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Inclusive growth and the fight against inequalities: the experience of the Emerging Senegal Plan

07/09/2020
Source : financialafrik.com
Categories: General Information

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By DR. CHEIKH KANTE – Minister, to the President of the Republic, in charge of the Monitoring of the PES.

To meet economic policy objectives, and to combat scarcity, quantitative growth of goods and services has always been particularly favoured. Over the years, the social fractures generated by this mode of wealth creation have shown their limits, due to the increase in inequalities it generates. In recent years, in fact, many experts consider that growth is not necessarily synonymous with emergence and development: growth without job creation, growth that which increases inequalities, growth without progress towards democracy, one that is accompanied by a loss of cultural identity, growth without the governance necessary to preserve resources for current and future generations.

Faced with this unequivocal observation, a new concept was born, that of inclusive growth which, relativizing traditional growth essentially quantitative, is based on an ethical approach to economic development, capable of generating a sustainable improvement in the well-being of communities. it is believed that societies can choose between high growth correlated with high inequality (as in the United States), or more equality and social equity, but at the cost of lower growth (as in Sweden or France).


 
Recently, the work of the OECD Learning Centre has established the end of a well-established and largely flourishing truth, that of a "trade off" between inequality and growth. For these experts, inequality can in no way be a factor of additional growth, in many cases it is the cause of lower growth. This work shows that over the last twenty years, the average evolution of inequalities in developed countries has caused them to lose 0.35 points of growth per year over 25 years, a cumulative loss of 8.5% of GDP. For example, this OECD report estimates that rising inequality has cost more than 10 points of growth in Mexico and New Zealand, nearly 9 points in the United Kingdom, and about 6 to 7 points in Italy and the USA. On account, a more egalitarian situation has helped to increase GDP per capita in Spain, France and Ireland.

Experts no longer believe in the classic argument that growth is based on inequality as normal. On the contrary, they argue that inequality leads to a loss of human capital that weakens growth.
It is therefore clear that redistributive policies, which reduce inequalities, are not a brake on economic growth, even if the measures taken in this direction do not always have the same positive effects. Poorly targeted redistribution policies that do not focus on the most effective tools can result in a waste of resources and sustainable sources of inefficiency.

Angus Deaton, the 2015 Nobel Laureate of the Year, believes that progress is a source of inequality, which widens the gap between those who benefit from it and those who do not. Temporary, these inequalities are acceptable. Difficulties arise when information from knowledge and technology does not ultimately benefit everyone. For the father of the now famous concept of the "poverty line", something is changing. For several decades, a certain approach had been imposed, which considered that removing obstacles to the free play of market forces was a sufficient condition for achieving prosperity that would benefit all. This theory is largely over and, even if it can explain, to a certain extent, the take-off of certain countries such as China, India, or Brazil, it comes up against two obstacles: a strong acceleration of social inequalities, and the resurgence and persistence of extreme poverty. It is therefore not enough for the rich to get rich for the poor to benefit automatically, via a "trickle-down" effect. Part of Trump's success can probably be explained by this conception of the economy that prevails in the United States. Since ancient times, the debate on the relationship between growth, justice and inequality has always fascinated people's minds. Aristotle, taking up the ideas of his master Plato, already advocated distributive justice, in order to remedy the least acceptable inequalities. Since then, many economists, including some Nobel laureates such as Simon Kuznets, Frederick von Hayeck, Amartya Sen, Joseph Stiglitz, and more recently Angus Deaton, have studied this crucial question.


 
If for years it was considered that the main objective of the economy was to fight poverty, this is no longer its essential mission today. It is true that liberal economists still consider that the market allows an optimal allocation of resources, which allows everyone to receive remuneration according to his contribution to the activity of production. In this case, inequalities are justified because they are economically efficient. Income inequality, for example, acts as a spur to improve their situation. They are incentives for individual performance, and therefore for collective efficiency.

