Madagascar’s Political Crisis
Lauren Ploch
Analyst in African Affairs
July 11, 2011
Congressional Research Service
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Madagascar’s Political Crisis
Summary
The Indian Ocean island of Madagascar has experienced protracted political instability since early
2009, when tensions between the country’s president, Marc Ravalomanana, and Andry Rajoelina,
the former mayor of the country’s capital city, Antananarivo, escalated, culminating in President
Ravalomanana’s forced removal from office. The unconstitutional change of power and resulting
political impasse has had a negative impact on economic growth and development efforts. The
political uncertainty has strained relations between international donors and Madagascar, which
was the first country to sign a U.S. Millennium Challenge Account compact in 2005, worth an
estimated $110 million. That compact was terminated in May 2009, based on the U.S.
government’s determination that Madagascar had experienced a military coup d’etat.
In March 2009, under pressure from mutinous soldiers and large crowds of protestors, President
Ravalomanana fled the country. The military then conferred state authority to Rajoelina, who has
since held power under a self-declared transitional government. Periodic demonstrations by
Ravalomanana supporters following the takeover led to violent clashes with security forces.
Negotiations in August 2009 between the parties led to the signing of an agreement in Maputo,
Mozambique to establish an inclusive, transitional government, but Rajoelina subsequently
appointed a new government seen to be primarily composed of his own supporters. Southern
African leaders and Madagascar’s opposition parties rejected the proposed government, and
negotiations resumed. To date, the country’s political parties have failed to reach consensus on a
way forward toward democratic elections.
Following coups elsewhere in Africa in 2008, the African Union, the United States, and the
European Union, among others, warned against an unconstitutional transfer of power on the
island nation and have since suspended most foreign aid. The African Union has imposed targeted
sanctions on individuals in the de facto government. The African Union and the Southern African
Development Community have also suspended Madagascar from their respective regional
organizations until constitutional order is restored. The Malagasy government’s budget has
traditionally been heavily dependent on donor aid, and the current international aid restrictions
have significantly affected government spending.
Madagascar ranks among the world’s poorest countries, with more than two-thirds of the
population living below the poverty line. The country is the world’s fourth largest island and is
extremely biologically diverse, with as many as 150,000 species of flora and fauna that are
unique to the island. Madagascar faces a host of environmental pressures, however, and the U.S.
State Department reports that illegal logging and endangered wildlife exports have substantially
increased since the current de facto government assumed power. Congress has expressed concern
with threats to Madagascar’s unique ecosystem, as well as with the country’s ongoing political
and development challenges. The House of Representatives passed legislation in 2009, H.Res.
839, condemning the 2009 coup and the illegal extraction of Madagascar’s natural resources.
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Madagascar’s Political Crisis
Contents
Overview .................................................................................................................................... 1
Political Background................................................................................................................... 2
The 2001 Election and the Post-Election Crisis ..................................................................... 2
The Ravalomanana Government ........................................................................................... 2
Tensions Rise between Ravalomanana and Andre Rajoelina .................................................. 3
The 2009 Political Crisis ............................................................................................................. 4
The Military Takes Sides....................................................................................................... 4
International Reactions and Mediation Efforts ....................................................................... 5
The Impasse Continues ......................................................................................................... 7
The Impact of the Political Crisis on the Economy ...................................................................... 7
U.S. Relations with Madagascar.................................................................................................. 9
Trade .................................................................................................................................. 10
Figures
Figure 1. Map of Madagascar.................................................................................................... 11
Contacts
Author Contact Information ...................................................................................................... 11
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Madagascar’s Political Crisis
Overview
Madagascar, a former French colony, is the world’s fourth-largest island. Located in the Indian
Ocean approximately 280 miles off the Mozambique coast, it is about 30% larger than California.
Its 22 million people are a unique product of historical migrations from Africa, Arab countries,
southeast Asia, and Polynesia. They speak a Malayo-Polynesian language, Malagasy, which
functions as an official language, along with French, and serves as the noun and adjective for
Madagascar’s people. The use of English has grown in recent years. Approximately three-quarters
of the Malagasy people live in rural areas, making a living through small-scale commercial and
subsistence farming. The country regularly suffers massive economic losses, physical destruction,
and loss of life during the annual cyclone season, and from cycles of drought and floods. Over
two-thirds of the population live below the poverty line.
