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Friday, April 30, 2021
Thursday, April 29, 2021
America Hasn’t Reckoned with the Coup That Blasted the Black Middle Class
If you were a Black person in America in the 1890s, you wanted to live in Brooklyn.
Not Brooklyn, New York. No, you wanted to be in the bustling Brooklyn district of Wilmington, North Carolina. At that time, 25,000 people lived in the thronging Cape Fear River port, the state’s largest city. More than half of them were Black. In Brooklyn, you could meet Black seamstresses, stevedores, cobblers, restauranteurs, shop owners, artisans, midwives, merchants, doctors, lawyers, bankers, and police officers. The federal customs agent was Black. So was the county treasurer. And even the town jailor.
Wilmington was the most racially progressive city in the South. It was America’s future.
But very soon, it would be awash in blood -- transformed into the country’s traumatic past. This repressed and unresolved trauma haunts the present in a thousand ways, most recently in the shocking siege on the U.S. capitol. It continues to damage us all.
Here is the story of what happened, and why we need to talk about it.
Black American dreams
By the 1890s, Wilmington’s upwardly mobile Black community had been blossoming for decades, its seeds planted during slavery. In the antebellum period, enslaved Blacks in urban homes and plantations were often highly skilled. They moved about more freely than their rural counterparts, mingling with the townspeople. Some could even read and write.
Black people were the lifeblood of Wilmington. Black sailors and navigators made the city’s prosperous trade hum along, and the railroads and other businesses relied on enslaved and free Black workers. The city’s stunning architecture was the handiwork of Black masons, builders, and carpenters. Landmark structures like the Classical Revival Bellamy Mansion, which still stands today, were built by enslaved and free Black artisans. According to David Zucchino, the Pulitzer-prize winning author of Wilmington’s Lie, an essential account of the events of 1898, the city had nearly 600 free Blacks, artisans and tradesmen, before the Civil War.
After the war, Blacks poured into the city seeking work and security. By 1880, they made up 60% of the population – the most of any sizeable southern city. (Atlanta, by comparison, was only 40% Black). By the 1890s, a Black person could find opportunity at every rung of society. Many reached the middle class, and a few accumulated significant wealth. Cultural life was blooming. You could see Black people joyfully celebrating the Emancipation Act every year and putting on masked parades on the traditional Jonkonnu holiday.
White and Black people often lived and worked peacefully side by side in Wilmington. Most astonishing of all, some even began to vote together.
A Coalition Like No Other
After the Civil War, the position of Black people in North Carolina rose and fell. Some achieved prominence, like state senator Abraham Galloway, who refused to step aside for white men on the streets of Wilmington and openly carried a pistol.
But it wasn’t long before the white Conservative Party began to recover lost ground, especially after Reconstruction. In the 1870s, these whites began a program of “Southern Redemption” to expand power by keeping Blacks out of politics. There was a problem, though: Democrats, as the Conservatives came to be known, had earned the wrath of white small farmers pummeled by economic recessions. Some ditched the Democrats for the new Populist Party.
In 1892, a new crop of progressive Democrats, like young Raleigh newspaperman Josephus Daniels, challenged the elite planters and wealthy industrialists in their party so resented by the Populists. But white farmers and laborers were still too disgusted with Democrats’ support of railroads, banks, and other powerful interests to come back into the fold.
The Democrats’ worst nightmare came in 1894 when North Carolina witnessed something seen nowhere else in the South. A new party, the Fusionists, forged a coalition of Republicans, Blacks, and white Populists to beat a common foe – the Democrats. In most of the country, Populists tended to ally with Democrats, but not so in North Carolina.
It wasn’t that white Populists had much love for Black people. Most didn’t. But they disliked another group even more: the fatcat railroad barons, bankers, lawyers, and manufacturing kingpins getting fatter at their expense. The white working class was fed up and did the unthinkable, teaming up with Blacks and Republicans to support the same candidates.
North Carolina’s Fusionists routed the Democrats in the elections of 1894, taking control of the state senate, the house, and the courts. The new Fusionist legislature pushed through reforms that expanded registration, voting, and local governing opportunities for Blacks. Members even voted to honor the recently-deceased Frederick Douglass -- creating such a stink among conservative whites that the government quickly erected a Confederate monument in front of the state capitol in Raleigh – recently removed in the wake of George Floyd’s murder.
For Blacks, the future was looking bright. In 1896, North Carolina attorney George Henry White became the only Black in the U.S. Congress at the time. Blacks boasted 300 magistracies across the state, and they were becoming a powerful political force on the coastal plains where most lived, holding 1,000 offices altogether. In the 1896 local election in Wilmington, a whopping 87 percent of eligible male black voters turned out, giving America one of its first mixed-race municipal governments.
That’s when whites began to get really nervous.
“A bomb getting ready to explode”
Progressive Democrat Josephus Daniels was an ambitious young entrepreneur, not unlike the Silicon Valley upstarts of our time. Along with William Randolph Hearst and Joseph Pulitzer, he shaped the modern newspaper, figuring out how to use the media to pull the strings of politics. Some wondered why he didn’t run for office. The answer is that he didn’t have to. By his early thirties, Daniels had the reins of the most influential media platform in the state, Raleigh’s News and Observer. He was hellbent on using it to defeat the Fusionists.
As biographer Lee Craig outlines, progressivism for Daniels meant railroad regulation, agricultural reform, and prohibition. In theory, he was sympathetic to the plight of working class whites and used his paper to criticize the railroads and J.B. Duke’s American Tobacco trust. But he also knew the Democrats weren’t really going to quit making rich white men even richer. And he knew the Fusionist alliance was shaky, particularly on race. The newspaperman saw that the poorest whites were the most likely to begrudge Black economic progress. So Daniels decided that progress would mean sacrificing Black people. It meant white supremacy.
In 1898, Democrats across the state agreed to run on racism for the upcoming elections. Daniels supplied the propaganda for the white supremacy campaign, while his cohort, political organizer Furnifold Simmons, spewed racism on the stump.
Stoking resentment of Black prosperity wasn’t difficult. Edward A. Johnson, a Black alderman of Raleigh, reported that “Negroes in Wilmington had pianos, servants, expensive carpets, lace curtains at windows” and that “White Supremacy orators of that city constantly asked from the platform, ‘How many of you white men can afford to have pianos and servants?’”
Wilmington community activist Hollis Briggs, Jr. recently put it like this: “African Americans actually controlled the commerce and when you've got a race of people that control commerce and that were well off…then you've got a whole other group of people that were upset by this economic boom for African Americans. What you had was a bomb getting ready to explode.”
On top of this, the Democrats added themes of domination and sex. White people had to be riled up over the threat of “Negro rule.” Daniels went all out, giving North Carolina a master class in the dark arts of disinformation. His reporters dug up racist dirt. They picked up tall tales about Blacks in taverns, ran them as news. Every day, the News and Observer dished up false reports and flagrantly racist editorials. North Carolina will soon become a Black republic. Black people are buying guns to kill you. Hip to the power of images, Daniels printed grotesque cartoons that demonized Blacks-- literally. A famous one shows a Black man as a hideous vampire bat terrorizing white people.
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But all that still wasn’t enough. Whites must be scared by something even more farfetched -- the bugaboo of the “black beast rapist.” Daniels sought to play on the white working class sense of aggrievement and emasculation in a way that would make them forget their hatred of fatcats – at least temporarily. He hit upon the lie that did the trick: Black men are coming to rape your women.
In the summer of 1898, Daniels received a gift in the form of an editorial written by Alex Manly, the mixed-race editor of the Daily Record, the paper of the Wilmington’s striving Black middle class. Manly had responded to a call for the lynching of Black men accused of raping white women by puncturing the biggest taboo in the South. He pointed out that white women were sometimes quite willing to have sex with Black men, just as white men were quite willing to have sex with Black women. Manly’s editorial was reprinted in newspapers across the state, along with feverish claims that the editor had besmirched the virtue of white women.
White people went berserk.
A coup, not a “riot”
In late October 1898, white supremacists in Wilmington got the perfect leader for their repulsive campaign. Alfred Moore Waddell was a former congressman – and a lawyer who defended lynchers, as Zucchino indicates. His specialty was giving rabble-rousing speeches to foment racism.
Waddell and his fellow white supremacists Democrats hatched a plan for the city. They would rig the outcome of the 1898 elections by intimidating Black voters, peeling off Populists, stuffing ballot boxes, and whatever else it took. But that wouldn’t suffice, because there weren’t many local elections in Wilmington that year. After November 8, many Blacks, Fusionists, and Republicans would still be in office. Waddell & Co. didn’t plan on waiting until the next election to get rid of them.
The solution was to execute an insurrection. The top men of the white supremacist campaign secretly agreed that after the election, they would overthrow Wilmington’s bi-racial government and install white officials in their place.
In the lead-up to November, the campaigners didn’t just hint that violence was coming if the elections didn’t go their way. They came right out and said it: Wadell stated, "We will never surrender to a ragged raffle of Negroes, even if we have to choke the Cape Fear River with carcasses."
What they didn’t say is that violence was coming even after the election went their way.
As Zucchino details, white supremacists were more than ready for bloodshed. They had two militias, the Light Infantry and the Naval Reserves, consisting of soldiers just returned from the Spanish-American War and itching for a fight. Instead of answering to the white Republican governor as they were supposed to, they reported to the white supremacists. The Democrats also had a paramilitary group known as the "Red Shirts” that terrorized Black communities.
As the election approached, Wilmington looked to be preparing for a siege. Whites stockpiled every possible weapon, including a Colt rapid-fire machine gun for the Infantry, the deadliest weapon of the day. Meanwhile, Blacks were denied the purchase of guns and powder, even by sellers outside the state.
Black congressman George H. White pressed President McKinley to prevent the coming bloodbath, but no help came. The Republican Governor Daniel Russell was in fear for his own life, and would do nothing to stop it.
On election day, things went just as the Democrats planned. Through fraud and intimidation, they “won” across the state. Some thought that violence in Wilmington had been avoided, but they thought wrong.
Two days later on November 10, all hell broke loose. But not in the sense of a spontaneous “riot,” as newspapers across the country described it, and many history books still do. No, this violence was long in the planning. Wilmington’s white supremacists used the pretext of a false threat of a violent uprising among the Black population to unleash a mob of 1,500 whites, led by the Light Infantry militia, to wreak havoc. Armed to the teeth, the mob headed to the Daily Record, hoping to lynch Alex Manly. He had already fled, so they burned the building. The mob swarmed on the Black neighborhoods, targeting Brooklyn in particular, murdering untold numbers and chasing hundreds out of town as they went.
By day’s end, Black bodies were strewn across the streets and gutters. Zucchino puts the number of fatalities at 60; some think it was even higher. The more prominent Blacks were put on trains out of town at gunpoint, ordered never to return. The poorer ones fled to swamps and cemeteries outside the city, where they froze and starved for weeks.
Some professional Blacks and white Fusionist politicians hoped to wait out the violence. They calculated wrong. The coup leaders banished everyone they didn’t want around, and some of the banished didn’t make it out alive. Zucchino reports that one popular Black barber was put on a train and found dead hours later, shot by a Red Shirt. A white Fusionist on the banishment list found himself hanging from a rope, only surviving by squeaking out the Masonic distress cry. He was saved by a fellow mason in the mob.
As the insurrection unfolded according to plan, Waddell named himself mayor and put white supremacists in the place of duly elected officials, including aldermen, 100 police officers, the city clerk, the treasurer, the city attorney, and anyone “whose affiliation with the Fusion-negro regime made them obnoxious to the people and the present administration.”
For the once-prosperous Blacks of Wilmington, whose only crime was success, the future suddenly grew dim. Zucchino writes that “the city’s black middle class, built and nurtured for decades, was collapsing. Hundreds of black families were homeless. Those who remained were by now thoroughly intimidated, accepting of white authority, and thus welcomed by whites to remain in Wilmington.”
The poor Blacks hiding in the swamps and cemeteries were eventually lured back because the whites in Wilmington couldn’t manage without their cheap labor. Plus, white supremacists dearly loved having Black servants.