Moreover, it is common ground that inequalities that are too great, whatever their origin, are a brake on economic and social progress. Low incomes of vulnerable groups, such as those marginalized or excluded, are holding back and reducing consumption ratios.
In the same way, failure to combat educational inequalities carries risks compromising the general level of a country's working population, and therefore its competitiveness. High wage inequalities also cause frustration, demotivation, social tensions, and are therefore counterproductive. To reduce these risks, many European countries have implemented policies to reduce social inequalities. At the same time, in recent years, a new concept, that of equity, has emerged. It promotes what might be called "just equality", which advocates that everyone should have the same opportunities, and the same opportunities, although the results may be different. Fairness is not easy to achieve: each individual must be placed on the same starting line, each with the same assets, so that the competition is not biased.


 
If one can understand and support the principle of equity, it is more difficult to conceive of so-called "just inequalities". It is easy to admit, for example, that a CEO can and should earn more than a worker. However, how many times will it be necessary to multiply the remuneration of the CEO (10,100,1000 times), so that it remains within the limits of "justice"? Let's not forget that individual effort is difficult to measure, and that most rewards reward efforts made by a community: group, work team, etc.

Equity is in fact a "necessary fiction", important because effort, merit, work are much better criteria than background, birth or caste.
That is why it is necessary, at all costs, for a fairer and more balanced global governance, to seek new avenues of analysis that can put the market economy back at the service of social development.

It is the return of political economy that will shed new light on growth analysis, enriching quantitative data with equally important qualitative elements. This new reference model is essential, and it is in this direction that President Macky Sall has embarked, with the Plan Sénégal Emergent (PSE). Indeed, from Independence to 2013, we have experienced several planning cycles in Africa, and in Senegal in particular, which have failed to reduce poverty. Few countries have come closest to the 17 Sustainable Development Goals (SDGs). When I had the privilege of being appointed Minister to the President of the Republic, in charge of monitoring the Emerging Senegal Plan, my first reflex was to measure the impact of the implementation of the PES on the populations, through field visits and a perception survey, carried out between 20 November and 06 December 2017 on a sample of 7,619 people, throughout the national territory. I was thus able to have tangible elements, to base my opinion on the remarkable mutations that we were experiencing then, and that I recall in an article, published on April 4, 2018 and that I rightly titled: "The Metamorphosis".

In my opinion, a profound transformation was taking place before our eyes, and each citizen had to accompany this exceptional process, in order to work for a prosperous Sene- gal, both for the current generations and for those of the future.

Indeed, the implementation of the First Priority Action Plan has enabled our country to make great leaps forward in all sectors. These tangible advances were widely recognized by the international community, and felt by the majority of Senegalese.


 
Thanks to the personal involvement of President Macky Sall, key battles have been won, catalysts driven, and social markers, the combination of which has made it possible to effectively fight against inequalities, sustainably implemented in our country.

Impact of the various programmes implemented under the PES
I had the opportunity to return extensively to the sectoral performance of agriculture, fisheries and livestock, in editions 2, 3 and 4 of our Magazine. And in fact, the studies carried out to measure the impact of the various programmes implemented under the PES have confirmed the improvement in the quality of life of the actors concerned. That is why, in order to reflect this dynamic of structural transformation, I shall confine myself, in this editorial, to supplementing these analyses by giving specific examples, relating to the strategic recovery of the electricity sector, and to the social markers put in place within the framework of an assumed policy of community development and horseback riding. territorial point, nodal point of this Edition of TamTam.

Strategic recovery of the electricity
sector The performance achieved in the implementation of the PES, through its programme for the strategic recovery of the electricity sector, is remarkable. It should be remembered that, until 2013, our country experienced very difficult moments of unbearable load shedding, which led to significant economic losses and serious social disruption.

