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economic freedom
October 2008 
Entrepreneurship, Education, and Senegal: FLOW Vision News
Posted on Sep 30th, 2008
by 
FLOW
FLOW
Dear FLOW,
I’ve just returned from two weeks in Senegal, a beautiful land with a tolerant Islamic culture, mostly Sufi, a very strong work ethic, an indigenous entrepreneurial tradition, and an HIV/AIDS rate that is among the lowest in Africa, nearly as low as the current U.S. rate.
Senegal’s political history is also unusually positive: The first president of Senegal, Leopold Senghor, was a star student throughout his academic career in France, becoming a renowned teacher and then an illustrious poet. His poems have permanently entered the French language canon of great poetry. In the 1960s and 70s, as it became apparent that many African leaders were vicious thugs, Senghor was at times the only African leader to speak out against the atrocities being committed by his fellow African heads of state. Though a socialist, he thoroughly repudiated the communist party, and consistently worked throughout his life for a democratic socialism in Senegal.
Yet Senegal today, despite being one of the only African nations to have experienced neither coup nor war since independence, has a U.N. Human Development Index rating lower than Haiti, the lowest ranked nation in the western hemisphere. Senegal’s GDP per capita has been stagnant since independence in 1960, despite billions in aid (Senegal has been one of the top recipients of foreign aid in Africa for decades) and the ongoing presence of countless NGOs. Despite the natural beauty of Senegal, Dakar itself consists largely of miles and miles of poor, filthy neighborhoods in which malnourished children catch malaria, dysentery, and other diseases. How can a nation so favored remain so poor?
Magatte Wade-Marchand is a Senegalese entrepreneur who founded Adina for Life, a beverage company based in San Francisco. She found that when she had returned to Senegal after living in the U.S., people were increasingly drinking Coke rather than the traditional hibiscus beverage of her childhood. She knew that the Senegalese would never return to their traditional beverage unless it became respected in the developed world, so she created Adina (which means “Life” in Wolof, the dominant indigenous language of Senegal) to market the traditional hibiscus drink in the U.S. Adina today is a multi-million company that just received its third round of investment capital; it is carried by Whole Foods Market, Wegmans, and other upscale and natural foods grocery chains.
Magatte has turned most of over her day-to-day management tasks of Adina to professional managers and is now transitioning to work primarily on the Diama Foundation (Diama means peace in Wolof), dedicated to helping women entrepreneurs in Senegal. But Magatte’s aspirations go way beyond microfinance; she aspires to help other women entrepreneurs in Senegal develop the expertise and professionalism to bring their products to markets in the U.S. and Europe. As someone who has herself gone through the work of creating a supply chain in Senegal that meets not only U.S. quality health standards, but also global organic and Fair Trade certification standards, she knows exactly what it takes to train indigenous Sengalese to meet global standards. Moreover, on the branding and marketing side she is acutely aware that in order to obtain the high value added prices that are associated with organic and Fair Trade products, it is critical to develop a compelling and sophisticated brand identity. She cringes when she observes the current lack of brand sophistication prevalent in Senegal.
One of the things that fascinates me about entrepreneurs is the way that they are capable of seeing opportunities that are invisible to most people. Magatte is a brilliant visionary entrepreneur in this sense: as she travels through Senegal she sees countless entrepreneurial opportunities waiting to be developed. In each case, she is brutally critical of existing Senegalese standards of customer service, professionalism, cleanliness, consistency, etc. But she also knows, as an entrepreneur, that it is possible to identify good employees, train them, and reward those who perform good work. And thus she sees each entrepreneurial opportunity as simply a matter of work: On the Senegalese side, create the production system and train the employees to perform at world-class standards while simultaneously developing branding, marketing, and distributional channels in the U.S. through which the new products may be sold. In addition to Adina, she has already developed a few additional small product lines based on these principles, and as far as I can tell she is likely to be able to create, and help others to create, any number of successful Senegalese businesses that will be able to sell products in the U.S. and Europe, ultimately creating tens of thousands of good jobs that cumulatively will alleviate the grinding poverty in which so many Senegalese live.
