Battle of the baguette in Senegal: Competition erodes traditional ties. Africa's former colonial rulers face a dilemma. They favor trade liberalization in Africa, but such reforms make it harder for them to sell their goods.

``The Senegalese have definitely been willing to diversify their sources of supply,'' said a US banker. ``They do feel they have been too dependent on the French.''

Senegal's mostly rural population of 6.7 million is a small market by US standards, but the country is pushing for foreign investors. The government recently sent delegations to New York and Ohio as well as to Brussels.

Former Ambassador to the US Abdourahmane Dia, the director of Dakar's industrial zone, says progress in attracting US investment has been slow, but argues that the potential is great.

``The best way now [for Americans] to penetrate the EC is to transfer technology and capital to Senegal,'' said Mr. Dia, noting that US products made in Senegal can be sold duty-free on the common market.

Mr. Dia said the Belgians and Dutch have shown some interest in Senegal, and officials say Asian companies are selling wire products and cookware here.

The trade liberalization puts the French government in a particular bind. France hopes for economic growth to make Senegal less dependent on its aid, but it must also protect French businesses that could be hurt by the new free-market policies.

The French are torn over the question of reducing Senegalese subsidies for the French-owned sugar monopoly, which sells sugar here at three times the world price.

``If the government of Senegal is subsidizing a business here, and the government of Senegal doesn't have sufficient resources, then that has to come from the donors,'' said a US diplomat. ``And the French are the largest donors and the donors of last resort.''

According to an aid official: ``The French are not speaking with the same tongue. ... There are individual interests that color the French position.''

So, while US and World Bank officials push for further reforms, the French preach caution, apparently out of a concern that rapid liberalization will cause unemployment as well as damage French commercial interests.

Many officials, however, view the French dilemma with sympathy. France, after all, gives Senegal many times more aid than the US does.

``Trade accompanies aid,'' said the aid official. ``If the US wants more investment, they should give more aid.''

Thus, despite challenges like the US baguette invasion, France will likely remain the dominant foreign economic power in Senegal for many years.

The next step, however, in weakening the ties between France and its former colony could come in 1992.

In that year, the EC hopes to expand the use of the European currency unit. If West Germany or some other EC member objects to supporting Francophone West Africa's trade deficits, then Senegal and its neighbors may have to issue independent currencies.

That would take away one key advantage French businesses now enjoy in Senegal and, the aid official said, could signal the start of ``a whole new ball game.''

Page: 1 | 2