From an installed capacity of 573 mega watts in 2012, Senegal has grown to 1026 mega watts, thus closing a huge gap in energy production, combined with a reduction in costs. At the same time, the share of renewable energy has been consolidated, with a target of 386 mega watts for 2023, almost achieved in 2019 with 159 mega watts of the Taïba Ndiaye solar power plant, and the Bokol solar power plants (20 MW), Malicounda (22MW), Santhiou Mékhé (30MW), Merina Dakar (30MW), Kahone (20MW), and Sakal (20MW).

In addition, with the Sambangalou hydroelectric project, sub-regional interconnection will play a very important role in the production and transmission of energy, agriculture and drinking water supply. For the rural component, the electrification rate increased from 24% in 2012 to 53% in 2019, with a universal access target of 100% in 2023. From the years of independence to 2012, only 1648 villages had been electrified. Under the first priority action plan, 4231 more villages were electrified between 2014 and 2019. For comparison, the rate of rural electrification was 27 villages per year between 1960 and 2012.


 
PES programmes have achieved a rate of 846 electrified villages each year for five years. My time in Kidira, where I received all the village chiefs of the department, remained engraved in my memory. One of them had wished to thank in particular the President of the Republic, thanks to whom they now felt Senegalese in their own right. For the first time ever, the inhabitants of the village were entitled to production tracks, they had access to water, electricity, and work relief equipment for their wives, who were forced to travel miles every day to fetch water.

Basic social programs and services
The social programmes, carried out within the framework of the PES, the result of the forward-looking vision of President Macky Sall, have made it possible to achieve considerable results. These include, in particular, the Emergency Community Development Programme (PUDC), Universal Health Coverage (UHC), Family Security Grants (BSF), the Emergency Programme for the Modernisation of Border Axes and Territories (PUMA), and the Urban Modernisation Programme (PROMOVILLES).

-The PUDC is a program composed of four essential axes, oriented towards the development of basic infrastructure, the improvement of rural productivity, agricultural production and livestock; it takes into account the environment, social engineering, communication and gender, as well as project management and coordination support. This program, launched in 2015, has enabled the construction of 626 km of track linary, the electrification of 294 villages, the construction of 229 boreholes and 163 water towers. 1480 villages and 425,500 people were able to access drinking water in rural areas. 99 horticultural perimeters and 73 cooperatives were also operationalized and supervised. Phase 2 of this program, defined in the second Priority Action Plan 2019-2022, will allow other localities such as Ziguinchor, Kolda, Sedhiou, as well as the departments of Kébemer, Mbacké, Malem Hodar and MBirkilane, among others, to benefit from important projects. It is planned to build 110 km of rural roads, build 41 boreholes, electrify 110 villages, build 30 health posts, and equip 284 multifunctional platforms to lighten the work of women.

–Universal Health Coverage (UHC). This programme has enabled the implementation of 676 mutual health insurance companies, for a total of 2,500,197 beneficiaries. 1,965,881 children under the age of 5 benefited from free health care, 18,996 women from free caesarean section, 40,584 people aged 60 benefited from the Sesame Plan, and 688 patients from free dialysis. It should be remembered that only 20% of people had access to health care in 2012, compared to 49% in 2019, with a target of 75% in 2023.

– The National Family Security Scholarship Program (PNBSF) registered 550,045 households in the Single National Register (RNU) in May 2020, compared to 442,053 in 2018. The initial target of 300,000 households, which had been set, is now largely exceeded, and 92% of households received at least 3 transfers in the calendar year. World Bank analyses, carried out in several African countries, show that social safety nets can stimulate consumption and reduce poverty. Household consumption increases by an average of $0.74 for every dollar transferred, and if social safety nets were scaled up, simulations show that cash transfers of $50 per month could reduce poverty by 40%. In Senegal, impact studies have shown that poverty has decreased in the beneficiary areas of this programme, particularly in Kolda, which has the highest percentage of beneficiary households, with 37% of households, compared to 6% in Dakar, 7% in Louga, and 10% in Matam.