A turning point in America
Wilmington’s Black community was thoroughly devastated by the coup. By the 1900 census, the city was majority white. Blacks continued to flee as the years passed. Today, the Black population stands at less than 19%.
After 1898, no Black citizen held public office there again until 1972.
The Wilmington coup stands as the only successful and lasting armed overthrow of a legitimate municipal government in American history on U.S soil. It was a horrific turning point for the country, marking the beginning of Jim Crow and poisoning race relations to the present day. Not only was it a stain upon North Carolina, but on the federal government, too, which knowingly abandoned Black people to death and destruction.
Yet if you ask most Americans, they know little about it.
This is partly due to the barrage of fake news about events circulated in the media at the time around the country, from Raleigh to Philadelphia to New York City. To help correct the record, in 2000, North Carolina’s General Assembly established the 1898 Wilmington Race Riot Commission to investigate. The commission released its report in 2005.
One of the commission’s goals was to study the economic impact on Black people in Wilmington and the state. The report cited such problems as capital losses, less funding for education and thus lower literacy rates for Blacks, and broken support networks. Duke University economist William Darity, a member of the commission, discussed the economic catastrophe in the documentary film, “Wilmington on Fire,” He describes a blow that resulted in a significant decrease in the overall status of Black jobs in Wilmington and a steep decline in overall economic prospects. Going forward, the city had more Black service workers, fewer artisans and entrepreneurs. Middle-class dreams were shattered.
Commission member Harper Peterson said, “Essentially, it crippled a segment of our population that hasn’t recovered in 107 years.”
Today, Black Americans still suffer from economic despair and exclusion from the American dream. They still face brutality from authorities, attacks on their civic rights, twice the unemployment rate of whites, and a pervasive, structural wealth gap born in part of events like the coup and their aftermath.
Woodrow Wilson and FDR
Nobody was ever prosecuted for the Wilmington insurrection. White supremacists didn’t just get away with murder and treason in 1898. They were richly rewarded for it, in the South and beyond -- none more so than Josephus Daniels.
Biographer Lee Craig notes that Daniels remained unrepentant about the white supremacy campaign even half a century after the fact. But that didn’t seem to bother the U.S. presidents who relied on his good counsel.
One fan was Woodrow Wilson, whose family moved to Wilmington when he was a teen. There, Woodrow enjoyed hanging out with the scions of planter elites, and as president, he remembered his North Carolina friends, saving the best for Josephus Daniels.
President Wilson made one of the key architects of southern apartheid his Secretary of the Navy. Daniels became, as Craig observes, “one of the few men Wilson held in high regard and consulted throughout his eight years in the White House.” The unapologetic white supremacist created the war machine that helped win World War I and oversaw the aggressive expansion of U.S. military power in Nicaragua, Mexico, Haiti, the Dominican Republic, and Cuba.
That’s not all. The man known as the father of Jim Crow launched the career of Franklin Delano Roosevelt, who served under him as assistant secretary of the navy. When FDR became president, he still fondly referred to Daniels as “Chief, and awarded the treasonous criminal with an appointment as his Ambassador to Mexico, a key position. President Roosevelt described Daniels appreciatively as “a man who taught me a lot that I needed to know.”
In 2021, when a mostly white mob stormed the capitol in Washington, some wielding Confederate flags, a few astute observers understood the evil echo of what had happened over a century before. Academics Kathy Roberts Forde and Kristin Gustafson summed up the parallels of the Wilmington coup and the capitol siege: “Each was organized and planned. Each was an effort to steal an election and disfranchise voters. Each was animated by white racist fears.”
There have never been reparations for the descendants of those victimized in the Wilmington coup and massacre.
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Tuesday, April 27, 2021
Monday, April 26, 2021
Long-Term Unemployment Is Reversible
After the great financial and economic crisis of 2008–09, persistently higher levels of unemployment have been experienced in mature capitalist economies, particularly in Europe. Output, too, exhibits a lower growth rate and an estimated potential path far below its pre-crisis trend. But contrary to what postulated by standard textbook macroeconomic models, the slowdown has not set in motion a continuous process of decelerating inflation or increasing deflation.
Evidence on the persisting effects on output and employment casts severe doubts on the legitimacy of New Consensus macroeconomics, whose main feature is the confidence in monetary policy’s ability to reduce output volatility and ensure stable and lasting growth in capitalist economies.
Interestingly, the apparently never-ending post-crisis stagnation favored the revival of the theme of hysteresis (Blanchard and Summers, 1986; Ball, 2014; Blanchard et al., 2015; Blanchard, 2018; Girardi et al., 2020).[1] With the possibility of hysteresis, mainstream macroeconomists admit the possibility that a fall in economic activity may have persistent effects on macroeconomic outcomes. In fact, the term is currently used with respect to both the unemployment rate and output level. In particular, hysteresis implies that, due to a deep recession, a sharp increase in the actual unemployment rate may also cause a change in the same direction of the equilibrium unemployment rate or NAIRU (Non-Accelerating Inflation Rate of Unemployment) and, consequently, in potential output.[2] Putting it differently, a certain degree of path dependence is currently acknowledged for both output and unemployment also within the prevailing mainstream approaches to macroeconomics (Blanchard, 2017). According to these models of hysteresis, a crucial feature of higher unemployment rates are not accompanied by the deflationary pressure predicted by more traditional macroeconomic models. This circumstance has been identified as missing deflation, and it further testifies to a puzzle concerning the unemployment-inflation link (Yellen, 2014).
Three main explanations for hysteresis have been provided so far.[3] The first one refers to insider/outsider models and to the role of labor market institutions (Blanchard and Summers 1986; Lindbek and Snower 1985). The second one looks at the effects of aggregate demand on capital formation (Rowthorn, 1995), and has been recently discussed by several scholars (Haltmaier, 2012; Ball, 2014; Fatàs and Summers, 2016; Martin et al., 2015). The third investigates the role of long-term unemployed: due to various factors, individuals who are unemployed for a sufficiently long period (generally, more than 6 months) become detached from the labor market or lose skills and employability and hence do not exert competitive pressure on wages (Blanchard and Diamond, 1994; Ball et al., 1999; Ball, 2009).
In our new INET Working Paper, we focus on the latter explanation of hysteresis, which is very widespread in the New Keynesian literature. According to this interpretation, an increase in long-term unemployment would cause an increase in the NAIRU since allegedly long-term unemployed individuals are bad inflation fighters (Rusticelli, 2015). These people would indeed suffer from skill deterioration and detachment from the labor market[4], two conditions that would make them irrelevant for wage negotiations and non-competitive with regard to the other workers. According to the existing literature, the long-term unemployed would have fewer chances of being reemployed than the short-term unemployed – and hence would not contribute to pushing down inflation – for reasons that involve both labor demand (unemployment duration would have a ‘stigma’ effect, i.e. would be regarded by employers as a signal of undesirable characteristics) and labor supply (discouragement in job searching and human capital decay). Usually, the socio-economic literature identifies this phenomenon with the term duration (or state) dependence. The intuition behind this is rather simple: according to this approach, the longer the duration of unemployment, the lower the probability of being rehired (Layard et al., 1991; Bean, 1994; Blanchard and Diamond, 1994; Dosi et al., 2016). Although currently subject to debate and not wholly supported by evidence[5], this explanation of hysteresis relies on the assumption that long-term unemployed people are on the margins of the labor force, and therefore they are considered as exerting feeble (downward) pressure on wage dynamics (Ball, 1999; Krueger et al., 2014).
Within this class of models, a higher pool of long-term unemployed has relevant implications for macroeconomic outcomes (and therefore for policy-making), as a higher unemployment rate would be needed to achieve stable inflation: in other words, higher long-term unemployment would be associated with an increase in the NAIRU [6]. Accordingly, the inflationary risk of expansionary policies become higher than "in normal times." Such a higher risk would depend on the fact that for the same unemployment rate, a lower unemployment gap (namely, the difference between actual and equilibrium unemployment rate) would occur, owing to the increase in the NAIRU. Moreover, in the case of expansionary policies labor demand would primarily involve short-term unemployed individuals, and these would be able to bargain for substantial wage increases, owing to the inability of the long-term unemployed to actually compete for the jobs. Summing up, two implications for an expansionary demand-side policy can be drawn: on the one side, policies aimed at reabsorbing unemployment would hardly be effective in reducing its long-term component; on the other side, such measures would be associated with a persistent effect on price inflation.
Crucial in this line of argument is the assumption of a certain degree of asymmetry between total and long-term unemployment. In fact, this interpretation of hysteresis would predict that when total unemployment falls (i.e., during phases of economic recovery), its long-term component would not fall in the same proportion. Moreover, if expansionary policies aimed at reducing long-term unemployment occur, these would most likely cause a permanent or accelerating increase in the inflation rate. In our research, we submit these two hypotheses to empirical scrutiny: first, we verify if the alleged problem of irreversibility in long-term unemployment actually exists; second, we test the emergence of significantly higher inflation during and after episodes of a sharp reduction in long-term unemployment.
Concerning the first research question, we analyze the dynamic trends of the unemployment rate and the long-term unemployment rate in 25 OECD countries from 1983 to 2016. Contrary to what postulated by the New Keynesian approach, we observe a direct relationship: during phases of unemployment reduction, the long term-unemployment rate decreases too; similarly, when the former increases, the latter increases as well (as in Webster, 2005). Indeed, we observe a very high correlation between the two variables (in both levels and first differences). Interestingly, the long-term unemployment rate, both in the average value among OECD countries and in most individual countries, tracks the dynamics of the overall unemployment rate in the same way whether the latter increases or decreases. In conclusion, we provide evidence against the non-reversibility of long-term unemployment. Quite on the contrary, data suggest the existence of symmetry in the dynamics of the unemployment rate and its long-term component during phases of recession and recovery.
While all these elements suggest that long-term unemployment should be considered a reversible phenomenon, we cannot yet assert that its declines would not generate accelerating inflation, as the New Keynesian approach suggests. This is the second research question which our work tries to answer. To do that, we focus on specific cases of long-term unemployment reductions and we assess the behavior of Consumer Price Inflation (CPI) in the subsequent 5-years window. Empirically, in our panel, we identify 78 episodes of sharp reductions in long-term unemployment. We do so by defining sharp reduction as a yearly percentage decrease in the long-term unemployment rate, higher than the country mean by more than a standard deviation. Then, we employ local projections (Jordà, 2005) to investigate the impact of these reductions on the inflation rate. This approach allows us to identify the dynamic behavior of inflation in our ‘treated group’ (country-years with a shock, that is a strong reduction in long-term unemployment) with respect to the ‘control group’ (that is, non-episode observations). Moreover, we deal with the existence of endogeneity by looking for significant differences between control and treated group in some macroeconomic variables in the year before the shock (cf. Girardi et al., 2020).
Our findings indicate that after episodes of long-term unemployment reduction, inflation in treated units is in line with the control group. On average across model specifications, we find that two years after the shock, treated units present an inflation rate that is 0.5 percentage point above the control group, but this difference is never statistically significant. At the end of the 5-year window, the discrepancy is null. In other words, we find no trace of persistently higher inflation after episodes of a strong reduction in the long-term unemployment rate.
Remarkably, we replicate our exploration in a subset of observations identifying strong reductions of the long-term unemployment rate that occurred in country-years featuring, according to OECD estimates, a negative unemployment gap. According to New Keynesian models, when the unemployment rate is below the NAIRU barrier, inflationary pressures would take place. Nevertheless, our findings confirm that no signs of persistent effects on the inflation rate after the shock occurs even when the economy is already operating ‘above its potential,’ as defined by the standard approach to macroeconomics and measured by international institutions. Evidence on the non-inflationary effects of a sustained reduction in long-term unemployment are confirmed by a number of robustness tests, which include: i) the inclusion of several control variables in our baseline specification, such as the pre-existing trend in GDP; ii) the use of alternative measures of price inflation, namely GDP deflator and export prices; and iii) the use of an alternative definition of the long-term unemployment rate, consisting in the ratio of long-term unemployed to the working-age population instead of the active labor force.