Madagascar is extremely biologically
Madagascar at a Glance
diverse and is unique in many ways; over
85% of its species are estimated to be
Population: 21.9
million
endemic. Its ecosystems include tropical
Pop. Growth Rate: 2.973%
forests, sandy coastal plains with
Independence:
June 1960 (from France)
vegetation, river ecosystems, mangroves,
large marshes, and coral reefs. Along with
Capital:
Antananarivo
some neighboring islands, it is famed as the
Religions:
52% indigenous beliefs, 41% Christian, 7%
exclusive home of lemurs, a unique and
Muslim
ancient suborder of primates. Madagascar is
Languages:
French (official), Malagasy (official), English
estimated to have as many as 150,000
Literacy: 68.9%
species of flora and fauna that are unique to
the island. In part due to a high population
Infant Mortality: 51.45 deaths/1,000 live births
growth rate, Madagascar faces significant
Life Expectancy: 63.63 years
environmental pressures, and flora, fauna,
Prevalence of HIV: 0.2%
and habitat loss from soil erosion associated
with deforestation, agricultural production,
Real GDP Growth: -0.2% (2010); 0.6% (2011 forecast)
and overgrazing; desertification; and water
Nominal GDP Per Capita: $1,000
pollution. Some reports suggest that illegal
External Debt:
$2.973 billion
logging and endangered wildlife exports
Exports:
coffee, vanilla, shellfish, sugar, cotton
have substantially increased since 2009,
cloth, chromite, petroleum products
when Madagascar’s democratically elected
government was dissolved.1
Human Development Index: 135 out of 169 countries
Source: CIA World Fact Book, International Monetary
Development challenges in Madagascar
Fund, United Nations Development Program
have been compounded by periodic political
unrest that has hampered economic growth and limited public investment. With most donor aid to
the government currently suspended due to the 2009 coup, public spending has dramatically
decreased while unemployment and food insecurity, exacerbated by a severe drought in the
south, have risen. Some analysts predict that these social pressures may ultimately force the
opposing political parties to negotiate a solution to the current impasse.
1 See, e.g., Hery Randriamalala and Zhou Liu, “Rosewood of Madagascar: Between Democracy and Conservation,”
Madagascar Conservation & Development, March 1, 2010; and ICG, “Crisis Heating Up?” op. cit.
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Political Background
Following independence in 1960, Madagascar was ruled by a succession of Soviet-leaning
socialist regimes, and the country suffered episodic political instability. In the late 1980s, support
from the collapsing Soviet Union waned and popular demands for democratization mounted. A
democratic transition marked by considerable unrest began in 1989, leading to the approval of a
new constitution after a 1992 referendum and presidential elections. The new government made
little headway against Madagascar's extreme poverty, and faced strikes, student unrest, and
diverse political problems, including the impeachment of President Albert Zafy in July 1996.
Didier Ratsiraka, a former military ruler, won presidential elections in November 1996. While he
generally maintained a public commitment to democracy, he also attempted to centralize political
control and backed constitutional reforms that weakened the legislature and gave him
appointment powers over a third of Senate seats. Ratsiraka’s actions gradually weakened the
opposition parties, but also engendered opposition to his rule, as did widespread allegations of
corruption within his administration.
The 2001 Election and the Post-Election Crisis
Many Ratsiraka opponents rallied to the reform message of the then-mayor of Antananarivo,
businessman Marc Ravalomanana. In December 2001, he faced President Ratsiraka in a bitterly
contested election. The election led to a tense half-year stand-off between the two candidates and
their parties after Ravalomanana, citing electoral irregularities, refused to participate in a
postponed runoff poll, and in February 2002 declared himself the winner of the election. His
election was sanctioned by the Malagasy High Constitutional Court, which rejected the need for a
run-off.2 Ravalomanana was sworn into office in May of that year, but Ratsiraka continued to
reject his opponent’s win. The two sides each marshaled their supporters and engaged in limited
armed confrontations, which threatened at times to escalate into civil war. Communications,
roads, and bridges were cut by Ratsiraka’s followers, leaving the capital with no access to the sea
or to basic supplies. Nationwide economic disruptions – which included widespread job loss and
sharp rises in malnutrition rates, aggravated by a devastating cyclone – ensued. In June 2002, the
United States was the first country to formally recognize the Ravalomanana government; France,
China, the United Kingdom and five African governments soon followed suit. The African Union
(AU), however, declined to do likewise, and suspended Madagascar from the regional body. In
early July 2002, Ratsiraka fled to exile in France. His departure was preceded by rumors that he
had been planning to sponsor a mercenary attack on Ravalomanana, but by that time allies of
Ravalomanana had consolidated political control of much of the island.