– The Emergency Program for the Modernization of Border Axes and Territories (PUMA). The main aim is to correct inequalities between the inhabitants of cities and the populations of border areas by setting up programmes to de-proclaim and combat the high level of poverty and limited access to basic social services. Over the period 2017-2019, PUMA carried out 15 health posts, 33 accommodations for midwives, and contributed to the reduction of the morbidity rate with 13992 people consulted, including 5364 women, 1241 pregnant women followed, and 399 live births registered.

It should also be noted the medical evacuations of more than 5,000 people, between 2018 and 2019, thanks to the 43 medical ambulances made available to localities. In the field of hydraulics, 6 boreholes have been repaired, 5 water towers are under construction, and the extension of 5.4 km of water addiction networks has been carried out, for 529 beneficiary households. The construction of 55 km of tracks has opened up 35 villages, 3,687 households and 43,444 people with access to basic social services.

The economic promotion component has enabled the provision of 132 post-harvest equipment and 39 motor pumps for 3182 affected households, 9.5% of whom are women in border areas. 181 hectares have also been developed, with 25km of fence. 357 young people and women have been trained in the fields of fish farming, milk processing techniques, fruit, construction trades, dyeing, microenterprise management, catering, and renewable energies. The construction and equipping of two youth hostels were carried out, the active and community resilience projects of 17 GPF and GIE supported, and 48 floating cages for fish farming installed and supplied.

Finally, for border security, 52 security services and decentralized services have been reinforced in equipment; two sub-prefecture housing units have been rehabilitated, three mixed security posts are under construction, and 30,000 people were supported by the programme to obtain the civil status document as part of the fight against statelessness.

-The City Modernization Program (PROM0VILLES). Taking into account the strong population growth coupled with the exodus, the pace of urbanization of our cities is evolving at an alarming rate, without any planning, leaving the majority of the population without the essential basic services of roads, lighting, drainage, sanitation, green spaces, etc. The estimated cost of this program is estimated at 280 billion CFA francs, over the period 2015-2025. The Government of Senegal has started the implementation of the program with a pilot phase, to the tune of 74 billion FCFA from own funds, and which is being implemented for a linear of 103 km of roads, rainwater drainage, public lighting, and landscaping. A first phase of 89 billion, including 75 billion provided by the African Development Bank (AfDB), is also underway in the Dakar region, and in 10 municipalities of the country that are mainly regional capitals (Saint-Louis, Zi-guinchor, Matam, Louga, Kolda, Tambacounda, Kaolack, Diourbel, Thiès, Mbour).

Phase 2, worth 84 billion FCFA, financed by the Islamic Bank, will concern the cities of Dakar, Guédiawaye, Pikine, Rufisque, Mbour, Touba and Tambacounda. From the outset, PROMOVILLE is available in 4 components:

-The development of road infrastructure and their dependencies, with the objective of achieving more than 700 km of road lines, drainage works, sanitation, and landscaping;

-The construction of basic socio-economic facilities (schools, health posts, jumbo jet stations, multifunctional platforms);

– Institutional support to local authorities, in particular with the establishment of a geographic information system, to serve as an instrument enabling local authorities to plan, implement and monitor development projects and programmes;

-And finally the management of the various projects of the program.

After five years of implementation, the achievements are notable:

– 86 Km of roads have been received, 42 Km of power lines including 1400 street lights installed, 121.6 km of rainwater drainage networks around the roadways and 3 pumping stations are built in the intervention areas of the program; 72 Km of roads are under construction;

-In Matam, 3.5 km of dike have been built, and in NGuet NDar, parking areas for refrigerated trucks, with a total area of 13,260 M2 have been erected;

-On the social level, 1487 young people have been trained, as well as 336 local authority agents. This program has generated approximately 2568 direct jobs.

With regard to support for local authorities, the programme has made available, at the level of 7 municipalities, urban databases to support the establishment of a geographical information system, and 13 batches of equipment for their technical services.