All in all, our research provides empirical evidence questioning the implications of the explanation of hysteresis based on the role played by the long-term unemployed along two lines of inquiry. On the one hand, our evidence undermines the irreversibility of long-term unemployment. On the other hand, the evidence we provide is supportive of the negligible effects in terms of inflation associated with episodes of strong reductions in long-term unemployment. Our findings turn the spotlight on the policy implications of the hysteresis models under scrutiny, according to which the NAIRU should be reduced almost exclusively by means of structural reforms in the labor market, as so often has been advocated by international institutions. Indeed, by incorporating hysteresis, these models present two controversial implications, which our findings call into question: i) it is advocated that monetary tightening or a recession may increase the NAIRU; and ii) once the NAIRU has increased, expansionary policies aimed at restoring the previous lower levels of unemployment would turn out to be inflationary.
On the contrary, according to our exploration, demand-side expansionary policies would be able to decrease both total and long-term unemployment, without generating persistent acceleration in inflation. This policy implication is at variance with the conventional wisdom that aggregate demand only matters in the short run, as well as with the role of the NAIRU as an inflationary barrier, which is ultimately determined by supply-side factors. Once we admit the possibility of extending the role of demand in determining persistent changes in output and employment, the path-dependence of potential output becomes quite a natural consequence.[7] From our perspective, the most persuading explanation of such path dependence can be found in the role of aggregate demand in affecting capital formation and productivity (see Girardi et al., 2020).
Notes
[1] The New Consensus developed during the so-called period of Great Moderation, that is, between 1985 and the Great Recession. In that context, the concept of hysteresis was almost totally neglected by academic research. As Blanchard (2018) has pointed out, over time, as the so-called Great Moderation took place from the mid-1980s up to about 2007, research on hysteresis largely disappeared (p. 98).
[2] The concept of NAIRU has been criticized along different lines by a variety of works (among others, Arestis and Sawyer, 2005; Storm and Naastepad, 2007; Lang and Setterfield, 2020). Stockhammer (2008) traces a series of specific characteristics of the NAIRU and analyzes them in alternative theoretical frameworks. Moreover, a recent policy brief by Blanchard (2016), based on an earlier paper (Blanchard et al., 2015), raised a number of interesting points concerning the NAIRU and the Phillips Curve. In this regard, a partial reconsideration of the ‘natural rate’ of unemployment also emerges in Blanchard (2018).
[3] For a more detailed review, the interested reader may refer to Girardi et al. (2020).
[4] In order to increase the NAIRU, such detachment, however, must be only partial: long-term unemployed are supposed to be less effective in searching for a job, but still do so – otherwise, their detachment would involve simply a decline in the labor force, with no increase in measured unemployment.
[5] Some criticisms have been advanced on different grounds, to the point that some very influential scholars have partially revised their perception of the role of long-term unemployment (Blanchard, 2006; Blanchard and Katz, 1997). For instance, even supporting the notion that time out of work leads to skill decay, Edin and Gustavsson (2008) do not disregard the possibility of reverse causation (that is, skill obsolescence leads to unemployment). Moreover, a variety of works have criticized the role of unemployment benefits, which are supposed to increase the length of unemployment spells, in affecting labor market outcomes (among others, Armingeon and Baccaro, 2012; Stockhammer and Sturn, 2012; Boone et al., 2016).
[6] To understand how the New Keynesian approach formally incorporates the possibility of hysteresis in the labor market, the reader may refer to a standard macroeconomic textbook’s presentation (cf. Carlin and Soskice, 2014). With a certain degree of generality, an increase in long-term unemployment is likely to have an effect comparable with an increase in labor market institutions operating in favor of workers.
[7] The concept of potential output in a different framework is not immediately intelligible. According to Serrano (2019), potential output can be viewed as ‘determined by size and efficiency of the existing stock of capital equipment’ (p. 13) at some point in time. But such stock can be increased by additional investment stimulated by aggregate demand (Fontanari et al., 2020; Girardi et al., 2020).
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Friday, April 23, 2021
Wednesday, April 21, 2021
Tuesday, April 20, 2021
Monday, April 19, 2021
Covid Is Hitting Workers Differently Than the Financial Crisis
Understanding the impact of recessions on economic security, especially employment, motivates much of macroeconomics. Most analysis and commentary describe aggregate effects such as the peak-to-trough drop in employment, the rise in the unemployment rate, or the time it takes for employment to recover back to its pre-recession level. But as attention to rising economic inequality has intensified in recent years, studies have given more emphasis to the connection between recessions and inequality.
In a new INET working paper, we examine inequality in employment outcomes across social groups during recessions. We take a comparative perspective, studying results from two recent and severe US recessions: the “Great Recession” linked with the global financial crisis beginning in late 2007 and the “lockdown” recession caused by the COVID-19 pandemic. Comparing these two events presents an interesting case study to explore inequality in recessions.
The severity of a recession depends both on how much employment declines and the persistence of those declines. The primary job-months lost statistic in our analysis is designed to capture both of these dimensions. This measure simply adds up the difference between actual employment and pre-recession employment over the recession months. For example, if the pre-recession employment trend for a demographic group was flat and a person in that group lost a job in April but went back to work in July, that person’s experience would add three job-months lost to the total in their demographic group.
We calculate job-months lost with data from the US Current Population Survey stratified by gender, race/ethnicity, age, and education. Our results show:
- A significant shift of the burden of job losses from men in the Great Recession to women in the COVID-19 lockdown.
- White workers fare better than Asian, Black, and Hispanic employees in both recessions. Black and Hispanic women are hit especially hard in the COVID-19 pandemic.
- Young workers suffer disproportionate, and similar, job losses in both recessions. Middle-age workers have been affected less severely in the COVID-19 crisis than in the Great Recession. Older workers have done much worse in COVID-19 compared with the Great Recession. Job-months lost in the Great Recession were somewhat skewed toward workers with lower education (a good proxy for income), but, when appropriately accounting for trends, the inequality across education groups in the Great Recession was less pronounced than often described. However, less-educated workers suffer dramatically more employment loss due to COVID-19 than more educated groups.
As Catherine Rampell writes in the Washington Post, “[p]ast research has found that the longer a worker is unemployed, the more difficulty that person will have ultimately returning to work — whether because of stigma, skill deterioration, severed relationships with past employers or other factors.”[1] These effects may have seemed to be less of a concern in the COVID-19 crisis as US employment appeared to bounce back very quickly in May and June of 2020. But the recovery slowed, especially as the pandemic reasserted itself in November and December of 2020. The percentage decline in total jobs at the end of February 2021 relative to the February 2020 peak was almost the same as the worst peak-to-trough employment gap in the Great Recession and labor force participation remains depressed. Permanent job losses and detachment from the labor force during the COVID-19 crisis will likely have widespread effects on employment prospects for years to come and these effects will be greater for disadvantaged groups.
Recessions are bad; inequality makes them worse. The need for effective intervention to offset the macroeconomic effects of recessions is reasonably well accepted among policymakers, especially in the aftermath of the Great Recession when the fiscal response was, according to many economists, inadequate. The additional evidence on inequality and recessions, especially the COVID-19 recession, increases the urgency for effective policy. Recognizing how recessions hurt the welfare of the most vulnerable members of society increases the significance of the social costs beyond what aggregate measures imply on their own. Furthermore, the unequal effects of recessions, and the persistence of these unequal effects after the downturn ends, slows or even reverses progress toward the worthy social goal of creating more equitable societies.
The connection between recessions, inequality, and macroeconomic policy has another, somewhat more subtle, implication. Our results demonstrate how individuals and families in lower socio-economic circumstances suffer more severe effects from the recession. The goal of social equity, therefore, implies they should receive disproportionate relief from policies designed to stimulate the aggregate economy. This point relates to the debate in the U.S. about the size and distribution of “stimulus checks” sent to American households. These payments are a fixed amount per person up to a certain income level, after which the payments phase out. Some economists oppose this kind of demand stimulus because much of it will be saved rather than consumed, leading to less impact on demand. The criticism has some relevance, especially in the midst of a pandemic when people cannot or choose not to spend on many discretionary activities to protect their health. But lump-sum payments of a constant amount across individuals have a much bigger proportional impact on lower-income households. A disproportionate share of these households will be affected directly by the pandemic and be in critical need of this assistance. For lower-income households that may have dodged income losses during the recession, the lump-sum payment will still be a welcome, and significant, financial boost. If they do not spend the funds, they can pay down debt or build some reserve for future financial shocks. These payments, at least during the pandemic, are a step toward the important social goal of greater economic equality.
Notes:
[1] February 5, 2021, https://www.washingtonpost.com/opinions/2021/02/05/january-jobs-report-COVID-relief-need..
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Thursday, April 15, 2021
How China Is Offering an Alternative to the IMF
China seems poised to take leadership of regional efforts to forge a safety net that protects countries in East Asia from the fragility that cross-border financial flows engender. My new INET Working Paper analyses why: Leadership stems from China’s important role in production value chains spread across the region and the support provided to those networks by the massive investments facilitated by China in projects launched as part of the Belt and Road Initiative (BRI). The Council on Foreign Relations estimates that by early 2020 China had spent an estimated $200 billion on BRI projects. But aside from the capital flows associated with the BRI, the People’s Bank of China (PBoC) has put in place a network of bilateral, local currency central bank swap arrangements that provide countries a much-needed safety net. These swaps are less highlighted instruments that have contributed to China’s growing global influence in developing countries worldwide. Between January 2009 and January 2020, the PBoC entered into such arrangements with 41 countries, including many in Asia.
These bilateral swap arrangements (BSAs), denominated in RMB and the currency of the relevant partner central bank, allow the latter to access RMB liquidity for short periods at relatively low rates of interest, in return for its own currency as implicit collateral. Under a swap arrangement, while the borrowing central bank has access to the foreign currency liquidity line, it can lend it to institutions and agents in its own jurisdiction that face shortages of the relevant foreign currency, in this case the RMB. For partner countries, the greater the availability of RMB swap lines, the larger their leeway in using available dollar earnings and reserves to settle transactions with other countries. They can also, as Argentina and Pakistan did, use, or showcase their ability to use, the RMB accessed through the swap line, to acquire dollars and shore up their dollar reserves to meet commitments to third parties.
In principle, the bilateral swap network provides countries a means of addressing foreign currency shortages and tide over balance of payments difficulties resulting from boom-bust capital flow cycles, without having to turn to the US and the IMF for assistance. Access to such a regional, IMF-independent safety net has been a need felt in the region ever since the 1997 Southeast Asian financial crisis, in the aftermath of which leading Southeast Asian nations availed of bail-out packages, which, though funded substantially by governments in the region, were crafted by the IMF. The policy conditions that accompanied the bail-outs severely damaged Southeast Asian economies, leading to the conviction that the IMF "didn't know Asia" and that "its remedies were likely to do great damage to the Asian economy". This experience triggered a search for regional, IMF- and US- independent arrangements that could be accessed in times of financial difficulty, without having to implement policies detrimental to the economic interests of countries in the region.
The first major initiative seeking to create such a facility was a proposal mooted by Japan to establish an Asian Monetary Fund (AMF), with capital of $100 billion, of which Japan was to contribute half. Recognizing that such a Fund would weaken US and IMF influence in the region, representatives of both opposed the proposal. Their opposition was strengthened by the fear among countries in the region, especially China, that this would lead to excessive Japanese economic and political influence. Overall, three factors worked to undermine the proposal. The first was the subordinate position Japan held in its special bilateral relationship with the US. The second was the fear of Japanese dominance among other countries in the region, influenced not just by its economic strength, but by the history of Japanese colonialism in the region—a fear which the US is seen as having exploited, especially vis-a-vis China. Third, the dependence of many ASEAN countries on US markets and US-mediated capital flows, which resulted in these countries softening their stance once the US and the IMF expressed their opposition to the AMF.
