© Marie-Martine Buckens

“I am convinced that foreign trade can make it possible to improve the population’s well-being”, declared Ivohasina Razafimahefa right away. This young economist ¬– just 35 years old – knows what he is talking about. Was not his doctoral thesis, presented in 2005 at Kobe University in Japan, entitled 'Dynamic international competitiveness and national well-being: the case of developing countries, especially sub-Saharan countries’? It is hardly surprising therefore that President Marc Ravalomanana – who made opening up Madagascar to the global economy the cornerstone of his programme – appointed him to the strategic post of Minister for the Economy, Trade and Industry. A post he has held since October 2007 after being Secretary General of the Madagascar Action Plan (MAP) and being described in the press as “the man behind the scenes of the presidency”.

In the current context, talk of foreign trade inevitably involves the Economic Partnership Agreements (EPAs). “At the present time (22 August, editor) senior civil servants from the Eastern and Southern Africa (ESA) group of countries are meeting in the Madagascan capital to achieve progress in negotiations on the EPAs with the European Union.” Negotiations that look like being difficult. Of the 16 ESA member countries, 10, including Madagascar, signed an interim agreement in December 2007 when faced with the seeming impossibility of signing EPAs by the deadline set. “We offered to host this conference as the safeguard measures vary depending on the characteristics of each country and it is time to adopt a common position”, continues the minister. The sectors judged to be a priority range from agriculture to fishing and include trade. For Madagascar, the priority is the very concept of level of development. “In the framework of EPA negotiations we want questions linked to development to be treated in the same way as those linked to market access.”

The race for the lychee

What Ivohasina Razafimahefa is defending is the notion of ‘supply capacity’. “Take the price of electricity for example. In Madagascar it costs 30 cents per kilowatt hour, whereas in Europe and Africa it costs a third or even a quarter of that price; if we open up our market, we are going to be swamped.” Another example is the marketing of lychees. This is a particularly promising market as Madagascar, which controls 90 per cent of the fresh lychee market, is the only country to be able to supply this fruit for the New Year festivities. It is a sector that has to deal with an often chaotic production organisation and difficult transport conditions: “The lychee has to travel 500 km before arriving at the port of Tamatave. Given the state of the roads, it is a trip that can take as long as a week, and this without cold storage”, explains the minister, who adds that: “We need support measures apart from the European Development Fund. This ‘trade aid’ is also of benefit to Europeans who will ultimately suffer from the lack of purchasing power of Madagascans. If not, what is the point of the EPAs? If the EU sends us a strong signal on the development issue, there is every chance that we will reach an agreement within the ESA group of countries.” 

The test of regional integration

Developing international trade is a major challenge for the traditionally inward-looking islander. The Minister for the Economy is well aware of this, but is counting on regional integration as “a first step towards opening up internationally”. He also points out that Madagascar is one of the 11 countries that signed, on 18 August, the agreement on the free trade area (FTA) of the Southern Africa Development Community (SADC), a grouping of 15 countries. Nevertheless, the volume of trade with Southern Africa remains of marginal importance (just about 2 per cent of Madagascar’s external trade), far less than with the EU for example. So what are Madagascar’s leading export products? First is textiles. “This is a relatively important sector with 150,000 jobs. Although affected somewhat by the dismantlement of the Multi-Fibre Agreement (MFA), it remains solid”, stresses Ivohasina Razafimahefa, who adds that: “We are contemplating enlargement of the legal framework (free zones, editor) to include other export sectors; negotiations are in progress with the private sector, in particular in the tourism and artisanal sectors so that they can benefit from promotional measures even if they do not export 100 per cent. The legislation is in the pipeline.”

The challenge of agri-foodstuffs

To ensure food security and produce a surplus for export: that is the goal of the ‘green revolution’ laid down in the Madagascan Action Plan.

For that, explains Philibert Rakotoson, Secretary General at the Ministry of Agriculture, “we must double food production”. That is a formidable challenge for an economy characterised by small extensive farms that have to deal with a land tenure system that is often chaotic (in 2006 just 10 per cent of territory was covered by land certificates and titles). Then there are the difficulties of small-scale farmers (80 per cent of the population) in gaining access to credit. “These are all problems the MAP is tackling. But, it is not about reproducing Africa’s first green revolution”, warns the Secretary General. “That did not work because it copied the Asian model. They sought to privatise the inputs without having adequate infrastructure; it is that which made the difference.” He adds that: “This is why most of Madagascar’s agriculture has remained on the high plateaus without entering the coastal villages that needed these inputs.” But what about the development of infrastructure, a major priority for opening up the rural world? “Certainly, provided that one remembers the human factor, through training in particular.” 

To achieve this twofold objective, the MAP is also tackling another feature of Madagascar’s agricultural production that is dominated by the rice crop. Rice is the staple diet of a population who live in fear of every fluctuation in world rice prices. Despite an impressive network of rice fields, Madagascar is not self-sufficient in rice and every September it experiences a bridging period during which rice is often in short supply. One of the solutions is the famous System of Rice Intensification (SRI) which, when coupled with System of Rice Improvement (SRA), would make it possible to double the average yield per hectare to 5 tonnes. Philibert Rakotoson recognises that this requires a lot of work and efficient water management. But the MAP also includes plans to diversify crops, “in particular in the direction of a market-focused production rather than a subsistence diet, notably with cash crops (such as vanilla and coffee), fruits, and market gardening”. This also brings a further challenge: to meet the international demands of quality standards.

Madagascar in figures

Land area: 587,040 sq. miles

Independence: 26 juin 1960

President: Marc Ravalomanana (party ‘Tiako i Madagasikara’ – ‘I love Madagascar’)

Population: 18 million

Main exports: vanilla, cloves, shrimps, mining products, textiles

Main Imports: industrial goods, machinery, food, chemicals, metals

Value of exports: €673M (2005)

Value of imports: €1.300M

Life expectancy at birth in years: 62.5 (2008)

Infant mortality rate (per 1,000 lives birth): 55.6

GNI: US$5bn (2005)

GNI per capita: US$271 (2007)

GDP – real growth rate: 6.3 per cent (2007)

Inflation rate: 10.3 per cent (2007) vs. 18.4 per cent (2005)

National legislature: Bicameral system with elections by universal suffrage every five years.
Next presidential election due in 2012

Main political parties: ‘Tiako i Madagasikara’ (TIM), ‘Antoko Miombona Ezaka’ (AME) and ‘Avant-garde pour la rénovation de Madagascar’ (AREMA). Note that 22 opposition parties have formed a common front.

Madagascar
A Remarkable History
“We want to set an example for other ACP countries”
"An area of stability where resources can be mobilised for development"
“Turning the economy around”
Natural resources that need managing
Decentralisation - ACORDS: A Pioneering Programme
“The MAP doesn’t take enough account of social problems”
Education: highly sensitive reforms
Creating greater congruence between human and natural systems
A Malagasy medley

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