These social markers, combined with the quantitative growth born of the implementation of the first PAP, have, without a doubt, given a new social face to Senegal and, beyond that, the new clothes of an African neo-libertarianism, based on the Senegalese model, where several political parties of different doctrinal formations unite around the same program of economic and social development, in the name of the best interest of the Nation.

A new representation of citizenship was born with the PES and, for its completion, it is absolutely necessary to associate the thought of those without whom Senegal would not be what it was and what it is today. These are indeed the cultural values of our ancestors, the nourishing saps of all fruitful actions based on work, knowledge and faith in God, which enable us to fight, through action, the dependence and poverty of our country. Equality is a fundamental issue in any economic policy agenda. It must be recognized that quantitative performance has not automatically translated into a reduction in income gaps in Africa and a narrowing of the gaps in well-being between the rich minority and the vast majority of the poor.

In addition, it is essential that the generation, which is building tomorrow's growth today, constantly has sustainability and solidarity in mind. Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics, was one of the first experts to insist on the role of inequality as a cause of economic downturn. He is, today, joined by several other authors. For the famous economist, the health and education situation, social ties, work-life balance, personal safety, and the environment are all important non-monetary aspects of well-being.

In our talks with Jean Hervé Lorenzi, former IMF Director Christine Lagarde stressed the dangers of growing inequality, a theme that is now at the forefront of the global policy agenda. We need, she stressed, a financial system that is more ethical and more focused on the needs of the real economy, a financial system that serves society, not the other way around.

The evolution of the world economy in general, and that of Africa in particular, proves him right. Of course, we want growth, but we also want to make sure:

– That people have jobs, which is the basis for feeling integrated into society and for accessing a sense of dignity;

– That the most vulnerable populations and the middle class receive their share in the prosperity of a country;

– That women and men be given equal opportunities to participate in economic activity;

– That wealth is not monopolized by a privileged few, which implies vigilance in terms of governance;

– That growth be shared within a generation but also with future generations.

These paradigms in terms of inclusive governance allow me to open a parenthesis, to tell the story of this king, always at the service of his people, who spent his day meditating on three fundamental questions: who is the most important person in the world? What is the most important thing in the world? When is the most important time to act? He had asked these questions to his ministers and courtiers, and no one had been able to give him the right answers; he felt helpless. He decided one day to leave his palace, dressed like an ordinary person, and after walking for a long time, he arrived in a neighborhood where an old man offered him hospitality.

In the middle of the night, a loud noise woke him up, and a person, clothes covered in blood, suddenly appeared in the house. The stranger explained that he was being chased by men who wanted to arrest him. "Well, take shelter in my house," the old man proposed to him," who hid him in a room. The king, terrified, could not go back to sleep, and soon after soldiers came running. They asked the old man if he had seen a fugitive pass by. "No," he replied. There is no one here." The soldiers left in haste, and the man they were looking for thanked the old man, and left in his turn. The old man closed the door and went back to bed. The next day, the king asked him, "Why weren't you afraid to welcome this person? He could have killed us! besides, you let him go without even asking him who he was? In this world, the old man replied quietly, the most important person is the one who is in front of you and needs your help; the most important thing is to help him; and the most important moment to do so is the present moment, and there is no question of hesitating for a second."

The three philosophical questions that tormented the king had just been answered. This king, and all the leaders of the modern world, must understand that in reality, man is at the beginning and at the end of all development processes, and a non-inclusive growth, which does not take into account the multidimensionality of the needs of the populations, is aimless opulence, doomed to failure.

If Africa is to realize its full development potential, and become a global growth pole in the post-Covid decades, it must more than ever implement proactive policies, to reduce inequalities and promote inclusion. With inclusive growth, the cornerstone of development stability and sustainability, all segments of society are concerned and involved. This is the objective for which Senegal has committed itself in recent years, and this policy is beginning to bear fruit. Despite the Covid-19 crisis, it will be continued and amplified, through the PAP2 A A.

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