Having failed to push through its AMF proposal, Japan focused on providing post-crisis bilateral support to countries in the region through the New Miyazawa Initiative. Announced in October 1998 by Finance Minister Miyazawa Kiichi, the Miyazawa Initiative was a $30 billion package to support economic recovery in East Asian countries affected by the crisis, by providing financial assistance on a bilateral basis, as well as funding a facility at the Asian Development Bank ($3 billion) to guarantee bonds issued in international financial markets. The success of the initiative was reflected in the substantial use of the assistance on offer. To an extent, support through the Miyazawa Initiative was an alternative to conditionality-tied borrowing from the IMF. While funds through the initiative were only supplementary in countries that had entered into an agreement with the IMF, in countries like Malaysia, Vietnam, and Myanmar that had not accepted or were not provided IMF support, they served as an alternative.
The Miyazawa Initiative also experimented with currency swap arrangements. It extended the forms of support available beyond loans and credit guarantees, to include currency swap arrangements between central banks, which were taken up by the central banks of South Korea and Malaysia. However, the Initiative proved to be a short-term response to the crisis, rather than the launch of a network of bilateral mechanisms under Japanese aegis that could provide an enduring financial safety net for countries in the region.
In the following period, countries experimented with setting up a cooperative financing arrangement as a means to address financial and balance of payments fragility, possibly influenced by fears of a likely power imbalance in the region favoring Japan. The effort culminated in the Chiang Mai Initiative (CMI), involving the ASEAN+3 (ASEAN countries plus China, Japan, and South Korea), which was essentially a network of bilateral foreign exchange swap arrangements. The CMI would have served its purpose if it satisfied the requirements set for regional crisis prevention and resolution framework. These were that it should be: (i) adequate to the task in terms of the volume of resources available; (ii) independent of US influence and IMF-style conditionality; and (iii) a framework that sidesteps regional tensions that could undermine the effort. In practice, the CMI and its multilateralized version CMI-M failed to meet these requirements.
Pressures from the US and the Bretton Woods institutions of the kind experienced at the time of the debate over a potential AMF, and geopolitical tensions in the region led to a decision to outsource the task of monitoring and surveillance of countries availing of the swaps under the CMI to the IMF. Beyond a specified borrowing limit, a borrower was required to have entered into an agreement with the IMF and be subject to the latter’s conditionality and surveillance to be eligible. Initially, any swap in excess of 10 percent of the agreed amount in an arrangement required IMF surveillance. That was raised to 20 percent in 2005 and 30 percent in 2012. What this meant is that the amount of foreign exchange that could be accessed without being subject to IMF conditionality was insignificant, especially since vulnerability in the region rose substantially after 1997, and especially after 2004 when there occurred a surge in financial capital movements from metropolitan centers to emerging markets, fuelled by the accommodative monetary stance and low-interest rate policy adopted by developed country central banks, especially the US Fed.
In practice, nothing came of these regional cooperation efforts expressly aimed at addressing the vulnerabilities that stem from the enhanced and volatile flows of capital across borders. Three factors explain that failure. The first was the subordination of the regional agreement to the IMF, as a means of perpetuating the existing regional balance of power and of ensuring repayment, which subverted the regional effort. The second, was the turn to the US Federal Reserve, when offered an opportunity, to access dollar liquidity through swap arrangements which this institution can proliferate without limit, given its control over dollar issuance. The third is increasing acceptance of bilateral arrangements with one of the regional powers—Japan or China—to access dollar or regional currency liquidity.
It is in this background that China has intensified efforts to use bilateral swap arrangements and capital flows as a means of establishing leadership with a regionally ‘internationalized’ currency. Faced with its own economic woes and handicapped by its relationship with the US, Japan has fallen behind in the race for regional leadership. But China too is confronted by regional fears of the consequences of its dominance and by a backlash from other powers, which are rallying together as is the case with the US, Australia, Japan, and India that have come together in the ‘Quad,’ for example. China’s belligerence does not help. But its financial generosity may yet win it enough supporters for a network of bilateral swaps and flows that create under its leadership a bilaterally-driven, IMF-independent safety net, that realizes a long-felt need in the region.
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FEDS 2021-025: Labor Market Effects of the Oxycodone-Heroin Epidemic
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Wednesday, April 14, 2021
“Young African People See No Clear Future for Themselves”
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Bara Guèye draws on over 35 years in West African development practice. His professional activity and scientific work have used participatory action research to promote good practice in local governance of natural resources, strengthen family farming, build more resilient communities in the face of climate change and support decentralized financing models for adaptation.
He began his professional career as a teacher and researcher at the National School of Applied Economics (ENEA) in Senegal. He then worked for the Drylands Programme of the International Institute for Environment and Development (IIED, UK) for more than 10 years before setting up in 2005, the Senegalese NGO Innovation, Environment and Development in Africa (IED Afrique ) of which he was the Director until 2019. He has published several articles and reports including Guéye, B. (2014). Specialization or diversification? Divergent perspectives on irrigated rice cultivation in three large dams in the Sahel.
After this first twelve months of measures taken to combat the COVID-19 pandemic, what is the current situation in Senegal? How do you assess the actions taken by the government and NGOs?
We had our first case of COVID-19 right at the beginning of March 2020, making it now one year and a few days. It's true that at first, Senegal like many other countries, was both shocked and surprised by this new pandemic. At a global level, I think even developed countries didn’t have a clear strategy for addressing it, which created a situation of general panic. But it prompted Senegal to enact a series of measures early on, which were extremely demanding both for the country and for ordinary people, in order to contain the disease. The population was quick to follow these measures, and they were anxious, which was both a problem but also brought its advantages, since fear of the disease meant that difficult measures were accepted from the beginning. Even in terms of the politics of the country, I noted a kind of sacred agreement between government, civil society, and opposition parties. Other agendas were shelved for the time being. This popular agreement meant that all the proposed measures were accepted: curfew, tight controls on markets, closure of non-essential shops, a ban on some forms of transport and strict limits on others, controls on movement between cities and regions, and even the shutting of places of worship. All such measures were put in place at once, but started to generate significant economic and social damage.
These adverse impacts were sufficiently damaging that control measures could not be kept in place for long, because we have an economy that depends essentially on the informal sector, and someone who relies on the informal sector cannot be without work for long. In Senegal, more than 80% of urban dwellers operate in the informal sector, with the majority earning just enough to feed themselves day-by-day. It's quite different from those with a salary in the public sector, or private sector employees, who together constitute only a tiny minority. In order to minimize the impacts of such measures on the most vulnerable households and economic sectors (tourism, craftwork, transport, amongst others), the State made available the sum of one thousand billion FCFA (equivalent to US$ 1.736bn); this is an enormous sum for a country like Senegal, given the size of its GDP. This fund was then able to distribute food packages, and take charge of water and electricity bills for the poorest households for three months, to help get over this exacting period of time. There were also measures taken to support particular sectors, like tourism, craftwork, transport, culture, amongst others.
While communications were not brilliant at the start, a strategy to accompany the government’s measures was then put in place, working with the media, community-based organizations, religious authorities, trade unions, women, and youth associations, etc. Everyone was asked for their help, and that contributed to people accepting the measures put in place. The result of all these actions has been that the country succeeded in managing the pandemic reasonably well, such that by October 2020, there had been a very significant fall in the number of COVID cases.
But at the same time as we saw this positive evolution of the pandemic, respect for social distancing and other measures mentioned above, became weaker and weaker. You got the impression that the social threshold of tolerance for these measures had been reached if not surpassed. People had begun to suffer increasingly, which the government recognized by shifting its message to learning to live with the virus. This meant in effect taking up normal activities while trying to maintain some degree of protective measures. This situation was reinforced by the fact that infection rates had fallen, and the population reached the conclusion that COVID had been defeated, leading to an abandonment of all controls. People went back to their normal lives and way of doing things pre-pandemic, and left behind the protective measures whether in public spaces, in transport, family occasions, etc. The government equally could not continue to force people to comply, given the economic, social, and political impacts. The consequence has been an explosion in new cases from November 2020 onwards. According to some people, this new wave of infections is also linked to the fall in temperature at this time of year.
Unfortunately, when the government wanted to restore some of the restrictions, in order to contain the new wave of cases, there was no longer the same level of compliance and willingness to abide by the rules. The curfew was reinstated in Dakar and Thiès, which account for 80% of COVID infections in Senegal. But overall, people are no longer following the protective measures. The state of health emergency came to an end on March 19th, 2021, which meant the lifting of all restrictions, except for some limited measures, and life returned to normal. It is true that with the recent violent events, the State really had no choice but to soften considerably the restrictions on daily life. Amongst the many frustrations expressed during the demonstrations, there is the sense that the money found to help out the most vulnerable groups and sectors had not been fairly managed, nor transparently handled. A large number of complaints were made about this. According to some people, certain economic sectors or social groups had been left stranded.
The expiry of the state of health emergency therefore provided the government with a good excuse to lift the restrictions. Happily, we can see today a downwards trend in the number of new cases and deaths, even if it is too soon to draw firm conclusions.
You’ve mentioned a fair number of measures taken by the government during the pandemic. Can you also tell us of actions by civil society, such as by community-based groups, over the course of the health crisis?
Yes, there have been lots of examples, as there are so many different sorts of community-based organizations here, each one of which has mobilized its people and resources in support, and in giving out messages. If you’re looking at community organizations, religious leaders hold great authority and exercise a lot of influence over people. They became involved very early on and their messages invited all their members to follow the rules laid down. We have seen, for example, that religious leaders have been scrupulous in wearing a mask whenever they go out. This has had great symbolic significance because there remain a number of people who say that the disease COVID-19 doesn’t exist, or that it’s a creation of rich developed countries used as a tool to control population growth in poor countries. If this kind of misinformation is allowed to spread in a society where people don’t have the means to discern what is true or false, this can have a big impact on communication.
Researchers, especially anthropologists, went into action from early on, in those areas with particularly high cases of COVID to undertake “action research,” which allowed them better to understand people’s behavior faced with this disease, so that they could design more effective strategies for reaching them. In addition, there have been initiatives launched by sports and cultural associations, to engage local neighborhoods to compete amongst themselves, in place of the regular football games.
I should also mention the involvement of an important community resource – Badienou Gokh - or “neighborhood grannies”, made up of women volunteers who remind people about questions of health, keeping the streets clean, questions of security, etc. They are really important opinion leaders who are brought in whenever you need to get people moving around a social issue. Such women are present in all regions of the country and played a vital role in the fight against the pandemic. I should also underline the role of the media, which were amongst the first to get moving; similarly, artists and musicians actively contributed to a range of activities aimed at helping people understand what is going on. There have been, as you can see, many kinds of initiatives, some deeply local and rooted, others the result of support from the state and NGOs.
Nevertheless, over time, the shifts in attitude and behavior towards the pandemic have been accompanied by a reduced intensity in such social mobilization campaigns, because these are behavioral practices that are really hard to continue over a long period of time, especially when voluntary. But they were very important in terms of the results gained in the early months. Besides, Senegal has been cited as a good example for pandemic management, thanks to this multi-actor strategy and approach, combined with regular, clear publication of COVID statistics. From the first case onwards, a regular daily bulletin has been issued by national TV, on the radio, and on websites.
Continuing with this discussion of social and governmental reactions, how do you see the recent disturbances in Senegal, the series of demonstrations, which have, as you rightly noted, drawn from a range of factors, including multiple frustrations. Give us your thoughts on this movement, and how far this represents the need for a significant shift in Senegal’s development model.
The act which unleashed these demonstrations relates to a case between two private citizens which normally would be dealt with by the justice system without too much noise. But the situation very quickly took aspects of a police thriller or sitcom. As I mentioned, this case exploded into a context and at a time when frustrations had been boiling, above all amongst young people. The case sparked an inferno, setting loose a movement, which, if you listen to them, has its roots not just in political concerns. Above all are the frustrations which have built up over the months caused or exacerbated by the consequences of COVID.
For more than a year, people’s movement and liberty have been constrained; young people haven’t been able to go to local sports practice or watch a football match, or boxing match – a very popular leisure activity. For those relying on incomes from the informal sector, their livelihoods have been wiped out; those hoping to set off on clandestine migration have had to wait, and may not be able to try again; etc. Next to them, you have a political class that has been daggers-drawn around a number of contentious issues. Young people began to believe that all their future hopes were being abolished, and they started pointing fingers at both national and international conspiracies. At the same time, while they had been suffering badly from the crisis, they had the impression that some people had managed to profit from their position and do well from other people’s difficulties.
