Major oil companies are scrambling for oil off the shores of Madagascar, which has rich mineral reserves and huge quantities of gemstones, including an estimated 70% of the world’s sapphires. The former French colony is the world’s biggest exporter of vanilla and occupies a strategic position off the volatile African coast, 400km to the west.
It has major tourist potential, including beautiful beaches, dramatic scenery and unique flora and fauna, sheltering tens of thousands of species found nowhere else on earth.
Oil giant Exxon is ramping up exploration and believes there could be as much as 10-billion barrels of oil off the coast.
And yet, the world’s fourth largest island remains one of the poorest countries on the globe, with 75% of its population living on less than $1 a day.
Reminders of this poverty are everywhere in the capital Antananarivo from the tiny, dirty children and their mothers who swarm around foreigners arms outstretched, to an army of street prostitutes, and families living rough at night.
The reasons for such poverty are rooted in an unhappy cocktail of factors ranging from the predominantly rural economy — highly vulnerable to external shocks, particularly cyclones and high oil prices — to more than 20 years of Marxist misgovernment by former President Didier Ratsiraka, to a highly traditional society where ancestors are revered.
Crisis
An eight-month crisis in 2001-2002, when Ratsiraka refused to accept the election of current President Marc Ravalomanana, added to the island’s woes, cutting GDP by 13%.
The economy was central in last weekend’s election, where Ravalomanana, a darling of Western donors, campaigned for a second term on his infrastructure reforms while the opposition accused him of not doing enough to combat poverty.
The president, a dairy tycoon who built a fortune from humble origins, looks well set for victory but final results will not be known for several weeks.
One reason Ravalomanana is backed by donors is that he is trying to combat some of the social factors behind the poverty, including one of the world’s highest birth rates, at 3%, which eats up much of economic growth of under 5%.
He is also pushing to reduce the population’s resistance to modernisation because of the importance of tradition and respect for ancestors — exhumation of relatives to ceremonially renew their shrouds is still practised in the island’s high plateau.
Madagascar was settled 1 500 years ago by peoples from Indonesia and Malaysia who travelled across the Indian Ocean in canoes. Because of that history, rice is the staple of Madagascans and they spend 40% of their income on it.
The deep green paddy fields of the countryside, with peasants knee deep in water bent over the crop, still look more like south-east Asia than the African region.
Even when the rice crop is devastated by cyclones or world prices rise, Madagascans refuse to switch to other staples.
Foreign experts say rice cultivation in Madagascar still uses techniques imported from Asia more than 1 000 years ago, as farmers dutifully stick to their grandfathers’ methods.
”The rice yield is the lowest in the world,” one Western diplomat said in Antananarivo.
Drama
”The drama of Madagascar is that it is has systematically declined across the economy for the last 40 years,” said International Monetary Fund (IMF) representative Pierre van den Boogaerde.
Rice output has remained static while the population increased from six to 18-million, turning Madagascar from an exporter to an importer, Boogaerde told Reuters.
”They could double rice production on the same area.”
Chronic corruption, isolation and vulnerability to external shocks cut real incomes by 40% to $235 per person in 2004 from $401 in 1965, the World Bank says.
Diplomats credit Ravalomanana with making progress in his first term, especially with an aggressive road building programme that the World Bank says has nourished the longest period of rural growth in 30 years.
”Roads are the essence of connecting people to markets,” World Bank country director James Bond told Reuters.
However, Boogaerde said, his 2003 relaxation of import taxes to encourage investment flooded the market with foreign products and weakened the Madagascan currency — a cause of much opposition criticism.
But donors, and most Madagascans judging from early election results, are ready to give Ravalomanana more time to complete his economic reforms and they are watching anxiously to see if a new crisis can be avoided after this election.
”What the country has lacked for investors is democratic maturity. They want a sign of political stability … that will boost domestic and international investment, Boogaerde said.
”We have already seen our president working for five years. Now we will see whether he really wants change,” said retired electrician Edmond Rakotoarivelo. – Reuters