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Economy of Madagascar

Structural reforms began in the late 1980s, initially under pressure from international financial institutions. An initial privatization program (1988-1993) and the development of an export processing zone (EPZ) regime in the early 1990s were key milestones in this effort. A period of significant stagnation from 1991-96 was followed by 5 years of solid economic growth and accelerating foreign investment, driven by a second wave of privatizations and EPZ development. Although structural reforms advanced, governance remained weak and perceived corruption in Madagascar was extremely high. During the period of solid growth from 1997 through 2001, poverty levels remained stubbornly high, especially in rural areas. A 6-month political crisis triggered by a dispute over the outcome of the presidential elections held in December 2001 virtually halted economic activity in much of the country in the first half of 2002. Following the 2002 political crisis, in coordination with international financial institutions and the donor community, the government attempted to set a new policy course and build business confidence. Madagascar developed a recovery plan in collaboration with the private sector and donors and presented it at a 2002 "Friends of Madagascar" conference in Paris organized by the World Bank. Donor countries demonstrated their confidence in the new government by pledging $1 billion in assistance over 5 years. The Malagasy Government identified road infrastructure as its principal priority and underlined its commitment to public-private partnership by establishing a joint public-private sector steering committee. In 2000, Madagascar prepared a Poverty Reduction Strategy Paper (PRSP) under the Heavily Indebted Poor Countries (HIPC) Initiative. The boards of the International Monetary Fund (IMF) and World Bank agreed in December 2000 that the country had reached the decision point for debt relief under the HIPC Initiative and defined a set of conditions for Madagascar to reach the completion point. In October 2004, the boards of the IMF and the World Bank determined that Madagascar had reached the completion point under the enhanced HIPC Initiative. The Madagascar-U.S. Business Council was formed in Madagascar in 2002. The U.S.-Madagascar Business Council was formed in the United States in May 2003, and the two organizations continue to explore ways to work for the benefit of both groups. An American Chamber of Commerce was launched at the end of 2008 and remains active even after the 2009 coup d’etat. Madagascar’s ongoing political crisis continues to negatively impact key economic indicators and the business sector. The actions of the HAT regime forced the United States under existing law to withdraw African Growth and Opportunity Act (AGOA) eligibility from Madagascar at the end of 2009, a situation which resulted in the loss of thousands of jobs. Parts of the country have returned to a barter economy, reports indicate many laid-off workers have reverted to the informal sector, and standards of living have declined since the coup. GDP (U.S.$, 2009 est., official exchange rate): $8.6 billion. GDP per capita (2009 est., official exchange rate): $438. GNI per capita (2009 est., purchasing power parity): $990. Unemployment: no reliable data available. Natural resources: Graphite, chrome, coal, bauxite, ilmenite, nickel, gold, oil, tar sands, uranium, precious and semiprecious stones, and hardwoods. Agriculture (29% of GDP, 2009 est.): Products --rice, livestock, seafood, coffee, vanilla, sugar, cloves, cotton, sisal, peanuts, and tobacco. Industry (15.9% of GDP, 2008 est.): Types --processed food, clothing, textiles, mining, paper, refined petroleum products, glassware, construction, soap, cement, tanning. Trade: Exports (28% of GDP, 2009 est.): vanilla, coffee, cloves, shrimp, graphite, essential oils, apparel, industrial minerals and gemstones. Major export markets --France, U.S., Germany, Italy, U.K. Imports (52% of GDP, 2009 est.): foodstuffs, fuel and energy, capital goods, vehicles, consumer goods and electronics. Major suppliers --France, China, Iran, Mauritius, Hong Kong.

Geography of Madagascar

Location: Southern Africa, island in the Indian Ocean, east of Mozambique Map references: Africa Area: total area: 587,040 sq km land area: 581,540 sq km comparative area: slightly less than twice the size of Arizona Land boundaries: 0 km Coastline: 4,828 km Maritime claims: contiguous zone: 24 nm continental shelf: 200 nm or 100 nm from the 2,500-m isobath exclusive economic zone: 200 nm territorial sea: 12 nm
International disputes:
claims Bassas da India, Europa Island, Glorioso Islands, Juan de Nova Island, and Tromelin Island (all administered by France) Climate: tropical along coast, temperate inland, arid in south Terrain: narrow coastal plain, high plateau and mountains in center Natural resources: graphite, chromite, coal, bauxite, salt, quartz, tar sands, semiprecious stones, mica, fish Land use: arable land: 4% permanent crops: 1% meadows and pastures: 58% forest and woodland: 26% other: 11% Irrigated land: 9,000 sq km (1989 est.) Environment: current issues: soil erosion results from deforestation and overgrazing; desertification; surface water contaminated with raw sewage and other organic wastes; several species of flora and fauna unique to the island are endangered natural hazards: periodic cyclones international agreements: party to - Endangered Species, Marine Life Conservation, Nuclear Test Ban; signed, but not ratified - Biodiversity, Climate Change, Desertification, Law of the Sea Note: world's fourth-largest island; strategic location along Mozambique Channel