Young people were completely fed up to see all their liberties being silenced, their movements reduced to a strict minimum. Popular movements are always multi-dimensional. As I mentioned, the majority of those who came out to demonstrate had no specific political affiliation. For example, you could see some of those demonstrating were more interested in taking advantage of attacks on French-owned shops, in order to sack them and steal basic goods like rice, sugar, oil or milk, often leaving other more valuable goods in place.
Following the riots, the President made a speech in which he recognized the difficulties which young people have been facing and promised a series of measures to address them. It remains to be seen how and in what way such commitments will be made real. You find the same situation in many African countries, in which young people see no clear future for themselves. They ask questions about what will happen to them but there are no answers forthcoming; speeches from public leaders are not convincing, and they see continuing malpractice in governance and management of the state’s affairs. Increasingly they recognize, often correctly, that things do not work right because the country is poorly governed.
This is an extremely serious question, and it is highly likely that this sort of situation will become much more common because much has changed over the last 20 or 30 years. Today, many young people are well-educated, social networks provide a means to amplify any messages, whether positive or damaging; civil society has become more mature and keeps a closer eye on questions of liberty, democracy and governance. Our political leaders can no longer close their eyes to this new reality, which will catch up with them sooner or later.
We’ve seen emerge in Senegal over the last few years a new form of political expression led by young people against different forms of domination, be they domestic or international. This was clearly manifest in the riots by attacks on many symbols, such as the French flag on shops, and petrol stations, considered symbols of this domination. Clearly, these are acts that should be firmly condemned, because nothing can justify them, above all because these assets belong in most part to private individuals.
The demonstrations only lasted three days but their scale has generated major consequences. This crisis has also shown the central role of people and institutions with power in Senegalese society. The crisis became sufficiently severe that its resolution was no longer just a question for politicians. Without the involvement of religious leaders, the situation in the country could have degenerated into total chaos. The critical role of religious leaders was made only too evident once again. This has shown the very particular Senegalese situation in which religious and political powers are so closely connected. So, these recent events remind us that socio-religious leaders, in whom people have confidence, are of central importance, above all at a time when there is widespread disaffection with political parties.
The situation that I have just described raises the question of what kind of development model is right for our countries. People speak sometimes of Africa as the region of the world which is most likely to lead global economic growth in the decades to come. We’ve seen in recent years growth rates of 6-8% per annum in Senegal, but the health emergency has shown that this growth – which was not anyway benefitting most people – had been built on shaky foundations. Growth has been pulled along by investment in sectors with very little distributive power, leading young people to ask themselves about the government’s priorities. They argue that the large sums put into big projects would better have been invested in those sectors where many people are employed, such as farming, livestock keeping, fishing, and craftwork, which together provide most of the jobs. Ordinary people and families could have gained from growth in these sectors, with positive spin-offs into other areas like industry, transport, and tourism. But investment is much below the potential in these sectors.
As a result, most young people find themselves in the informal sector. But it seems to me that the social structure within the informal sector is undergoing rapid change since so many young people are going in with a high level of training and education, and also a greater political understanding. As a result, they are much more open to political arguments in favor of emancipation. Today we really need to understand and learn from the new discourse or narrative, with a degree of realism, taking into account the globalized nature of our economies and that of the world more generally. If we’re to re-think our relations within Senegal and with other countries, it has to be done within this broader global context.
Many countries in Africa today are thinking about a post-COVID strategy. Senegal has its Emergent Senegal Plan (PSE), which shapes its development strategy. Has there been a real shift in consciousness and thinking so that major revisions to economic growth paths are being considered, especially following the riots?
We’re thinking the same thing here in Senegal. As you say, the PSE provides a vision for 2035 that recognizes three strategic pillars, the first of which concerns the structural transformation of the economy in favor of those sectors considered best able to generate growth and development. The second pillar relates to human capital, social protection, and sustainable development, based on training and job creation for young people, putting in place social protection mechanisms for the most vulnerable groups, and the third pillar is for governance, institutions, security, and peace. I am pleased that our leaders have put forward this long-term vision because they have often in the past got us used to short-term plans, based on a lack of strategic vision.
Today it’s true that you can find much adverse comment and criticism as regards how the PSE has been put into effect. Let’s take the agricultural sector, in which there are a number of big projects envisaged, but many questions about the priorities chosen, and how investments have actually been distributed within this sector. The focus on high-value export supply chains has come at the expense of small family farmers who provide much of the food on which the Senegalese people depend. We should spend more effort seeing how best to strengthen and integrate these local supply chains, which benefit so many local producers. The PRACAS project (to rebuild and accelerate Senegalese agriculture) has been at the centre of the PSE, but is now being reassessed to deal better with these problems. But there is much more needed from the political discourse to recognize that family farming is indeed the main engine for modernizing this sector in Senegal and that family-based businesses are at the heart of the country’s economic and social development.
This is ever more important, given that COVID has demonstrated the great vulnerability of the current economic model, characterized by high levels of external dependence. That’s why the initial Priority Action Plan (PAP) of the PSE has been replaced with an Adjusted and Accelerated PAP designed around a new narrative focused on endogenous development, underpinned by the need to attain sovereign control over food, health, and pharmaceutical supplies. A strong domestic private sector is key to delivering this. One of the main lessons we’ve learned from COVID is there are limits to multilateralism, as we’ve seen with the arrival of the pandemic developed countries turn inwards, competing amongst themselves over supplies of medical products and equipment. I think no one will forget, in the early stage of the crisis, the surreal sight of two rich countries fighting over cargo containing face masks.
Regardless of the discourse about solidarity amongst nations, we have to acknowledge that when times get tough, when rich countries raise the flag of solidarity towards poorer nations, it is only at half-mast. We can see it clearly now with what people are calling “vaccine nationalism”, with developed countries arguing over who has rights over available vaccines. Meanwhile, African countries have been largely alone in their efforts to gain supplies. In Senegal, like elsewhere on the continent, vaccines are arriving drop-by-drop. So as of the end of March 2021, we have a little over 500,000 doses for an estimated need of 7-8 million doses required to vaccinate the most vulnerable people in our society. We face a long road ahead. I think it's likely to continue like this for quite a while, so let us hope that the virus will not become more deadly in the meantime. In effect, it is highly probable that Africa will not gain access to sufficient doses to protect the population. Everyone knows it, and richer nations are thinking of themselves before others.
The situation we find ourselves in has nevertheless the advantage of making it crystal clear that we need to re-think our priorities in Africa. Take Senegal, where the road to health sovereignty needs to pass through investment in health technology and the development of a domestic pharmaceutical industry. This cannot happen overnight, but the situation has forced many people to think hard. The second question relates to food self-sufficiency. Fortunately, we did not face a crisis on this front during the pandemic, but it could have been very serious if, for example, trade in food produce on international markets had been badly disrupted.
This has made us relive the situation we went through during the triple crisis of 2007-09 when finance, food, and the building industry went through a massive boom and bust. Taking lessons from this, we need to reinvest in agriculture, especially family farming, so that food self-sufficiency can be assured. Let’s feed ourselves before thinking about feeding others. The third issue is the role of the informal sector, which suffered very badly during the crisis, despite being the largest employer of people in towns and cities across the country. It’s been a real boon for the government since it welcomes all those who have been left by the wayside as they can’t find work in the formal sector. So, the government should be paying it a lot more attention. It should stop thinking of it as the default option and consider how best to make it a more attractive choice. As I have already mentioned, the informal sector has undergone major changes in its social composition. Before, you found mainly seasonal migrants from rural areas, but today it accommodates lots of people with university education and other professional training. So we need to change the perception of it. It needs to gain greater recognition and be better organized in order to appeal to younger people. The government could support its development by strengthening institutions and incentives and ceasing to see it just as a potential source of new tax revenue, which leads many in the informal sector to believe that “formalization” is just a means to be taxed more heavily.
The other area for reflection concerns the tourist sector, which has been among the worst hit by the COVID crisis. Tourism has been completely blocked because most visitors came from developed countries. When tourism is shut down, this generates multiple impacts on many other parts of the economy – crafts, farming, fishing, transport, etc. We need to think about how to re-create the tourism sector and the model on which it is based to make many of the products and services more appealing to local and regional visitors.
We shouldn’t forget that COVID-19 has also exacerbated levels of vulnerability which were already widespread across society. It is true that the state has put in place a number of mechanisms and programs to address these issues, but it represents a very major task. We should remember that the 2nd pillar of the PSE is intended to build human capital, social protection, and sustainable development. In so far as social protection is concerned, there are a number of payments made to the poorest families, such as the conditional grant of 25,000FCFA every three months, which is conditional on children under 5 being vaccinated and children being sent to school. There is also the universal health care cover which has allowed families unable to take out regular health insurance schemes to gain access to low-cost health-care. There are also other schemes focused on help to specific groups, such as the handicapped.
The government has put in place an Urgent Community Development Plan to address the big gaps in investment in public services and infrastructure between different regions, with a particular focus on rural areas. It aims to fast-track funding of water supply systems, health care, electricity supply, and transport to help open up more remote zones. Other initiatives are targeting peripheral frontier areas and offering help for young people and women to gain access to markets, under the general principle of leaving no one behind.
As discussed before, these different initiatives have commendable objectives, but they leave a lot to be desired in how they’re carried out. First, take the question of how to target these measures, in the absence of good quality data which is sufficiently disaggregated to village level; or the risks of politicization associated with the selection of beneficiaries, as criticized by some. Then there is the question of how pertinent and effective certain technical choices have been, which do not always correspond with what people want and need. For example, there have been cases reported in which villages without electrical power have been provided with equipment that runs on electricity. Also, there is the general bias that assumes that poor access to social services is most acute in rural areas. While this may be true in general, you have to recognize that some big towns and cities harbor substantial pockets where people live precarious lives, with very limited access to water, sanitation, and electrical power.
When there is flooding, people can do little. I think there is a sort of blindness towards vulnerability and marginalization in urban areas. There is then the issue of monitoring and evaluation, because, in the case of most initiatives, there is no systematic follow-up, with just a few partial accounts given by those responsible for the implementation of these activities. So there are questions about targeting, and the need to change perspective regarding where the greatest vulnerability lies. These are some of the issues – and there are others – which emerge from the COVID crisis. This means we need to think of public policy as it was before COVID and how it needs to be post-COVID.
You have talked about investments that have failed to generate sufficient social dividends for the people of Senegal. The government hopes that the recent discoveries of oil and gas will provide much-needed revenue. In your view, how might the country protect itself from the widely discussed “resource curse”, and plan for more sustainable development and clean energy?
There has been a lot of discussion in Senegal about these petrol finds and it is true that until the oil starts to actually flow, everything we hear and read can be marked down as good intentions. Putting on one side what one hears, and even the legal framework intended to manage these resources, we could say that there is at least an interest in transparency to avoid the resource curse. Senegal is a signatory to the EITI (Extractive Industries Transparency Initiative), which requires member states to publish details of earnings from different mining operations and how the revenue has been distributed. Legal requirements regarding local content means that companies are required to buy Senegalese goods and services and to employ Senegalese staff, where these are available and of the right quality. Even if this law demonstrates a certain adherence to the principle of local benefit from the nation’s resources, the true test will be whether and how the revenues generated by oil and gas actually bring benefits to the Senegalese people.
There’s been a debate about the establishment of an inter-generational fund but, in reality, the future of subsequent generations needs to be built now, and should take the form of a solid economy, built with long term sustainability in mind, buttressed by strong institutions which guarantee transparency in the use of public funds. This seems a better way to ensure a more promising future for our young people. Let’s invest in the right kind of economy now, by constructing institutions that enable the economy to generate revenues from which can grow a sufficiently stable and resilient set of economic activities.