The Ravalomanana Government
Madagascar was re-admitted to the African Union nearly seven months after Ravalomanana’s
Tiako I Madagasikara (TIM, or “I Love Madagascar”) party won a majority in the National
Assembly during December 2002 legislative elections that were seen as a test of his
administration’s legitimacy. Ravalomanana faced significant economic challenges after the
2 In the first vote count, Ravalomanana garnered less than the 50% needed to avoid a run-off, but African leaders
facilitated a recount that gave the candidate 51.5% of the vote.
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extended political crisis and related economic disruptions, but received pledges of substantial
support from Western donors, a trend that continued throughout his tenure. His administration
pursued an agenda that sought to reduce poverty and improve governance, respect for the rule of
law, economic growth, and market liberalization.
Many former officials from the Ratsiraka government were subsequently tried and sentenced on
charges of corruption or political abuses. The court cases were viewed by many as a signal that
the Ravalomanana administration was serious about addressing past political abuses and had
consolidated political power. However, the government also pursued efforts to bring about
political reconciliation and to demonstrate moderation in dealings with its former foes. It
provided amnesties for many alleged offenses associated with the Ratsiraka government and the
2002 crisis, and several former Ratsiraka supporters were made members of Ravalomanana’s
cabinet. Ravalomanana did not seek the extradition of Ratsiraka. These actions broadened the
President’s regional base of support during his first term, and alleviated concerns that he might
promote his own ethnic and political bases at the expense of other constituencies.
Ravalomanana was re-elected in December 2006 with almost 55% of the vote, and legislative,
provincial, and regional elections were held in late 2007 and early 2008.3 In an April 2007
referendum, President Ravalomanana received 70% approval for a series of constitutional
changes, including a controversial proposal to give the President greater power during a state of
emergency and a proposal to abolish the provinces and allow municipal and local governments
more authority.4 The referendum also approved English as a third official language. According to
the State Department, elections under the Ravalomanana government were generally free and fair.
The ruling party’s overwhelming victory at the polls in 2006-2008, despite growing public
dissatisfaction with slow improvements in living standards, significantly eroded the opposition
parties’ credibility. Voter turnout for March 2008 regional elections was low, and many analysts
suggest that the lack of a credible opposition engendered public disenchantment with politics.
Tensions Rise between Ravalomanana and Andre Rajoelina
President Ravalomanana’s popularity, while considerable after his re-election, failed to help his
party’s candidate win the 2007 mayoral election in his former stronghold, Antananarivo, a city of
almost 2 million people. Tension between the central government and newly-elected Mayor
Andry Rajoelina’s administration subsequently mounted. In 2008, the Ravalomanana government
allegedly delayed the disbursal of funds for various local government infrastructure projects in
the capital and diverted investment away from the city. Rajoelina’s supporters claim these efforts
were intended to undermine the mayor, a young, successful media entrepreneur and former disk
jockey widely known as “Andry TGV.” TGV also stands for his movement, Tanora malaGasy
Vonona (Young Malagasy Determined).
Some observers have drawn comparisons between the 2009 political crisis and the events of
2001-2002, when Ravalomanana used his mayoral office in the capital city, which has
3 TIM candidates won over 80% of the National Assembly seats, and victories in most of the provincial elections. The
party won all seats in the 2008 regional and senatorial elections.
4 Following the 2002 crisis, Ravalomanana fired the country’s provincial governors and replaced them with presidential
appointees. Improving the effectiveness of local administration was a key goal of his administration. The U.S.-based
Freedom House ranked Madagascar “partially free” in its Freedom in the World 2008 index, noting that the referendum
increased the President’s power.
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traditionally been an opposition stronghold, to rally public support for the ouster of the incumbent
president. The marked difference between the two conflicts lies in Ravalomanana’s electoral
mandate. In 2002, the country’s judiciary had determined that Ravalomanana had defeated
Ratsiraka, who had ruled intermittently for over two decades, in nationwide elections, but the
latter refused to relinquish power. Rajoelina, on the other hand, has never faced Ravalomanana in
an election and lacked the constitutional mandate that Ravalomanana was able to claim in 2002.
The 2009 Political Crisis
In December 2008, the Ravalomanana government closed a television station owned by Mayor
Rajoelina, after it aired a speech by former President Ratsiraka, who now lives in exile in France.
When Rajoelina’s radio station was closed a month later, he convened a public demonstration to
demand the stations’ reopening, accusing President Ravalomanana of corruption and
authoritarianism. According to press reports, as many as 40,000 people attended the rally, which
was followed by several days of rioting. Rajoelina claimed that his stations were closed as part of
a politically-motivated campaign against him.