Government of Madagascar

The principal institutions of the Republic of Madagascar are a presidency, a parliament, a prime ministry and cabinet, and an independent judiciary. The president is elected by direct universal suffrage for a 5-year term, renewable twice. The last presidential election was held on December 3, 2006. There is currently no legitimate sitting president in Madagascar. In Madagascar, the parliament has two chambers; the National Assembly and the Senate. The last National Assembly election was held on September 23, 2007, and marked a significant reform to the parliament. The National Assembly previously had 160 members, elected for a 4-year term in single-member and two-member constituencies. However, in July 2007, just before the National Assembly elections, a council of ministers agreed to reduce the number of parliamentarians from 160 to 127. Consequently, few of the 116 districts elected more than one member. Antananarivo's six districts, however, each elected two deputies. The Senate has 33 members, with 22 members elected for a 6-year term, 1 for each province by provincial electors, and 11 members appointed by the president. Following the 2009 coup d'etat, the Malagasy National Assembly and Senate were dissolved by the de facto authorities. Thus, there is currently no legitimate legislative body in Madagascar. The prime minister and members of parliament initiate legislation, and the government executes it. The president can dissolve the National Assembly. For its part, the National Assembly can pass a motion of censure and require the prime minister and council of ministers to step down. The Constitutional Court approves the constitutionality of new laws. In an effort to decentralize administration, the country's six provinces were dissolved in the constitutional referendum of 2007, in favor of 22 regions designated previously in 2004. Decentralization is an ongoing process, and has been a key element of Madagascar's development plans. POLITICAL CONDITIONS Madagascar's first President, Philibert Tsiranana, was elected when his Social Democratic Party gained power at independence in 1960 and was reelected without opposition in March 1972. However, he resigned only 2 months later in response to massive antigovernment demonstrations. The unrest continued, and Tsiranana's successor, Gen. Gabriel Ramanantsoa, resigned on February 5, 1975, handing over executive power to Lt. Col. Richard Ratsimandrava, who was assassinated 6 days later. A provisional military directorate then ruled until a new government was formed in June 1975, under Didier Ratsiraka. During the 16 subsequent years of President Ratsiraka's rule, Madagascar's government was committed to revolutionary socialism based on the 1975 constitution that established a highly centralized state. Elections in 1982 and 1989 returned Ratsiraka for a second and third 7-year presidential term. For much of this period, only limited and restrained political opposition was tolerated, with no direct criticism of the president permitted in the press. In the late 1980s, the Ratsiraka regime came under increasing pressure to make fundamental changes. With a deteriorating economy, mass demonstrations, and crippling general strikes, the limited economic and political reforms Ratsiraka enacted were insufficient to placate a growing opposition movement known as Hery Velona or "Active Forces." A number of already existing political parties and their leaders, among them Albert Zafy and Rakotoniaina Manandafy, anchored this movement. In a bid to placate this opposition, Ratsiraka replaced his prime minister in August 1991 but suffered an irreparable setback soon thereafter when his troops fired on peaceful demonstrators marching on his suburban palace, killing more than 30. In an increasingly weakened position, Ratsiraka acceded to negotiations on the formation of a transitional government. The resulting "Panorama Convention" of October 31, 1991, stripped Ratsiraka of nearly all of his powers, created interim institutions, and set an 18-month timetable for completing a transition to a new form of constitutional government. The High Constitutional Court was retained as the ultimate judicial arbiter of the process. In March 1992, a widely representative National Forum organized by the Malagasy Christian Council of Churches (FFKM) drafted a new constitution, which was put to a nationwide referendum in August 1992 and approved by a wide margin, despite efforts by pro-Ratsiraka "federalists" to