized by other nations. Therefore, homegrown rice cannot compete in the free market. At the same time, however, the government has cancelled imports of onions to protect the internal onion market.
There was some further discussion about people’s desire to work in the field of agriculture, especially for urbanites who would prefer to emigrate rather than move to work in rural locations. This was considered an issue for the future as many ex-agriculture workers have already moved from rural locations due to, for example, the droughts and drops in prices of the peanut market in the 70s and 80s. Whilst there is a lot of agricultural land and it might be physically possible for Senegal to sustain itself, it is clear that at present there is neither the infrastructure nor the manpower to enable this.
Other impacts
One participant said that foreign-owned organizations with subsidiaries in Senegal have started to stop hiring and cutting budgets. There was agreement that these organizations would be unlikely to prioritise spending in developing countries. Impacts in the commercial sector had already been seen, and another participant gave an example of an NGO, which had started to cut down on its aid, necessitating the local office to subsidise medical and food supplies.
It was said that in the US 600 000 people had lost their jobs and foreclosures are at an all time high. Another participant gave an example of friends in Spain who were working in the fields and hadn’t been paid for two months. Many people had personal examples of friends who had moved back from overseas, or who were no longer able to send back the same amount of funds. When nationals were unable to find jobs it was more difficult for immigrants. It was expected that the 500 Billion CFA, which has been the norm in terms of funds sent home from overseas up until this year, can be expected to drop significantly over the next year. In a financial survey carried out in the past few weeks, this trend has already been seen.
One participant said that foreign-owned organizations with subsidiaries in Senegal have started to stop hiring and cutting budgets. There was agreement that these organizations would be unlikely to prioritise spending in developing countries. Impacts in the commercial sector had already been seen, and another participant gave an example of an NGO, which had started to cut down on its aid, necessitating the local office to subsidise medical and food supplies.
It was said that in the US 600 000 people had lost their jobs and foreclosures are at an all time high. Another participant gave an example of friends in Spain who were working in the fields and hadn’t been paid for two months. Many people had personal examples of friends who had moved back from overseas, or who were no longer able to send back the same amount of funds. When nationals were unable to find jobs it was more difficult for immigrants. It was expected that the 500 Billion CFA, which has been the norm in terms of funds sent home from overseas up until this year, can be expected to drop significantly over the next year. In a financial survey carried out in the past few weeks, this trend has already been seen.
The response to the economic crisis
It was felt by some participants that the causes of the economic crisis are less important than what happens in response to it and how we deal with it now. It was suggested that a lack of education means that people don’t know what the proper way to respond is, and that this can deepen the problem. An example was given of ‘runs on the bank’ in western societies. Some participants thought that it was each person’s responsibility to deal with the problem now it is here, though others thought this was unrealistic.
One of the things that was suggested is that the government needs to support and push people to save. Most people do not have bank accounts and Senegalese do not tend to have the culture of saving. Personal wealth could help to support the Senegalese culture in the future.
A further area where the government could help is to support entrepreneurship. It was thought that entrepreneurship is much more a part of Western society and is necessary for economic growth. Senegalese people tend to expect to be given a job by a big organization or the state, but this is unrealistic and a cultural change with more support for entrepreneurship could change this. Research has shown that there are 400 000 private/public sector tax paying jobs in Senegal. There are 100 000 graduates per year looking to enter the job market and only 15% find jobs. It is clear that this situation is untenable for the economy going ahead. One initiative that the government has carried out is to reduce the time it takes now to establish a new company. It is now 48 hours. Apics.sn. Commercial banks are also offering small business support in terms of training and development as well micro-credit grants and business banking. A British participant said that in the UK most small businesses fail and that setting people up for failure by providing the processes but neither the economic climate nor the training to succeed could also be very dangerous.