But if it is so easy for Magatte to do this, why haven’t others done it? First, I should be clear, the fact that she has done it doesn’t mean that it is easy. Her criticisms of existing Senegalese standards are apt, and the identification and training of good employees is a non-trivial task. Magatte has a great eye for talent, an iron will, is uncompromising in her demand for excellence, and is willing to do whatever it takes to get people to perform at their best. Not everyone has these characteristics; not everyone can succeed at training local people to produce to world-class standards.
In addition, Magatte has been blessed with an unusual entrepreneurial education. When I first met her, I thought that thinking like an entrepreneur simply came naturally to her. But upon questioning, she acknowledged that she had not thought like that at the age of 16, nor had she thought like that upon taking her first corporate job at the age of 22. Clearly she had learned something in the world since graduation.
It turns out that her husband had been an entrepreneur whom she watched create his company from scratch. She then worked in Silicon Valley for a headhunter during the late 1990s Silicon Valley boom, putting her in close contact with many dozens of dynamic entrepreneurs in the middle of starting up companies for several years. She then worked as Sponsorship Chair for the MIT/Stanford Venture Lab, where she was responsible for helping leading tech corporations, venture capitalists, and high net worth individuals searching for outstanding startup opportunities to support. She learned entrepreneurship by working smack dab in the middle of the world’s greatest entrepreneurial region, responsible for looking closely at the guts of entrepreneurial start-ups.
One of my enduring themes is that conventional education is 12 years of training in passivity and dependence. In most schools, all day, every day, a teacher tells you what to do, when you can do it, and whether or not you have done it well. There are, it is true, some individuals who maintain a sense of initiative and independent thought despite this process; but as someone who has spent much of my adult life training secondary students to think for themselves rather than parroting the teacher, it is my sense that the deadening effect of schooling is difficult to overestimate. Insofar as one values entrepreneurial initiative, it is not at all clear to me that conventional mass education (beyond basic literacy and numeracy) necessarily adds value. Insofar as it deadens initiative and deepens passivity, it may be a net harm.
The way in which education in Senegal has become an extended version of French colonial education is even more deadening. There is a sense that some foreign curriculum which one is supposed to master will provide this mysterious “education” that is supposed to be valuable. The Senegalese government is so committed to education that it spends 30-40% of the budget on education, and yet there is almost no private sector at all in Senegal. Almost all jobs in Senegal are either government jobs or “informal sector” jobs, which in Senegal typically means very poor people struggling to make ends meet. There are a few multinational corporations in Senegal, which hire a relatively small percentage of Senegalese, and then there is a very small indigenous Senegalese private sector.
How can a country of 12 million have so little real business?
To an entrepreneur, one of the most obvious of truths is that entrepreneurs create value. Entrepreneurs like Magatte see flowers growing wild (Hibiscus) that Senegalese take for granted and launches a multi-million dollar business (when I told some Senegalese students that Magatte had created a successful company that began by selling hibiscus drink, their jaws dropped with wonder – it was simply unimaginable to them). With secure property rights (including secure intellectual property – Magatte is acutely aware that brands are valuable if and only if you can defend their IP) and fair contract enforcement, entrepreneurs create value where none existed before. This is one of the most fundamental and obvious truths of the economics of wealth creation, and was widely recognized in Britain and the U.S. throughout the 19th century.
And yet Senghor, who was a good humanitarian, had the misfortune to be educated in a French humanistic tradition that produced great poets but poor economists. He launched an independent Senegal with a socialistic vision in which government had responsibilities to the poor and in which the private sector was a suspect force at best. By the time Senghor left power in 1980, Senegal had less economic freedom than does Venezuela under Chavez today. Senghor’s “democratic socialism” resulted in a Senegal that would have ranked 135th (out of 141 nations ranked today) on the Fraser Economic Freedom Index. Socialists ruled Senegal from 1960 to 2000, when for the first time since independence Senegal elected a market-oriented leader, Abdoulaye Wade.