Taking this perspective, it is vital to ensure that revenues from oil and gas support a regionally balanced pattern of economic and social development. This is even more important given the talk of the “territorialization” of public policy. This means putting the local government at the heart of design and implementation of development strategies because you cannot think of solving problems of employment just by focusing on urban centers, and on the classic private sector. It’s too simplistic and unrealistic. We need to find ways of making rural areas more attractive to young people and for the growth of SMEs.
In order to do this, the role of local government must be re-thought, above all their powers in managing natural resources in their zone, but also the creation of different forms of incentives to attract investments that might create local jobs, whether in farming, livestock-keeping, fishing, or craftwork, by putting a stronger emphasis on developing value chains linking producers to markets. Local people need support in gaining firm and secure access to land and assets with which to become more prosperous and build wealth. Without such measures, it will not be easy for the economic opportunities open to women and youth to be properly supported. We must work with local governments to identify and strengthen the economic potential of local actors.
If we fail to do this, we risk seeing land increasingly acquired by powerful national and international interests leading to growing conflict between them and local people; with the right accompanying measures, local actors can make productive use of this land rather than see it alienated for others to exploit.
Finally, we need to help young people invest in a range of new sectors. Take the digital economy, which is growing fast in Senegal. Lots of young people have gone into this sector, and given the speed of expansion, the potential in terms of growth in employment is enormous. Let’s put in place ambitious training programs, research, infrastructural construction, and incubation hubs. Senegal has the advantage of a strong telecommunications network compared with neighboring countries. Let’s make profitable use of this advantage.
But with the prospect of oil and gas revenues, we mustn’t forget our moral obligation to contribute to the fight against climate change, and the need to follow a growth model which privileges sustainability and clean energy. Senegal has been pursuing a mixed energy model, with a growing share of electricity coming from green sources. Today, the country is at about 20% of electricity from renewable sources, with an objective of 30% in the short term. With oil and gas in the offing, we mustn’t see the abandonment of this progress, because not only is this a valuable contribution to addressing climate change, but these new forms of energy offer a considerable number of jobs and are very well-suited to a rapid roll-out of energy access, especially in distant areas which have little prospect of getting onto the main grid network.
About the COVID-19 and Africa series: a series of conversations conducted by Dr. Folashadé Soulé and Dr. Camilla Toulmin with African/Africa-based economists and experts about their perspectives on economic transformation and how the COVID situation re-shapes the options and pathways for Africa’s development - in support of INET’s Commission on Global Economic Transformation (CGET).
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« La jeunesse africaine n’a pas assez de visibilité sur son avenir »
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Bara Guèye capitalise plus de 35 ans dans la pratique du développement Afrique de l’Ouest. Son activité professionnelle et ses travaux scientifiques ont porté sur la recherche-action participative et la promotion des bonnes pratiques en matière de gouvernance (locale et des ressources naturelles), sur l'agriculture familiale durable, et le renforcement de la résilience des communautés face au changement climatique et la promotion des modèles de financement décentralisé de l’adaptation.
Il a commencé sa carrière professionnelle comme enseignant et chercheur à l'Ecole Nationale d'Economie Appliquée (ENEA) du Sénégal. Il a ensuite travaillé pour le Programme des Zones Arides de l'International Institue for Environment and Development (IIED/UK) pendant plus de 10 ans avant de mettre en place en 2005, l’ONG Innovation, Environnement et Développement en Afrique (IED Afrique) dont il a été le Directeur jusqu’en 2019. Il a publié plusieurs articles et rapports dont Guèye, B. (2014). Spécialisation ou diversification? Perspectives divergentes sur la riziculture irriguée dans trois grands barrages au Sahel.
Après une première année de mesures pour lutter contre la pandémie du Covid-19, quelle est la situation actuelle au Sénégal ? Quelle est votre perception sur les actions gouvernementales, et non gouvernementales mises en œuvre ?
Nous avons eu notre premier cas de Covid-19 au tout début du mois de mars 2020. Cela fait donc un an et quelques jours. C’est vrai qu’au début, le Sénégal comme tous les autres pays, a été surpris et secoué par cette nouvelle pandémie. Je pense qu’au niveau mondial, même les pays développés n’avaient pas de stratégies claires pour y faire face ; ce qui a créé une situation de panique généralisée. Cette situation a quand même poussé le Sénégal à prendre très tôt des mesures extrêmement difficiles pour le pays et pour la population, afin de contenir la maladie. La population a adhéré très tôt à ces mesures mais tout le monde était inquiet, ce qui était à la fois un problème mais aussi un avantage, car cette peur de la maladie a fait que toutes les mesures, aussi difficiles qu’elles aient été, ont été acceptées dès le départ. Même au plan politique, on a noté une sorte d’union sacrée entre le gouvernement, la société civile et les partis d’opposition. Tous les autres agendas étaient momentanément rangés dans les tiroirs. Cette adhésion populaire a donc fait que toutes les mesures proposées ont été acceptées : couvre-feu, régulation plus stricte des marchés ; fermetures des commerces non essentiels, interdiction de certains modes de transports et limitation du nombre de passagers dans d’autres, interdiction des déplacements interurbains, et même la fermeture des lieux de culte, etc. Toutes ces mesures étaient prises simultanément, et avaient commencé à causer des dégâts économiques et sociaux.
Ceux-ci étaient tellement forts qu’ils ne pouvaient pas être appliqués dans la durée parce que nous avons une économie qui dépend essentiellement du secteur informel, et une personne qui est dans ce secteur ne peut pas rester longtemps sans travailler. Il faut noter que nous avons plus de 80 % des acteurs économiques qui opèrent dans le secteur informel en milieu urbain et la majorité gagne sa vie au jour le jour ; ce qui est différent de la situation des personnes avec un emploi rémunéré dans le secteur public, ou le secteur privé et qui constituent une infime minorité. Pour amortir les effets économiques de ces différentes mesures sur la vie des ménages les plus vulnérables et des secteurs économiques les plus touchés (tourisme, artisanat, transport, entre autres), l’Etat a pu dégager dès le départ une somme de mille milliards (1000 000 000 000) FCFA ; ce qui pour le Sénégal constituait quand même un énorme sacrifice financier, étant donnée la faible taille de notre économie. Ces fonds ont permis de distribuer des kits alimentaires, de prendre en charge les paiements des factures d’eau et d’électricité pour un trimestre pour les ménages les plus vulnérables, pour leur permettre de passer ce cap difficile. Il y avait également un certain nombre de mesures pour venir en appui à certains secteurs comme le tourisme, l’artisanat, les transports, les activités culturelles, entre autres.
Même si elle présentait beaucoup de limites au départ, une stratégie de communication a également été mise en place pour accompagner ces mesures ; avec l’implication des médias, des organisations communautaires de base des autorités religieuses, des syndicats, des associations de jeunes et de femmes, etc. Tout le monde a été mis à contribution, et cela a contribué à mieux faire accepter les restrictions. Le résultat de toutes ces actions a été que le pays a réussi à gérer assez convenablement cette pandémie, de sorte que vers le mois d’Octobre 2020, on avait noté une baisse extrêmement importante des cas de COVID.
Mais en même qu’on constatait cette évolution positive de la pandémie, le respect des gestes barrières et des autres mesures citées plus haut devenait de plus en plus faible. On sentait que le seuil de tolérance sociale de ces restrictions était atteint, ou même dépassé. Les gens ont commencé à souffrir de ces mesures, ce dont le Gouvernement a pris conscience en disant simplement qu’il faut apprendre à vivre avec le virus. Ce qui voulait dire, retourner aux activités en essayant de respecter les mesures barrières. Cette situation était renforcée par le fait qu’avec la baisse des cas de contamination, la population en avait tiré la conclusion que la maladie était vaincue, et malheureusement cela s’est traduit par un retour à un laisser-aller quasi-total. Les gens sont retournés à leur mode de vie d’avant pandémie avec le non-respect des gestes barrières dans les espaces publics, les transports, les cérémonies familiales, etc. L’Etat aussi ne pouvait plus continuer à faire pression, en raison des conséquences économiques, sociales et politiques. La conséquence est qu’il y a eu à partir du mois de novembre 2020 une explosion de nouveaux cas. Selon certains, cette nouvelle vague pouvait également être en partie liée à la baisse de la température.
Malheureusement, quand l’Etat a voulu réimposer de nouvelles restrictions pour un peu contenir cette nouvelle vague, il n’y avait plus le même niveau d’adhésion. Malgré cela, le couvre-feu a tout de même été réinstauré à Dakar et Thiès, qui concentrent à plus de 80% des cas COVID au Sénégal. Mais dans l’ensemble, les gens ne respectent plus les gestes barrières. L’état d’urgence sanitaire a pris fin le 19 mars 2021, cela veut dire que toutes les restrictions sont levées, sauf le respect des gestes barrières, et la vie reprend son cours normal. Il est vrai qu’avec les événements violents qui se sont produits récemment, l’Etat n’avait plus d’autre choix que d’assouplir considérablement ces restrictions. Parmi les raisons des différentes frustrations qui se sont exprimées durant ces manifestations , il y a le sentiment que les ressources qui ont été dégagées pour appuyer les populations les plus vulnérables et les secteurs les plus affectés n’ont pas été gérées dans la transparence et l’équité. Beaucoup de griefs ont été formulés à ce sujet. Selon certains, des secteurs économiques ou groupes sociaux ont été laissés en rade.
L’expiration du délai légal de l’état d’urgence sanitaire a donc donné à l’Etat une belle excuse pour lever les mesures de restrictions. Heureusement que nous constatons aujourd’hui une certaine tendance à la baisse des cas de contamination et de décès, même s’il est encore trop tôt pour en déduire une quelconque conclusion.
On parle beaucoup des actions qui sont prises par le Gouvernement pendant cette période de pandémie, mais est-ce que vous avez également des exemples d’actions non gouvernementales, notamment communautaires qui ont été prises au long de ces différents cycles de la pandémie ?
Oui, il y a eu beaucoup d’exemples, parce que nous avons différents types d’acteurs communautaires ici, qui ont été mobilisés chacun en fonction de son profil et du type d’appui qu’il peut apporter ou de message qu’il peut faire passer. Au niveau communautaire, on peut mentionner, les autorités religieuses qui ont une très grande influence auprès de la population et qui se sont mobilisées très tôt et prêché par l’exemple, afin d’inviter les membres de leurs communautés religieuses à respecter les mesures édictées. On voit, par exemple, que ces leaders religieux respectent scrupuleusement le port systématique du masque lors de leurs sorties publiques. C’est symboliquement très important, car il existe encore des personnes qui doutent de l’existence de la maladie, ou qui la considèrent comme une création des pays développés pour contrôler la démographie des pays pauvres. Si une telle information est diffusée dans une société où les gens n’ont pas les outils de discernement nécessaire, cela peut effectivement avoir un effet négatif sur la communication.
Ensuite, il y a les chercheurs, surtout les anthropologues, qui se sont mobilisés très tôt dans les zones de concentration des cas de COVID pour mener des actions de recherche-action, pour mieux comprendre les comportements de la population face à la maladie, afin de mieux orienter les actions de sensibilisation. Ailleurs, ce sont des initiatives menées par les associations sportives et culturelles ; à travers des activités de mobilisation sociale ou des compétitions entre quartiers autour du COVID à la place des activités sportives habituelles.
On peut également mentionner l’engagement des relais communautaires appelés Badienou Gokh « marraines du quartier », constituées de femmes bénévoles qui travaillent autour des questions de santé, de la salubrité des quartiers, des questions de sécurité, etc. Ce sont des leaders d’opinion qui sont mobilisés à chaque fois qu’il y a des activités de mobilisation sociale. Ces femmes sont présentes dans toutes les régions du pays et ont joué un rôle très important dans la mobilisation autour des activités de lutte contre la pandémie. On peut aussi souligner le rôle important des médias aussi, qui ont été les premiers à se mobiliser ; tout comme les artistes, ou les musiciens qui ont activement participé dans les actions de sensibilisation. Il y a eu donc plusieurs sortes d’initiatives dont certaines très spontanées et endogènes et d’autres appuyées par l’Etat ou des ONG.