A further area where the government could help is to support entrepreneurship. It was thought that entrepreneurship is much more a part of Western society and is necessary for economic growth. Senegalese people tend to expect to be given a job by a big organization or the state, but this is unrealistic and a cultural change with more support for entrepreneurship could change this. Research has shown that there are 400 000 private/public sector tax paying jobs in Senegal. There are 100 000 graduates per year looking to enter the job market and only 15% find jobs. It is clear that this situation is untenable for the economy going ahead. One initiative that the government has carried out is to reduce the time it takes now to establish a new company. It is now 48 hours. Apics.sn. Commercial banks are also offering small business support in terms of training and development as well micro-credit grants and business banking. A British participant said that in the UK most small businesses fail and that setting people up for failure by providing the processes but neither the economic climate nor the training to succeed could also be very dangerous.
A comment was made that despite the fact that oil prices had come down again, this hadn’t been reflected in government controlled petrol prices, and in fact the gas price had just been increased. It was suggested that the government was profiting from people rather than supporting them in this time of economic need.
Further reading
In English
Agriculture and food
http://en.wikipedia.org/wiki/Agriculture_in_Senegal
http://en.wikipedia.org/wiki/Food_security
http://en.wikipedia.org/wiki/Food_sovereignty
http://africanagriculture.blogspot.com/2008/05/senegal-grants-tax-incentives-for.html
http://www.wfp.org/countries/senegal
http://www.reliefweb.int/rw/rwb.nsf/db900SID/PANA-7GDHAT?OpenDocument
http://en.wikipedia.org/wiki/Subprime_lending
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
http://en.wikipedia.org/wiki/2008_economic_crisis
http://news.yahoo.com/s/afp/20090403/wl_africa_afp/senegalburkinaeconomyimfgrowth_20090403143950
In French
http://fr.wikipedia.org/wiki/S%C3%A9curit%C3%A9_alimentaire
http://fr.wikipedia.org/wiki/Souverainet%C3%A9_alimentaire
http://www.reliefweb.int/rw/RWB.NSF/db900SID/RMOI-77229N?OpenDocument
http://www.goana-senegal.org/
http://fr.allafrica.com/stories/200812190599.html
http://fr.wikipedia.org/wiki/%C3%89conomie_du_S%C3%A9n%C3%A9gal
http://fr.wikipedia.org/wiki/Crise_%C3%A9conomique_de_2008-2009
http://fr.wikipedia.org/wiki/Crise_%C3%A9conomique_de_2008-2009#La_crise_des_subprimes
http://www.africanglobalnews.com/spip.php?article5966
Further reading
In English
Agriculture and food
http://en.wikipedia.org/wiki/Agriculture_in_Senegal
http://en.wikipedia.org/wiki/Food_security
http://en.wikipedia.org/wiki/Food_sovereignty
http://africanagriculture.blogspot.com/2008/05/senegal-grants-tax-incentives-for.html
http://www.wfp.org/countries/senegal
http://www.reliefweb.int/rw/rwb.nsf/db900SID/PANA-7GDHAT?OpenDocument
http://en.wikipedia.org/wiki/Subprime_lending
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
http://en.wikipedia.org/wiki/2008_economic_crisis
http://news.yahoo.com/s/afp/20090403/wl_africa_afp/senegalburkinaeconomyimfgrowth_20090403143950
In French
http://fr.wikipedia.org/wiki/S%C3%A9curit%C3%A9_alimentaire
http://fr.wikipedia.org/wiki/Souverainet%C3%A9_alimentaire
http://www.reliefweb.int/rw/RWB.NSF/db900SID/RMOI-77229N?OpenDocument
http://www.goana-senegal.org/
http://fr.allafrica.com/stories/200812190599.html
http://fr.wikipedia.org/wiki/%C3%89conomie_du_S%C3%A9n%C3%A9gal
http://fr.wikipedia.org/wiki/Crise_%C3%A9conomique_de_2008-2009
http://fr.wikipedia.org/wiki/Crise_%C3%A9conomique_de_2008-2009#La_crise_des_subprimes
http://www.africanglobalnews.com/spip.php?article5966
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