Ravalomanana removed Rajoelina from office on February 3, 2009, after the mayor declared that
he was taking over the central government and announced a parallel cabinet.5 His bid to impeach
Ravalomanana was rejected by the country’s constitutional court.6 Rajoelina continued to call for
the President’s impeachment and arrest and the establishment of a transitional government to lead
the country for two years until the constitution could be rewritten and elections held. In response,
Ravalomanana, who was expected to run for re-election when his term expired in 2011, publicly
acknowledged mistakes made by his government during the crisis and proposed a national
referendum to determine whether he should stay in office. Rajoelina rejected his proposal.
The Military Takes Sides
Madagascar’s military has historically maintained its neutrality during political confrontations.
During rise in tensions between Ravalomanana and Rajoelina, the armed forces repeatedly
pledged to protect the civilian population and maintain the rule of law, but in early 2009 appeared
to increasingly support Rajoelina. The military police actively supported the former mayor and
several army units mutinied in early March.7 On March 10, a group of soldiers reportedly forced
the resignation of the defense minister, who had only been in office one month. His predecessor
had resigned in protest in February after security forces fired on demonstrators at an opposition
rally. At least 30 people were reportedly killed in that incident, and as many as 200 were
wounded. Rajoelina’s supporters took to the streets in an effort to take control of government
offices, throwing bricks and stones at security forces. On March 11, an army colonel ousted the
Army Chief of Staff after he allegedly warned that the army would intervene in the crisis if it
were not resolved in 72 hours. Media reports of tanks deployed on March 13 in and around the
capital city, allegedly to prevent the President from employing mercenaries to protect his regime,
heightened concerns of a possible military coup d’état.8
5 Under Malagasy law, the President can dismiss elected officials who fail to fulfill their mandate.
6 The court ruled that the power to impeach the President lay with the legislature rather than the judiciary.
7 “Madagascar Officers Launch Mutiny,” BBC, March 8, 2009.
8 Scott Bobb, “Mutinous Troops in Madagascar Say They Control Army Tanks,” Voice of America, March 13, 2009.
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Rajoelina subsequently emerged from hiding to speak at a rally, again calling for President
Ravalomanana’s arrest. He was joined by National Assembly president Jacques Sylla, a former
ally of Ravalomanana, who declared his support for the deposed mayor. On March 16, 2009
soldiers seized a presidential palace and the central bank. President Ravalomanana was not at the
palace during the attack. Hundreds of supporters reportedly camped outside his residence, on the
outskirts of the capital, to protect him. Rajoelina supporters began to take control of other
government offices, including that of the Prime Minister, and Rajoelina reportedly installed
himself in the presidential offices the following day. President Ravalomanana announced that he
was stepping down and transferring authority to a military directorate (which was never
convened). The military subsequently recognized the authority of Rajoelina as president of a High
Transitional Authority (HAT, by its French acronym).9 The country’s highest court proclaimed
Rajoelina’s legitimacy the following day, and he was inaugurated as president of the HAT on
March 21.10 Rajoelina suspended the parliament, which was dominated by Ravalomanana’s party.
Political tensions on the island continued, punctuated by sporadic demonstrations.11 On several
occasions, security forces reportedly used tear gas to disperse protestors, and several
demonstrators were reportedly killed or injured. Some reports suggest that elements of the
military demanded Rajoelina’s resignation early in his tenure and continue to oppose the
transitional authority.12 In April 2010, the minister of the armed forces was fired amid rumors of a
possible coup. In May 2010, security forces loyal to Rajoelina suppressed a mutiny by a group of
gendarmerie. Rajoelina’s supporters suppressed another coup attempt in November 2010.
International Reactions and Mediation Efforts
Envoys from the United Nations, the AU, and SADC, in concert with the influential Madagascar
Council of Christian Churches, have made numerous attempts to mediate between Ravalomanana
and Rajoelina. Mediators first brought the two rivals together in February 2009, but Rajoelina
refused to participate in further talks until Ravalomanana officially stepped down. The AU
condemned the events of March 16 as an attempted coup d’état, and AU Commission Chairman
Jean Ping warned the Malagasy military against handing power to Rajoelina. 13 According to
Madagascar’s constitution, in the event of a presidential vacancy, the president of the Senate
should assume the office and hold new elections within two months, rather than the two years
Rajoelina initially proposed. The constitution also required the President to be at least 40 years of
age; Rajoelina was born in 1974. On March 20, 2009, the AU Peace and Security Council, citing
an unconstitutional change of government, announced its decision to suspend Madagascar from
participation in AU activities. Southern African leaders suspended the country from SADC at a
March 30 regional summit in Swaziland, following a briefing from Ravalomanana. On April 30,
the AU, SADC, the Common Market for Eastern and Southern Africa (COMESA), the
Organisation internationale de la Francophonie (OIF), the permanent members of the UN
9 “Madagascar President Forced Out,” BBC, March 17, 2009.