disrupt balloting in several coastal areas. Presidential elections were held on November 25, 1992, after the High Constitutional Court had ruled, over "Active Forces" objections, that Ratsiraka could become a candidate. Runoff elections were held in February 1993, and the leader of the Hery Velona movement, Albert Zafy, defeated Ratsiraka. Zafy was sworn in as President on March 27, 1993. After President Zafy's impeachment by the National Assembly in 1996 and the short quasi-presidency of Norbert Ratsirahonana, the 1997 elections once again pitted Zafy and Ratsiraka, with Ratsiraka this time emerging victorious. A National Assembly, dominated by members of President Ratsiraka'a political party AREMA, subsequently passed the 1998 constitution, which considerably strengthened the presidency. In December 2001, a presidential election was held in which both major candidates claimed victory. The Ministry of the Interior declared incumbent Ratsiraka of the AREMA party victorious. Marc Ravalomanana contested the results and claimed victory. A political crisis followed in which Ratsiraka supporters cut major transport routes from the primary port city to the capital city, a stronghold of Ravalomanana support. Sporadic violence and considerable economic disruption continued until July 2002 when Ratsiraka and several of his prominent supporters fled to exile in France. In addition to political differences, ethnic differences played a role in the crisis and continue to play a role in politics. Ratsiraka is from the coastal Betsimisaraka tribe and Ravalomanana comes from the highland Merina tribe. After the end of the 2002 political crisis, President Ravalomanana began many reform projects, forcefully advocating "rapid and durable development" and launching a battle against corruption. December 2002 legislative elections gave his newly formed TIM ( Tiako-i-Madagasikara --I Love Madagascar) Party a commanding majority in the National Assembly. November 2003 municipal elections were conducted freely, returning a majority of supporters of the president, but also significant numbers of independent and regional opposition figures. On March 17, 2009, after a period of demonstrations in the capital, President Ravalomanana signed power over to the military, which in turn conferred the presidency on opposition leader Andry Rajoelina, the elected mayor of Antananarivo and leader of the demonstrations. Rajoelina declared himself “President of the High Transitional Authority” and pledged to hold presidential elections by October 2010 (a pledge that he did not fulfill), following a constitutional referendum and revision of the electoral code. The United States has condemned the unconstitutional and undemocratic change of power in Madagascar and considers the series of events of early 2009 that led to the installation of the de facto leadership to be a military coup d’etat. Principal Government Officials HAT (High Transitional Authority) President--Andry Nirina RAJOELINA HAT Prime Minister--Camille Albert VITAL HAT Minister of State for Economy and Industry--Pierrot RAJAONARIVELO HAT Minister of State for Relations with Institutions--Yves Aime RAKOTOARISOA HAT Minister of Foreign Affairs--Yvette SYLLA HAT Minister of Finance and Budget--Hery RAJAONARIMAMPIANINA HAT Minister of Mines and Hydrocarbons--Mamy RATOVOMALALA HAT Minister of Defense--Division General Lucien RAKOTOARIMASY HAT Minister of Commerce and Trade--Irene Eva RAZAFIMANDIMBY RINASOA HAT Minister of Justice--Christine Harijaona RAZANAMAHASOA HAT Minister of Environment, Water and Forests--Herilanto RAVELOHARISON HAT Minister of Internal Security--Dieudonne RANAIVOSON HAT Minister of National Education--Jean Jacques RABENIRINA HAT Minister of Tourism--Riana ANDRIAMANDAVY VII Ambassador to the U.S.--vacant Ambassador to the UN--Zina Andrianarivelo-Razafy Madagascar maintains an embassy in the United States at 2374 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-265-5525) Type: Republic. Independence: June 26, 1960. Constitution: Entered into force in March 1998. Branches: Executive--president, prime minister, cabinet. Legislative--National Assembly and Senate. Judicial--Supreme Court, High Court of Justice, Constitutional High Court. Subdivisions: Six autonomous provinces (faritany). Political parties: There are several political parties. In the September 2007 National Assembly elections, the I Love Madagascar (TIM) Party won a majority of seats. Suffrage: Universal at 18. National holiday: June 26.