Wade is a courageous classical liberal lawyer and economist who had spent twenty-six years in political opposition to the socialists, including being repeatedly thrown into prison. He was the only African leader to criticize Mugabe’s theft of the 2002 Zimbabwe election. As a Muslim leader of a Muslim country, he has been a tireless international campaigner against violent Jihad, against Islamic fundamentalism, and for a tolerant, forward-looking Islam that supports modernity. He has criticized the U.N. Food and Agriculture organization as “a bottomless pit of money largely spent on its own functioning with very little effective operations on the ground.” He is a bold, outspoken, and independently-minded political leader.
And yet Wade has not been able to create a prosperous Senegal in the eight years since he came to power. It will take time to recover from forty years of socialism. Only since Wade has come to power has Senegal’s economic freedom ranking exceeded that of Sweden’s in the 1970s, when government control of the economy peaked in Sweden. And, of course, Sweden today is more free market than any nation in Africa, including Wade’s Senegal. From 1900 to 1950, the period in which Sweden became wealthy, the Swedish government was smaller than the U.S. government at the time, which of course was much smaller than the U.S. government today. What fans of Swedish democratic socialism don’t realize is that the Sweden that moved rapidly from poverty to wealth in the first half of the 20th century was more free market than is Hong Kong today, the nation at the top of the economic freedom rankings.
In 1960, Africa had a higher GDP per capita than did Asia. But then General MacArthur’s market-based Japan took off, Hong Kong and Singapore became the most free market regimes in the world, South Korea and Taiwan opened up free zones. In the 1980s China began creating free zones modeled on Hong Kong along its eastern coast. And finally India switched from socialism to capitalism in the 1980s and 90s. Now Japan and the four Asian Tigers are part of the developed world, China will reach a U.S. standard of living around 2030 and India will do the same around 2050.
Given economic freedom, entrepreneurs create value, and the resulting wealth benefits all. Millions of Senegalese children are living in sewage and squalor today because Senghor, a caring intellectual with great integrity, did not understand this.
The Senegalese people are tolerant, kind, hard-working, and caring. It is sad to see so many children suffering in the streets. May the next generation of intellectuals, poets and all, understand the elementary principles of entrepreneurial value creation.
Peace,
Michael
I’ve just returned from two weeks in Senegal, a beautiful land with a tolerant Islamic culture, mostly Sufi, a very strong work ethic, an indigenous entrepreneurial tradition, and an HIV/AIDS rate that is among the lowest in Africa, nearly as low as the current U.S. rate.
Senegal’s political history is also unusually positive: The first president of Senegal, Leopold Senghor, was a star student throughout his academic career in France, becoming a renowned teacher and then an illustrious poet. His poems have permanently entered the French language canon of great poetry. In the 1960s and 70s, as it became apparent that many African leaders were vicious thugs, Senghor was at times the only African leader to speak out against the atrocities being committed by his fellow African heads of state. Though a socialist, he thoroughly repudiated the communist party, and consistently worked throughout his life for a democratic socialism in Senegal.
Yet Senegal today, despite being one of the only African nations to have experienced neither coup nor war since independence, has a U.N. Human Development Index rating lower than Haiti, the lowest ranked nation in the western hemisphere. Senegal’s GDP per capita has been stagnant since independence in 1960, despite billions in aid (Senegal has been one of the top recipients of foreign aid in Africa for decades) and the ongoing presence of countless NGOs. Despite the natural beauty of Senegal, Dakar itself consists largely of miles and miles of poor, filthy neighborhoods in which malnourished children catch malaria, dysentery, and other diseases. How can a nation so favored remain so poor?
Magatte Wade-Marchand is a Senegalese entrepreneur who founded Adina for Life, a beverage company based in San Francisco. She found that when she had returned to Senegal after living in the U.S., people were increasingly drinking Coke rather than the traditional hibiscus beverage of her childhood. She knew that the Senegalese would never return to their traditional beverage unless it became respected in the developed world, so she created Adina (which means “Life” in Wolof, the dominant indigenous language of Senegal) to market the traditional hibiscus drink in the U.S. Adina today is a multi-million company that just received its third round of investment capital; it is carried by Whole Foods Market, Wegmans, and other upscale and natural foods grocery chains.
