CHAPTER FOUR: ECONOMIC GOVERNANCE AND MANAGEMENT __________________________________________________________________________ launching initiatives to create public enterprises, promote industrial development and support agricultural development during this period. However, sound management became difficult because of the political instability caused by 12 years of crisis in managing national independence. 340. As a result of the importance of French capital in the economy and of limited state resources, economic governance during this period was never closed to private investment. Rather, the new state’s economy – without being effectively transformed – was made to function alongside private initiatives, such as industries and businesses, to promote Benin’s economy and the economies of landlocked neighbouring countries. 341. This means that the challenge of transforming an economic structure modelled along colonial lines into an integrated economic structure striving for national development, though possible, continued to pose problems. The postcolonial economic governance and management structures could not define, much less implement, an economic policy aimed at structural transformation. Benin’s position in the empire continued to be crucial in the economic governance of this period. This was understandable as the country, which was handling its political instability with difficulty, did not have the time to define a vision for the Benin (Dahomey at that time) that it wanted to construct for the future or to mobilise the human, material and financial resources required for that purpose. 342. The second period, during which socialism was adopted, was marked, as expected, by nationalising some private enterprises, by creating new state enterprises and by creating some semipublic companies. Since socialist systems advocate industrialisation, massive state industrial investments were encouraged. However, the country lacked the capacity to manage them. 343. Furthermore, it was difficult for a state, without any real economic weight and with a neocolonial economy managed from the outside, to develop a socialist developmental policy. It had neither the resources nor the capacities. Its new policies were attacked both from within and outside of the country. Consequently, the economic governance of the country continued, even during this second period, to manage, or rather mismanage, its colonial heritage. The economic and social consequences were soon felt. The half measures of socialist governance and poor economic and financial management in a context of economic crisis led to social and political unrest. This ultimately destroyed the option of a socialist developmental system towards the end of the 1980s. 344. In fact, in the first half of the 1980s, a failed economic governance system had already affected the country. Aware of the fact that Benin had been hard hit by an economic crisis and drought, its leaders finally declared Benin a ‘disaster country’ at the beginning of 1984 and sought international aid. The macroeconomic situation, the state of affairs in the core sectors of the economy, and the economic and social conditions of the population caused things to worsen drastically. The state was unable to pay the meagre salaries of its civil servants and poverty increased. 130