Toutefois, avec le temps, le changement d’attitude et de comportement face à la pandémie était accompagné d’une baisse d’intensité dans les campagnes de mobilisation sociale parce que ce sont des types d’activités qu’il est difficile à maintenir dans la durée, surtout si elles sont conduites de façon bénévole. Mais elles ont beaucoup contribué dans les résultats obtenus. D’ailleurs le Sénégal a été cité en exemple dans sa gestion de la pandémie, grâce à la stratégie d’engagement multi-acteurs et à l’effort de transparence dans la publication des chiffres. Depuis le premier cas, un bulletin journalier est présenté tous les jours à la Télévision nationale, à travers les radios et dans les sites d’information en ligne.
Toujours sous cet angle sociétal et gouvernemental aussi, quel est votre regard sur les soulèvements récents au Sénégal, les différentes manifestations, qui comme vous l’avez dit, sont une combinaison de plusieurs facteurs et de plusieurs frustrations. Je voulais savoir qu’elle est votre regard sur ce mouvement ? En quoi cela reflète-t-il le besoin de changer le modèle de développement au Sénégal ?
Le fait déclencheur de ces manifestations est relatif à un problème privé entre deux citoyens, qui devrait normalement être réglé par la justice sans trop de bruit, mais la situation a vite pris les allures d’un feuilleton politico-judiciaire. Comme je l’ai déjà mentionné, elle est arrivée à un moment où il y’avait déjà un trop-plein de frustrations de toutes sortes au sein de la population, surtout les jeunes. Je pense que cette situation a agi comme une étincelle jeté sur de l’essence. Si on regarde la configuration du mouvement et la manière dont les manifestants se sont exprimés, on voit bien que ce n’étaient pas seulement des questions politiques qui avaient fait sortir les gens sur le terrain. Il y a d’abord les frustrations simplement accumulées et causées ou exacerbées par les conséquences du COVID.
Pendant plus d’un an, la liberté de mouvement des populations a été restreinte ; les jeunes ne pouvaient plus pratiquer leur sport dans le quartier ou aller regarder un match de football ou assister à un combat de lutte, sport très populaire, alors que les activités de loisirs sont importantes pour eux ; ceux qui dépendent des activités du secteur informel et qui ont vu leur moyen de subsistance complètement anéanti ; les candidats à l’émigration clandestine, qui étaient bloqués et n’avaient plus la possibilité de partir pour différentes raisons ; etc.. A côté, vous avez toute la classe politique qui était déjà à couteaux tirés autour de différents contentieux, etc. La jeunesse avait l’impression que leur avenir était en train de leur être confisqué, et ils pointaient du doigt des responsabilités aussi bien aux plans national qu’international. En même temps, pendant qu’ils souffraient des effets de la crise, ils avaient l’impression que d’autres profitaient de leur position de pouvoir pour tirer leur épingle du jeu.
Les jeunes en avaient assez de voir toutes leurs libertés complètement bâillonnées, des déplacements réduits au strict minimum. Un mouvement populaire a toujours un caractère multidimensionnel dans ses manifestations. Comme je l’ai mentionné, la majorité des personnes qui étaient sorties dans la rue n’ont aucune appartenance politique. Par exemple, on a vu que certaines personnes ont profité des casses qui ciblaient des magasins d’une enseigne française, pour se procurer des denrées de première nécessité comme le riz, le sucre, l’huile ou le lait, laissant sur place les autres produits.
A la suite de ces manifestations le Président a tenu un discours pour reconnaître les difficultés que rencontrent les jeunes et promettre des mesures. Il reste à voir comment et avec quelques réponses il va matérialiser les engagements pris. On vit la même situation dans la plupart des pays africains, avec une jeunesse qui n’a pas de visibilité sur son avenir. Elle se pose des questions auxquelles elle n’a pas de réponses et celles qui lui viennent des pouvoirs publics ne les convainquent pas ; ceci d’autant qu’à côté elle voit des pratiques en matière de gouvernance qui laissent à désirer. Elle pense ainsi, et souvent à juste raison, que les choses ne marchent pas parce que les pays sont mal gouvernés.
Cette question est extrêmement sérieuse et il est fortement probable que ce genre de situations va s’accentuer, parce que le contexte actuel est très différent de celui d’il y a 20 ou 30 ans. Aujourd’hui le niveau de formation des jeunes a beaucoup augmenté, les réseaux sociaux sont là pour amplifier tous les discours ; qu’ils soient bons ou mauvais ; la société civile est devenue plus mature et plus vigilante, l’exigence de liberté et de démocratie plus forte. Les décideurs politiques ne peuvent plus continuer à fermer les yeux sur cette réalité ; qui finira par les rattraper tôt ou tard.
En effet, depuis quelques années on note l’émergence au Sénégal d’une nouvelle forme d’expression politique, portée par les jeunes contre les différentes formes de domination ; qu’elle soit d’origine interne ou internationale. Celle-ci s’est manifestée durant ces manifestations par une attaque de symboles, notamment des enseignes françaises dont des magasins et des stations d’essence étaient considérées comme les symboles de cette domination. Naturellement ce sont des actes qu’il faut dénoncer avec la plus grande fermeté, parce que rien ne peut les justifier, d’autant plus que ces biens appartiennent pour la plupart à des personnes privées.
Ces manifestations n’ont duré que 3 jours mais ont eu une ampleur et des conséquences importantes. Mais cette crise a aussi confirmé la place importante des régulateurs sociaux dans la société sénégalaise. La crise avait atteint un tel niveau de gravité que sa résolution était devenue hors de portée des seuls acteurs politiques. Sans l’implication des autorités religieuses, la situation aurait dégénéré et mené le pays vers un chaos total. La place importante de ces autorités religieuses s’est donc, une fois de plus, affirmée de façon remarquable. Ceci reflète sinon une exception du moins une particularité sénégalaise concernant la relation entre le pouvoir politico-temporel et le pouvoir religieux. Les événements récents sont là pour nous rappeler l’importance d’avoir des régulateurs socioreligieux en qui la population a confiance ; surtout dans une période où on note une désaffection de plus en plus grande envers les partis politiques.
Maintenant, cette situation que je viens de décrire, pose aussi la question du modèle de développement économique pour nos pays. On parle de l’Afrique comme la région qui va porter la croissance mondiale dans les années à venir. On a vécu au Sénégal pendant ces 4-5 dernières années des taux de croissance élevés de l’ordre de 6 à 8%, mais la crise sanitaire a montré que cette croissance, qui ne profitait pas déjà à la population, était de surcroit bâtie sur un socle qui n’est pas solide. Elle était tirée par des investissements et des secteurs avec un faible effet de redistribution. Ce qui pousse les jeunes surtout à s’interroger sur les ordres de priorités définis par le gouvernement. Ils pensent que les sommes d’argent mobilisées pour financer certains grands projets auraient mieux servi si elles étaient orientées vers des secteurs créateurs d’emplois massifs pour eux. L’agriculture, l’élevage, la pêche, l’artisanat sont des secteurs qui emploient la majorité des personnes actives. Les fruits de leur croissance sont avant tout captés directement par les ménages ; avec un effet d’entrainement important dans les autres secteurs (industries, transport, tourisme, etc.). Mais les investissements dans ces secteurs restent encore très en deçà de leur potentiel de développement actuel.
Ce qui fait que la majorité des jeunes se retrouve dans le secteur informel. La structure sociale de ce secteur est en train de changer fondamentalement car beaucoup de jeunes y entrent avec un niveau de formation de plus en plus élevé et avec une culture politique plus développée. Donc ils sont plus ouverts au discours politique « émancipateur ». Maintenant il est important de lire ces nouveaux discours avec réalisme, en prenant en compte le caractère globalisé de l’économie et du monde en général. C’est dans ce contexte qu’il faudra repenser nos relations avec nous-mêmes et avec les autres pays.
Je crois qu’il y a beaucoup de pays en Afrique qui réfléchissent en ce moment sur une stratégie post COVID. Le Sénégal a d’ailleurs le Plan Sénégal Emergent (PSE) comme plan national de développement. Est-ce qu’il y a une vraie prise de conscience et peut être une empathie pour vraiment changer de direction maintenant, suite aux événements ?
On a la même réflexion ici au Sénégal. Comme vous le dites, le PSE traduit la vision du Sénégal à l’horizon 2035. Il est articulé autour de 3 piliers stratégiques dont le premier porte sur la transformation structurelle de l’économie à travers des investissements massifs dans des secteurs considérés comme porteurs de croissance et de développement. Le deuxième pilier est relatif au capital humain, la protection sociale et le développement durable, par la formation, la création d’emploi surtout pour les jeunes, la mise en place de mécanismes de protection sociale pour les groupes vulnérables, etc. et le troisième porte sur la gouvernance, les institutions, la sécurité et la paix. Je pense que c’est une bonne chose de formuler une vision à long terme ; parce que nos décideurs nous ont souvent habitués à des modèles de planification sur des horizons temporels courts, non adossés à une vision.
Maintenant, il est vrai qu’il y a beaucoup de commentaires et de critiques qu’on peut formuler sur la mise en œuvre, et cela dépend de la perception de chacun. Par exemple si vous prenez le secteur agricole, il y a un certain nombre de projets qui sont prévus, mais il y a beaucoup à dire sur le choix des priorités et la répartition des investissements destinés à ce secteur. L’accent mis sur les niches à forte valeur ajoutée destinées aux marchés extérieurs s’est fait au détriment d’un développement plus soutenu de l’agriculture familiale, qui nourrit la population sénégalaise. Les chaines de valeur qui soutiennent cette agriculture familiale ont besoin d’être plus développées et plus intégrées pour générer plus de valeur ajoutée pour les producteurs locaux. Le PRACAS (Programme de Relance et d’Accélération de la Cadence de l’Agriculture Sénégalaise) qui est la composante agricole du PSE, a essayé de corriger ces imperfections, mais il reste encore beaucoup d’effort à faire et un discours politique plus affirmé qui reconnait cette agriculture famille comme le moteur de la modernisation de l’agriculture sénégalaise, ainsi que plus globalement du développement économique et social du pays.
Ceci est d’autant plus important que le COVID a mis en évidence la forte vulnérabilité du modèle économique caractérisé par une très forte dépendance du Sénégal de l’extérieur. C’est pourquoi à la place du Plan d’Actions Prioritaires (PAP) initial du PSE il a été mis en place un PAP Ajusté et Accéléré (PAP 2A) avec un nouveau narratif sur le développement endogène sous-tendu par la quête des souverainetés alimentaire, sanitaire et pharmaceutique et porté par un Secteur Privé national fort. Une des leçons du COVID-19, c’est d’abord de se rendre compte des limites du multilatéralisme, car dès la crise s’est installée, les pays développés se sont repliés sur eux-mêmes et sont entrés quelquefois en concurrence pour accéder à certains produits et équipements sanitaires. Tout le monde se rappelle cette image surréaliste au début de la pandémie, quand deux pays développés étaient à couteaux pour se disputer une cargaison de masques de protection.
Malgré le discours ambiant sur la solidarité entre nations, on se rend compte qu’en réalité lorsqu’il y a une crise grave, les élans de solidarité des pays développés envers les pays pauvres sont en berne. On le voit actuellement avec ce qui est convenu d’appeler le nationalisme vaccinal, où les pays développés se disputent l’accès aux doses disponibles. Pendant ce temps, l’Afrique se bat presque toute seule, pour pouvoir s’approvisionner en vaccins. C’est ainsi qu’au Sénégal comme partout en Afrique, les vaccins arrivent à compte-goutte. Vers la fin de mars 2021, on est à un peu plus de 500,000 doses pour des besoins estimés à environ 7 à 8 millions de doses pour pouvoir vacciner toutes les cibles prioritaires. Le chemin est encore long. Je pense que cette situation va encore durer, donc espérons simplement que la pandémie ne va pas s’aggraver entretemps. En effet, il est quasi-certain que l’Afrique ne va pas accéder assez tôt à une quantité suffisante de vaccins pour pouvoir protéger sa population. Tout le monde le sait, les pays développés se soucient d’eux-mêmes d’abord, avant de penser aux autres.