Magatte has turned most of over her day-to-day management tasks of Adina to professional managers and is now transitioning to work primarily on the Diama Foundation (Diama means peace in Wolof), dedicated to helping women entrepreneurs in Senegal. But Magatte’s aspirations go way beyond microfinance; she aspires to help other women entrepreneurs in Senegal develop the expertise and professionalism to bring their products to markets in the U.S. and Europe. As someone who has herself gone through the work of creating a supply chain in Senegal that meets not only U.S. quality health standards, but also global organic and Fair Trade certification standards, she knows exactly what it takes to train indigenous Sengalese to meet global standards. Moreover, on the branding and marketing side she is acutely aware that in order to obtain the high value added prices that are associated with organic and Fair Trade products, it is critical to develop a compelling and sophisticated brand identity. She cringes when she observes the current lack of brand sophistication prevalent in Senegal.
One of the things that fascinates me about entrepreneurs is the way that they are capable of seeing opportunities that are invisible to most people. Magatte is a brilliant visionary entrepreneur in this sense: as she travels through Senegal she sees countless entrepreneurial opportunities waiting to be developed. In each case, she is brutally critical of existing Senegalese standards of customer service, professionalism, cleanliness, consistency, etc. But she also knows, as an entrepreneur, that it is possible to identify good employees, train them, and reward those who perform good work. And thus she sees each entrepreneurial opportunity as simply a matter of work: On the Senegalese side, create the production system and train the employees to perform at world-class standards while simultaneously developing branding, marketing, and distributional channels in the U.S. through which the new products may be sold. In addition to Adina, she has already developed a few additional small product lines based on these principles, and as far as I can tell she is likely to be able to create, and help others to create, any number of successful Senegalese businesses that will be able to sell products in the U.S. and Europe, ultimately creating tens of thousands of good jobs that cumulatively will alleviate the grinding poverty in which so many Senegalese live.
But if it is so easy for Magatte to do this, why haven’t others done it? First, I should be clear, the fact that she has done it doesn’t mean that it is easy. Her criticisms of existing Senegalese standards are apt, and the identification and training of good employees is a non-trivial task. Magatte has a great eye for talent, an iron will, is uncompromising in her demand for excellence, and is willing to do whatever it takes to get people to perform at their best. Not everyone has these characteristics; not everyone can succeed at training local people to produce to world-class standards.
In addition, Magatte has been blessed with an unusual entrepreneurial education. When I first met her, I thought that thinking like an entrepreneur simply came naturally to her. But upon questioning, she acknowledged that she had not thought like that at the age of 16, nor had she thought like that upon taking her first corporate job at the age of 22. Clearly she had learned something in the world since graduation.
It turns out that her husband had been an entrepreneur whom she watched create his company from scratch. She then worked in Silicon Valley for a headhunter during the late 1990s Silicon Valley boom, putting her in close contact with many dozens of dynamic entrepreneurs in the middle of starting up companies for several years. She then worked as Sponsorship Chair for the MIT/Stanford Venture Lab, where she was responsible for helping leading tech corporations, venture capitalists, and high net worth individuals searching for outstanding startup opportunities to support. She learned entrepreneurship by working smack dab in the middle of the world’s greatest entrepreneurial region, responsible for looking closely at the guts of entrepreneurial start-ups.
One of my enduring themes is that conventional education is 12 years of training in passivity and dependence. In most schools, all day, every day, a teacher tells you what to do, when you can do it, and whether or not you have done it well. There are, it is true, some individuals who maintain a sense of initiative and independent thought despite this process; but as someone who has spent much of my adult life training secondary students to think for themselves rather than parroting the teacher, it is my sense that the deadening effect of schooling is difficult to overestimate. Insofar as one values entrepreneurial initiative, it is not at all clear to me that conventional mass education (beyond basic literacy and numeracy) necessarily adds value. Insofar as it deadens initiative and deepens passivity, it may be a net harm.
