EXECUTIVE SUMMARY __________________________________________________________________________ 3.90 People’s access to resources plays an important role in peace and political stability, and therefore in building and consolidating democracy. It promotes social cohesion and facilitates the building of consensus and the mobilisation of the bone and sinew of the nation around the development model chosen under the guidance of the authorities. It is acknowledged that the state cannot be the sole provider of development resources and services, even though they are called social resources and services. Private sector and civil society are important partners in this process and in the process of improving citizens’ access to resources. 3.5.6 The informal sector 3.91 Born out of the weaknesses of the formal sector – which fostered marginalisation and impoverishment – the informal sector took root and developed as an integral part of the economic, social and even political life of the Beninese society. Policies and attitudes to the informal sector in Benin are dictated by two viewpoints: positive and negative. On the positive side, the informal sector is acknowledged for its economic and social importance. As a major creator of wealth and jobs, the informal sector contributes to poverty reduction and acts as a safety valve for social problems associated with lack of jobs and especially for alleviating the social tensions that could result from unemployment. On the negative side, the informal sector stands accused of many economic ills and abuses. It is seen as the cause of the high, heavy and complex taxation of the formal sector, which is penalising the sector and discouraging investment. The state’s policies and relations with the informal sector are marked by the ‘fiscal gendarme’ attitude. 3.92 The current and foreseeable reality of Benin’s economy is that the informal sector plays, and will continue to play, an important role at all levels of social and economic life in the country. The informal sector should therefore be the object of special attention, both by the government and by its development partners. The CRM is of the opinion that a strategy combining these approaches would be the best option for Benin. Such a strategy would have a threefold effect: it would promote the complementary nature of the formal and informal sectors through subcontracting and consequent tax incentives; it would identify ways of extending the tax base without this becoming a form of ‘harassment’ of the informal sector; and finally, it would promote an aid programme in response to the needs of the informal sector. 3.5.7 Reform and modernisation of the state 3.93 The reform and modernisation of the state amount to defining the very nature of the state model that would ideally be established in the Benin of tomorrow. It also implies that reforms have to move from the present consumer state to the facilitating state, which will be the pillar of transformation and the leader in constructing the vision of an emerging Benin. The result is the transformation of the state apparatus into a machine of change. Consequently, major reforms have been initiated over the past few years, involving mainly 27