Cette situation a au moins le mérite de susciter une prise de conscience pour dire que il faudrait maintenant qu’on essaie de revoir nos priorités en Afrique. Au Sénégal, par exemple, la nouvelle priorité portant sur la construction d’une souveraineté sanitaire passera avant tout par la mise à niveau du plateau technique sanitaire, et le développement d’une industrie pharmaceutique. Tout cela ne pourra pas être réglé à court terme, mais à l’heure actuelle, il y a une certaine prise de conscience. La deuxième chose c’est la question de la sécurité alimentaire parce qu’heureusement qu’on n’a pas eu de difficultés d’approvisionnement, mais la situation aurait pu être dramatique si par exemple les mouvements de produits alimentaires sur le marché international étaient sérieusement perturbés.
Cela nous aurait fait revivre les mêmes situations que celles vécues durant la triple crise financière, alimentaire et immobilière de la période 2007-2009. Il faut tirer les leçons de cette situation et faire en sorte que sur le plan agricole, on puisse régler cette question de l’autosuffisance alimentaire, en mettant beaucoup de ressources et en appuyant l’agriculture familiale. Se nourrir soi-même avant de nourrir les autres. La troisième chose est le rôle important du secteur informel. Il a beaucoup souffert de la crise et pourtant c’est le plus grand réservoir d’emplois en milieu urbain au Sénégal. Il vient en appui à l’Etat et accueille tous ceux que le système d’emploi formel à laissés sur le bord de la route. Donc, l’Etat a intérêt à lui prêter beaucoup plus d’attention. Il doit cesser d’être considéré comme un choix par défaut, mais plutôt comme un secteur attractif. Comme je l’ai déjà mentionné, ce secteur a connu de grandes mutations dans sa composition sociale. Avant on y retrouvait des migrants saisonniers venus du monde rural, mais aujourd’hui il accueille beaucoup de diplômés des universités et autres écoles professionnelles. Il faut donc changer la perception. Il doit jouir d’une plus grande reconnaissance et être mieux organisé afin d’être plus attractif pour les jeunes. L’Etat devra accompagner son développement par des institutions et des incitations et cesser de le considérer simplement comme une potentielle niche fiscale à capter ; ce qui pousse les acteurs de ce secteur à penser que formalisation veut dire beaucoup plus d’impôts à payer.
L’autre réflexion est en relation avec le secteur du tourisme. Il a été l’un des secteurs les plus durement frappés par la crise engendrée par le COVID-19. Ce secteur-là était complètement bloqué parce que l’essentiel des touristes viennent des pays développés. La crise du tourisme a irradié sur plusieurs secteurs qui lui étaient comme l’artisanat, l’agriculture, la pêche, le transport, etc. Donc il y a une réflexion à faire pour voir par exemple comment refonder la politique touristique et le modèle économique sur lequel elle est bâtie, afin de rendre les produits touristiques plus attractifs, plus accessibles aux marchés local et régional
Mais nous ne devons pas oublier que le COVID-19 a aussi exacerbé les situations de précarité et de vulnérabilités qui étaient déjà répandues dans la société. Il est vrai que l’Etat a mis en place un certain nombre de mécanismes et de programmes pour adresser cette question, mais il s’agit d’un chantier colossal. Il faut rappeler que le deuxième pilier du PSE porte sur le capital humain, la protection sociale et le développement durable. Pour ce qui concerne la protection sociale, Il y a d’abord les bourses de sécurité familiale destinées aux familles les plus démunies, qui consistent en une allocation trimestrielle forfaitaire de 25000 FCFA, associée à l’engagement d’inscrire les enfants en âge de scolarisation, la vaccination des enfants de moins de 5 ans ou l’inscription à l’Etat, entre autres. Il y’a également la couverture maladie universelle, qui permet aux familles qui n’ont pas accès aux mécanismes conventionnels d’assurance maladie d’avoir accès à des soins à moindre coût. Il y’a d’autres programmes qui ciblent des groupes spécifiques comme les handicapés.
Au plan de la correction des disparités dans la répartition territoriale des infrastructures et services publics, le gouvernement a mis en place le Plan d’Urgence de Développement Communautaire (PUDC) qui est un programme d’investissement qui est axé sur les zones rurales essentiellement, et donc qui est un programme qui est réalisé en mode fast-track pour la réalisation d’infrastructures d’accès à l’eau, à la santé, à l’électricité, de désenclavement, etc. Il y’a d’autres initiatives qui ciblent les zones frontalières ou qui sont destinés à l’insertion des jeunes et des femmes dans les circuits économiques, et la prise en compte du principe ODD de ne laisser personne en rade.
Encore une fois, ces différentes initiatives sont bien louables dans leur conception mais leur mise en œuvre laisse apparaitre beaucoup de limites. D’abord au niveau de la stratégie de ciblage avec l’absence de données statistiques suffisamment fiables et désagrégées jusqu’au niveau village, ou la politisation du processus de sélection des bénéficiaires comme le dénoncent certains. Ensuite, il y a la question de la pertinence et de l’efficacité en relation avec les options techniques qui ne correspondent pas toujours aux besoins des populations. Par exemple il a été rapporté des cas où des villages ne disposant d’électricité ont été dotés d’un équipement qui fonctionne à l’énergie électrique. De même, il y a une sorte de biais territorial, tendant à faire croire que la question de l’accès aux services sociaux de base se posait plus en milieu rural. Cela est vrai dans l’absolu, mais on se rend compte que les grandes villes abrient aussi beaucoup de poches de précarité, avec une grande concentration humaine et un accès limité à l’eau, l’assainissement et l’électricité.
Quand il y a des inondations, les gens ne peuvent rien faire. Je pense donc qu’il y a une sorte de perception qui est assez biaisée sur la distribution territoriale de la précarité et de la marginalisation. Il y’a enfin la question du suivi et de l’évaluation, car pour la plupart de ces initiatives, les retours d’expériences ne sont pas systématiques ou se limitent seulement aux comptes rendus souvent partiels ou biaisés qu’en font ceux qui sont chargés de leur réalisation. Donc tout cela pose la question du ciblage et la nécessité de changer de perspective en ce qui concerne la distribution territoriale de la précarité et de la vulnérabilité. Voilà autant de questions -et il y en a encore d’autres tout aussi importantes- qui émergent à la suite de cette crise liée au COVID. Donc je pense qu’il y’aura forcément l’avant et l’après COVID en termes de conception de la politique publique.
Vous mentionnez la question des investissements, qui ne produiraient pas suffisamment de dividendes sociaux pour les populations sénégalais. On sait qu’il y a eu des découvertes pétrolières et que le gouvernement a beaucoup d’attente et voit cela comme une opportunité de ressources. A votre avis comment est-ce que le pays pourrait se protéger de ce qu’on appelle généralement « la malédiction des ressources » en tenant compte des questions de développement durable et d’énergie propre ?
Je pense qu’il y a beaucoup de discussion au Sénégal autour du pétrole et c’est vrai que tant que le pétrole n’est pas encore là, tout ce qu’on entend ou lit doit être rangé dans le registre des bonnes intentions. Donc si on se fie aux discours et même au cadre juridique pour organiser la gestion future de ces ressources, on peut dire qu’il montre l’expression d’une certaine volonté de transparence pour éviter ce syndrome de la malédiction des ressources. Le Sénégal a déjà adhéré à l’initiative ITIE (Initiative pour le Transparence des Industries Extractives) qui impose aux pays membres de publier les revenus tirés de l’exploitation des différentes ressources minières, ainsi que leur répartition. La loi sur le contenu local permet également d’imposer aux compagnies en charge de l’exploitation des ressources minières en général d’utiliser autant que les ressources et les capacités existantes le permettent, les compétences, produits, services d’origine sénégalaise. Même si cette loi traduit une certaine volonté politique de valorisation des ressources locales, l’enjeu fondamental sera de faire en sorte que les revenus tirés de l’exploitation des ressources pétrolières et gazières bénéficient effectivement à la population sénégalaise.
Concernant le débat sur la provision d’un fonds d’investissement intergénérationnel, je pense que l’avenir des générations futures se prépare maintenant en faisant en sorte que leur soit léguée une économie solide construite dans une perspective de durabilité, et adossée à des institutions fortes qui garantissent une gestion transparente des revenus. Cette option me semble mieux indiquée pour garantir un avenir encore plus prometteur pour les futures générations. Il faut investir dans l’économie dès maintenant, il faut changer le cadre institutionnel pour que l’économie soit elle-même en mesure de générer suffisamment de ressources pour que les futures générations héritent d’une économie suffisamment solide.
Dans cette perspective, il sera important de veiller à ce que les ressources tirées de l’exploitation du pétrole et du gaz appuient le développement des territoires pour en faire des pôles de développement économique et social. Ceci est d’autant plus important que le discours officiel est axé sur la territorialisation des politiques publiques. Je pense que dans cette perspective, les collectivités territoriales doivent être au centre de la mise en œuvre de la stratégie de développement ; parce qu’on ne peut pas régler les problèmes d’emploi en pensant qu’il faut seulement confiner l’offre au niveau des pôles urbains ou à s’appuyer sur le secteur privé classique. C’est une vision simpliste et irréaliste. Il faudra rendre les territoires plus attractifs pour les jeunes et pour les petites et moyennes entreprises nationales.
Pour cela, il faut que le rôle des collectivités territoriales soit revu, surtout pour ce qui concerne la gestion des ressources naturelles, mais également la création de différentes formes d’incitations pour attirer les investissements, créer des emplois locaux que ce soit au niveau de l’agriculture, de l’élevage, de la pêche, de l’artisanat en mettant l’accent sur le développement des chaines de valeurs. Le plus important c’est d’aider les populations locales à avoir un accès sécurisé et durable à des actifs économiques qui constituent les principaux leviers de lutte contre la pauvreté et le point de départ du processus de création de richesse. Sans cela, il sera difficile que les pouvoirs économiques des femmes et des jeunes puissent être renforcés là. Il faut travailler avec les collectivités territoriales au niveau local pour identifier les potentialités et les stratégies pour accompagner les acteurs économiques locaux.
Sinon, on risque de continuer d’assister à des situations où les ressources foncières sont accaparées par des investisseurs nationaux puissants ou internationaux et cela se termine par des conflits avec la population ; alors qu’avec l’accompagnement nécessaire, les acteurs locaux peuvent mettre en valeur ces terres sans qu’elles ne soient aliénées par des acteurs externes.
Ensuite, aider les jeunes à investir dans d’autres secteurs. Il y a l’économie numérique qui se développe assez rapidement au Sénégal. Beaucoup de jeunes invertissent ce terrain-là. Le potentiel en termes d’emploi est énorme et il s’agit d’un secteur en forte croissance. Des programmes ambitieux de formation, de recherche, de construction d’infrastructures, et d’incubation d’initiatives devront être mis en place. Le Sénégal a cet avantage de disposer de bonnes infrastructures de télécommunication, comparé à d’autres pays de la sous-région. Il faudrait donc mettre à profit cet avantage compétitif.
Mais la perspective de l’exploitation du pétrole ne doit pas nous faire oublier notre obligation morale de contribuer à la lutte contre le changement climatique en adoptant un modèle de développement durable avec des options énergétiques plus propres. Le Sénégal s’est lancé dans une option de mix énergétique en investissant de plus en plus le domaine des énergies vertes. Aujourd’hui le pays se situe un peu au-dessus de 20% avec un objectif de 30% à court terme. Il ne faudrait que la perspective de l’exploitation prochaine du pétrole ne remette pas en cause cet élan, car au-delà de leur contribution dans la lutte contre le changement climatique, les énergies nouvelles sont des niches d’emplois très importantes et offrent également des solutions qui sont parfois plus adaptées pour répondre plus rapidement au besoin de certaines zones enclavées.
A propos de la série COVID-19 and Africa : une série d’entretiens menées par Dr Folashadé Soulé et Dr Camilla Toulmin avec des économistes et experts africains basés sur le continent, sur leur analyse de l’impact du COVID-19 sur la transformation économique et les trajectoires du développement en Afrique – en appui à la Commission sur la transformation économique mondiale (CGET)
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