The way in which education in Senegal has become an extended version of French colonial education is even more deadening. There is a sense that some foreign curriculum which one is supposed to master will provide this mysterious “education” that is supposed to be valuable. The Senegalese government is so committed to education that it spends 30-40% of the budget on education, and yet there is almost no private sector at all in Senegal. Almost all jobs in Senegal are either government jobs or “informal sector” jobs, which in Senegal typically means very poor people struggling to make ends meet. There are a few multinational corporations in Senegal, which hire a relatively small percentage of Senegalese, and then there is a very small indigenous Senegalese private sector.
How can a country of 12 million have so little real business?
To an entrepreneur, one of the most obvious of truths is that entrepreneurs create value. Entrepreneurs like Magatte see flowers growing wild (Hibiscus) that Senegalese take for granted and launches a multi-million dollar business (when I told some Senegalese students that Magatte had created a successful company that began by selling hibiscus drink, their jaws dropped with wonder – it was simply unimaginable to them). With secure property rights (including secure intellectual property – Magatte is acutely aware that brands are valuable if and only if you can defend their IP) and fair contract enforcement, entrepreneurs create value where none existed before. This is one of the most fundamental and obvious truths of the economics of wealth creation, and was widely recognized in Britain and the U.S. throughout the 19th century.
And yet Senghor, who was a good humanitarian, had the misfortune to be educated in a French humanistic tradition that produced great poets but poor economists. He launched an independent Senegal with a socialistic vision in which government had responsibilities to the poor and in which the private sector was a suspect force at best. By the time Senghor left power in 1980, Senegal had less economic freedom than does Venezuela under Chavez today. Senghor’s “democratic socialism” resulted in a Senegal that would have ranked 135th (out of 141 nations ranked today) on the Fraser Economic Freedom Index. Socialists ruled Senegal from 1960 to 2000, when for the first time since independence Senegal elected a market-oriented leader, Abdoulaye Wade.
Wade is a courageous classical liberal lawyer and economist who had spent twenty-six years in political opposition to the socialists, including being repeatedly thrown into prison. He was the only African leader to criticize Mugabe’s theft of the 2002 Zimbabwe election. As a Muslim leader of a Muslim country, he has been a tireless international campaigner against violent Jihad, against Islamic fundamentalism, and for a tolerant, forward-looking Islam that supports modernity. He has criticized the U.N. Food and Agriculture organization as “a bottomless pit of money largely spent on its own functioning with very little effective operations on the ground.” He is a bold, outspoken, and independently-minded political leader.
And yet Wade has not been able to create a prosperous Senegal in the eight years since he came to power. It will take time to recover from forty years of socialism. Only since Wade has come to power has Senegal’s economic freedom ranking exceeded that of Sweden’s in the 1970s, when government control of the economy peaked in Sweden. And, of course, Sweden today is more free market than any nation in Africa, including Wade’s Senegal. From 1900 to 1950, the period in which Sweden became wealthy, the Swedish government was smaller than the U.S. government at the time, which of course was much smaller than the U.S. government today. What fans of Swedish democratic socialism don’t realize is that the Sweden that moved rapidly from poverty to wealth in the first half of the 20th century was more free market than is Hong Kong today, the nation at the top of the economic freedom rankings.
In 1960, Africa had a higher GDP per capita than did Asia. But then General MacArthur’s market-based Japan took off, Hong Kong and Singapore became the most free market regimes in the world, South Korea and Taiwan opened up free zones. In the 1980s China began creating free zones modeled on Hong Kong along its eastern coast. And finally India switched from socialism to capitalism in the 1980s and 90s. Now Japan and the four Asian Tigers are part of the developed world, China will reach a U.S. standard of living around 2030 and India will do the same around 2050.
Given economic freedom, entrepreneurs create value, and the resulting wealth benefits all. Millions of Senegalese children are living in sewage and squalor today because Senghor, a caring intellectual with great integrity, did not understand this.
The Senegalese people are tolerant, kind, hard-working, and caring. It is sad to see so many children suffering in the streets. May the next generation of intellectuals, poets and all, understand the elementary principles of entrepreneurial value creation.
Peace,
Michael
Access: Public
Very interesting.
Thanks for sharing this