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Tales from the Development Frontier
nearby villages for its fields and its processing centers. About 80 percent are temporary seasonal workers or day laborers. This step boosted employment in the adjacent rural areas in jobs paying more than the national average. Thus, despite the vertical integration of the supply chain and the exclusion of smallholder farms from tomato production for export, tomato exports have had positive employment effects. Wages stagnated among workers who did not join the agroprocessing effort. Producers who exported their output could sometimes earn twice what they would receive in local markets. Given the intensity of land use and the semiskilled labor in this sector, coupled with the longer growing season, Senegal used this production structure to capture a larger share of world trade. Access to finance has been another benefit of foreign investment. Physical capital was made available through GDS stock because small domestic tomato producers had rarely been able to obtain bank loans. The spread of agroindustrial farming was also facilitated by the government’s allocation of previously uncultivated land to small farms. The government assigned GDS an additional 400 hectares of land in the Senegal River Delta region to expand production and exports. The Role of Government Macroeconomic reforms over the last two decades have provided a boost to the horticulture industry. After years of GDP contraction in the late 1980s and early 1990s, the large devaluation of the CFA franc in 1994 stimulated real GDP growth, which averaged 5 percent a year over 1995–2010; inflation dropped to single digits. Reforms were introduced to liberalize the economy, remove trade and investment barriers, attract FDI, and promote regional integration. These all created a more open policy regime for the horticulture industry. Senegal’s macroeconomic stability supported export competitiveness and reduced the costs of trade logistics. The country’s political, macroeconomic, and fiscal stability; reasonably good infrastructure; and well-educated elite have created a favorable climate for FDI. The Investment Promotion and Major Projects Agency of Senegal helped address issues ranging from gaining access to more land to reducing red tape. The government established an investment code that guarantees approval of any project, regardless of size, that meets established