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History of Madagascar

Madagascar's population is predominantly of mixed Asian and African origin. Recent research suggests that the island was uninhabited until Indonesian seafarers arrived in roughly the first century A.D., probably by way of southern India and East Africa, where they acquired African wives and slaves. Subsequent migrations from both the Pacific and Africa further consolidated this original mixture, and 18 separate tribal groups emerged. Asian features are most predominant in the central highlands people, the Merina (3 million) and the Betsileo (2 million); the coastal people are of more clearly African origin. The largest coastal groups are the Betsimisaraka (1.5 million) and the Tsimihety and Sakalava (700,000 each). The written history of Madagascar began in the seventh century A.D., when Arabs established trading posts along the northwest coast. European contact began in the 1500s, when Portuguese sea captain Diego Dias sighted the island after his ship became separated from a fleet bound for India. In the late 17th century, the French established trading posts along the east coast. From about 1774 to 1824, it was a favorite haunt for pirates, including Americans, one of whom brought Malagasy rice to South Carolina. Beginning in the 1790s, Merina rulers succeeded in establishing hegemony over the major part of the island, including the coast. In 1817, the Merina ruler and the British governor of Mauritius concluded a treaty abolishing the slave trade, which had been important in Madagascar's economy. In return, the island received British military and financial assistance. British influence remained strong for several decades, during which the Merina court was converted to Presbyterianism, Congregationalism, and Anglicanism. The British accepted the imposition of a French protectorate over Madagascar in 1885 in return for eventual control over Zanzibar (now part of Tanzania) and as part of an overall definition of spheres of influence in the area. Absolute French control over Madagascar was established by military force in 1895-96, and the Merina monarchy was abolished. Malagasy troops fought in France, Morocco, and Syria during World War I. After France fell to the Germans in 1942, Madagascar was administered first by the Vichy Government and then by the British, whose troops occupied the strategic island to preclude its seizure by the Japanese. The Free French received the island from the United Kingdom in 1943. In 1947, with French prestige at low ebb, a nationalist uprising was suppressed after several months of bitter fighting. The French subsequently established reformed institutions in 1956 under the Loi Cadre (Overseas Reform Act), and Madagascar moved peacefully toward independence. The Malagasy Republic was proclaimed on October 14, 1958, as an autonomous state within the French Community. A period of provisional government ended with the adoption of a constitution in 1959 and full independence on June 26, 1960.

People of Madagascar

Madagascar's population is predominantly of mixed Asian and African origin. Research suggests that the island was uninhabited until Indonesian seafarers arrived in roughly the first century A.D., probably by way of southern India and East Africa, where they acquired African wives and slaves. Subsequent migrations from both the Pacific and Africa further consolidated this original mixture, and 18 separate tribal groups emerged. Asian features are most predominant in the central highlands people, the Merina (3 million) and the Betsileo (2 million); the coastal people are of more clearly African origin. The largest coastal groups are the Betsimisaraka (1.5 million) and the Tsimihety and Sakalava (700,000 each). The Malagasy language is of Malayo-Polynesian origin and is generally spoken throughout the island, with significant regional variations. French is spoken among the educated population of this former French colony. English is becoming more widely spoken, and in 2003 the government began a pilot project of introducing the teaching of English into the primary grades of 44 schools, with hopes of taking the project nationwide. In 2010, however, the de facto government introduced measures that would limit the use and teaching of English. Most people practice traditional religions, which tend to emphasize links between the living and the dead. They believe that the dead join their ancestors in the ranks of divinity and that ancestors are intensely concerned with the fate of their living descendants. The Merina and Betsileo reburial practice of famadihana, or "turning over the dead" celebrates this spiritual communion. In this ritual, relatives' remains are removed from the family tomb, rewrapped in new silk shrouds, and returned to the tomb following festive ceremonies in their honor. About 41% of the Malagasy are Christian, divided almost evenly between Roman Catholic and Protestant. Many incorporate the cult of the dead with their religious beliefs and bless their dead at church before proceeding with the traditional burial rites. They also may invite a pastor to attend a famadihana. While many Christians continue these practices, others consider them to be superstitions that should be abandoned. Many of the Christian churches are influential in politics. In the coastal regions of the provinces of Mahajanga and Antsiranana (Diego Suarez), Muslims constitute a significant minority. Muslims are divided between those of Malagasy ethnicity, Indo-Pakistanis, and Comorans. Nationality: Noun and adjective --Malagasy. Population (2010 estimate): 20.1 million. Annual population growth rate (2009 estimate): 2.7%. Ethnic groups: 18 Malagasy tribes; small groups of Comorans, French, Indians, and Chinese. Religions: Traditional beliefs 52%, Christian 41%, Muslim 7%. Languages: Malagasy (official), French (official), English (official). Education: Years compulsory --5. Literacy-- 64%. Health: Infant mortality rate --41/1,000. Life expectancy --61 years (men), 64 years (women).
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