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WEEKLY NEWSLETTER
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Ivory Coast
Index
Brass weights, container, and spoon for carrying and
measuring gold dust
SINCE ACHIEVING INDEPENDENCE from France in 1960, Côte
d'Ivoire's
primary economic objective has been growth. During the
1960s,
growth was accomplished by expanding and diversifying
agricultural
production, improving infrastructure, and developing
import
substitution industries. Implicit in this strategy was the
emergence of an expanding domestic market to support
budding
consumer goods industries. Income redistribution and
Ivoirianization (replacement of expatriates with Ivoirian
workers)
were made subordinate to growth. Although these goals were
politically desirable, redistribution and Ivoirianization
would be
impossible without growth, according to policymakers.
Using
revenues generated from agricultural exports, the
government
financed improvements to infrastructure--roads, ports,
railroads,
power generation, and schools. To finance increased
agricultural
production and industrial development, the government
turned to
foreign investment and imported technology. Much of the
manual
labor was supplied by non-Ivoirian Africans.
Paramount in this planning was the maintenance of
economic
links to France that were almost as extensive as the
preindependence ties. Before independence, French public
and
private capital helped to support the government, ensured
the
internal and external convertibility of the currency,
financed most
major commercial enterprises, and supported the country's
banking
and credit structure. French enterprises in Côte d'Ivoire
were a
major employer of Ivoirian labor, and France
purchased--often at
rates higher than market value--most of the country's
exports. In
addition, French managers held most of the key positions
in
business, and French advisers occupied important posts in
many
government ministries.
Côte d'Ivoire's ties to France grew even stronger after
independence. Between 1960 and 1980, the total French
population in
Côte d'Ivoire nearly doubled, from about 30,000 to close
to 60,000,
forming the largest French expatriate community. In the
mid-1980s,
four out of five resident French had lived in Côte
d'Ivoire for
more than five years. French citizens filled technical and
advisory
positions in the government (albeit in diminishing
numbers) and
were also evident throughout the private sector. Until
1985 Côte
d'Ivoire also had the highest number of French-controlled
multinational businesses in all of Africa, had the largest
percentage of French imports to and exports from Africa,
and, along
with Senegal, received the largest French aid package in
Africa.
Economic development in Côte d'Ivoire has passed
through three
phases. During the first phase, from 1965 to 1975, the
economy grew
at a remarkable pace as coffee, cocoa, and timber exports
increased. Surpluses from exports speeded growth in the
secondary
(industrial) and tertiary (services, administration, and
defense)
sectors. Gross domestic product
(GDP--see Glossary) grew
at an
average annual rate of 7.9 percent in real terms, well
ahead of the
average annual population growth rate of approximately 4
percent.
During the second phase, from 1976 to 1980, external
changes in
the world economic system reverberated within Côte
d'Ivoire. Coffee
and cocoa prices peaked in the 1976-77 period as a result
of poor
harvests in Latin America, but two years later prices
declined
rapidly. GDP continued to grow at an average rate of 7.6
percent
per year; within the period, however, the growth rate
varied from
2 percent in 1979 to 11.5 percent one year later. The
government,
which had responded to the boom phase by vigorously
expanding
public investment, was by 1979 forced to rely on foreign
borrowing
to sustain growth. At the same time, the declining value
of the
United States dollar, the currency in which Côte
d'Ivoire's loans
were denominated, and rising prices for imported oil
adversely
affected the country's current accounts balance. By the
end of the
second phase, Côte d'Ivoire was at the brink of a
financial crisis.
During the third phase, from 1981 to 1987, the economy
deteriorated as terms of trade declined, interest rates
increased,
the prospects of new offshore oil development evaporated,
and
agricultural earnings dropped. Following a record 1985-86
cocoa
harvest, the economy rebounded briefly; however, falling
cocoa
prices quickly eroded any gains the country had hoped to
achieve,
and by 1987 President Félix Houphouët-Boigny had halted
further
payments on foreign debt. Subsequently, Côte d'Ivoire was
forced to
adopt a structural adjustment program mandated by the
International
Monetary Fund
(IMF--see Glossary) that limited imports,
subsidized
exports, and reduced government spending.
Data as of November 1988
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