Madagascar Economy

Madagascar Population and Economy 1998


In 1998 the Madagascar population was estimated at 15. 057. 000 residents (density 26 residents / km ²). The high annual growth rate (32 ‰ in the period 1990 – 98) is not reflected in a corresponding increase in the gross domestic product per capita, which after a slight recovery (early 1990s), subsequently marked the pace (average annual change: – 1.6 %, in real terms, over the period 1990 – 97). The capital, Antananarivo, the only properly urban center, counted 1. 052. 800 pop. at the date of the last census (1993).

The distribution of the population of Madagascar is, as in the past, very irregular: the most consistent densities occur in a roughly triangular area, with a base along the east coast and a vertex west of Antananarivo, which covers 20 % of the surface. and includes 50 % of the residents.

Economic conditions

The dominant sector of the economy remains the primary one, which in 1997 contributed to forming 32 % of GDP, employing a very high share of the labor force.

About half of arable land is used to grow rice (1. 180. 000 hectares and 26 million q in 1996), the main basis of local food, which must however be supplemented by imports. Exports of commercial crop products (vanilla, coffee, cloves, coconuts, tropical fruit, cotton and sisal) make a decisive contribution to the trade balance, which however remains chronically negative. Significant progress is being made in the fishing sector, practiced, for remuneration, by ocean-going vessels from the European Union within the exclusive economic zone of Madagascar. The mining sector makes a completely marginal contribution to the Malagasy economy. Projects to revive the exploitation of ilmenite (titanium ore) deposits, already cultivated until 1977in the southeastern part of the country, they face opposition from environmental movements. Other mining projects involve deposits of bauxite, coal and oil, the latter discovered in the early 1990s. The manufacturing industry has several plants in the traditional sectors (textile, food, wood and paper).

Legislation that entered into force in 1986 attracted new investments by foreign entrepreneurs in the fertilizer, pharmaceuticals, textiles and cement sectors. But Madagascar remains dependent on abroad for the needs of machinery, vehicles, chemicals and crude oil. Madagascar’s external debt amounted to $ 4105 million in 1997 ; in that year the cost of servicing the debt was equal to 7 % of the total value of exports of goods and services. In 1993, the new government began negotiations with international financial institutions to obtain funding for an economic reform program. In March 1997 the Malagasy president signed an agreement for the structural reorganization of the economy and obtained the support of France in the negotiations on the reduction of Madagascar’s debt towards the countries of the Paris Club.


According to WATCHTUTORIALS, the independence from France, obtained in 1960, did not mark the start of profound structural transformations for Madagascar Both the authoritarian and personalistic government of P. Tsiranana (1960-72) and the subsequent military dictatorship, led by D. Ratsiraka since 1975, in fact left the contradictions of the previous colonial regime substantially unresolved, and in the face of the worsening of the economic situation the country fell under French influence. The growing social malaise and the sharpening of regional conflicts weakened the authority of Ratsiraka who was forced in 1990 to restore multi-partyism and, in 1992, after the approval of a new parliamentary constitution, to call general elections. A. Zafy, leader of the Comité des forces vives (CFV), a coalition of central parties, was elected president of the Republic in 1993, and the CFV won the majority of seats in Parliament; Prime Minister was appointed F. Ravony. The political situation, however, remained uncertain both due to the fragmentation of the political forces and the differences that arose within the majority coalition regarding the economic policy choices made by the executive. In June 1994 the agreement reached by the government with the International Monetary Fund and the World Bank (which provided for heavy cuts in public spending) was rejected by a majority by Parliament and openly criticized by the head of state who proposed, alternatively, financial agreements with private companies. The conflict between Zafy and Ravony intensified in the following months and took on the characteristics of an institutional clash, culminating in the victory of the president who, following the outcome of the referendum promoted by him to modify the constitution (September 1995), obtained the prerogative of appoint the prime minister.

However, even the new government headed by E. Rakotovahini was paralyzed by internal struggles, while Zafy was progressively isolated. Furthermore, regional conflicts worsened between the representatives of the population of the coast, which included the president and the prime minister, and the Merina political elite, originally from the internal highlands, mostly in Parliament. Polarized against Zafy, the opposition finally succeeded in imposing a new government (May 1996), but it too, faced with the rekindling of disputes over economic policy, was soon condemned to immobility.

To take advantage of the uncertain and contradictory political situation was Ratsiraka who surprisingly managed, in January 1997, to win the presidential elections, held after the dismissal of President Zafy, decreed by Parliament in July 1996 for violation of the Constitution. Returning after five years at the helm of the country, Ratsiraka was the promoter of a reform of the state in a federal sense, harshly opposed by the opposition because it provided, together with regional decentralization, a strengthening of the powers of the executive and abolished the possibility of Parliament to dismiss the president of the Republic. The constitutional amendments were approved in a referendum in March 1998, with a majority of 50,96 %. The new political elections in May confirmed the regained popularity of Ratsiraka whose party, the ARENA (Association pour la renaissance de Madagascar), won the majority of seats (63 out of 150).

At the international level, relations with Israel, South Africa and South Korea were re-established in the early 1990s, although France remained the country’s main trading partner. Furthermore, starting from 1997, Madagascar tried to forge relations with the industrialized countries of South-East Asia and in 1999 strengthened trade relations with China.

Madagascar Economy

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