10 The court announced in a radio address that Rajoelina “is serving as president of the republic,” according to “Top
Court Endorses Army-Supported Opposition Leader to Replace Toppled President,” Associated Press, March 18, 2009.
11 In April 2009, Ravalomanana announced from exile the creation of a new government, to be led by Manandafy
Rakotonirina as prime minister. Rakotonirina, who was in Madagascar, was subsequently arrested and accused of
coordinating anti-government protests; he was held under house arrest and later convicted and given a two-year
suspended sentence. Several other senior opposition officials were likewise detained.
12 “Madagascar Navy Troops Order Rajoelina to Leave Power in Seven Days,” Xinhua News Agency, March 21, 2009.
13 “Madagascar Opposition Calls for President’s Arrest,” Reuters, March 16, 2009.
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Security Council, and the EU formed an International Contact Group on Madagascar to provide a
unified front for international pressure on the parties to resolve the political crisis.
The U.S. State Department declared the power transfer to be a coup d’état. EU officials took a
similar stance. Foreign envoys did not attend Rajoelina’s inauguration, and few foreign
governments have recognized his administration.14 The United States has suspended all non-
humanitarian assistance, as have several other international donors, including the International
Monetary Fund (IMF), which announced a suspension of aid programs in May 2009. The World
Bank and the African Development Bank continue to provide some assistance. AU and SADC
Member States prevented Rajoelina from addressing the 64th session of the United Nations
General Assembly in September 2009. He did not attend the September 2010 session, reportedly
to avoid another confrontation with the African states.15
Since assuming office, Rajoelina has remained defiant in spite of international pressure. A
Malagasy journalist was arrested in May 2009 and charged with "inciting revolt against the
republic's institutions," defamation and disseminating false information. His radio station, Radio
Mada, was taken off the air.16 In June 2009, a Madagascar court sentenced Ravalomanana in
absentia to four years in jail and a $70 million fine for alleged abuse of office.17 Members of
SADC convened an extraordinary summit later that month and nominated the former president of
Mozambique, Joaquim Chissano, to lead a new mediation effort. Chissano convened talks
between Rajoelina, Ravalomanana, and two former Malagasy presidents, Albert Zafy and Didier
Ratsiraka, in early August in Mozambique’s capital, Maputo. On August 9, almost six months
after the political crisis began, the opposing parties signed an agreement to form an inclusive,
transitional government that would rule for up to 15 months, during which time new elections
would be held. Weeks later, Rajoelina named a new government; only two of the 31 ministers
named were considered to be critics of Rajoelina. Ravalomanana and the country’s three main
opposition parties denounced the proposed cabinet, charging that it violated the terms of the
Maputo agreement. In response, they vowed to establish a parallel government in accordance
with the framework outlined in the Maputo agreement. SADC also rejected Rajoelina’s new
government, and the AU called on the parties to adhere to the Maputo agreement.
Talks resumed in Maputo, and in October 2009 the parties announced that they had reached
agreement on posts in a new transitional government, which would be led by Andry Rajoelina
until new elections were held. Ravalomanana reportedly agreed to the arrangement on the
condition that Rajoelina would not vie for the presidency in those elections. Under the accord,
several members of Rajoelina’s administration, including his prime minister at the time, Monja
Roindefo, were replaced by consensus candidates like Eugene Mangalaza. Rajoelina subsequently
dismissed Mangalaza in December, and appointed a military officer, Brigadier General Albert
Camille Vital, to serve as his new prime minister. He pressed forth with plans for legislative
elections to be held in March 2010, but in early 2010, under international pressure, agreed to
postpone elections until later in the year.
14 Pakistan and Turkey have formally recognized the Rajoelina Administration.
15 Rajoelina was scheduled to speak on September 24, but his name was removed from the list of speakers after
representatives from the Democratic Republic of Congo, representing SADC, lodged a protest.
16 Press Release by Reporters Without Borders, “Madagascar: Detained Radio Mada Reporter is Charged And
Transferred to Prison,” May 7, 2009.
17 The $70 million fine was linked to Ravalomanana’s purchase of a presidential jet in 2008.
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The Impasse Continues
Donor pressure on Madagascar’s de facto government continued in 2010, but international
mediation efforts sputtered, with the mandate of the UN mediator ending and the AU allowing
SADC, which the HAT has viewed as biased toward Ravalomanana, to take the lead on
negotiations. The International Contact Group has not convened since early 2010.
Rajoelina and his government have continued efforts to legitimize their rule under increasing
domestic pressure.18 In April 2010, the armed forces’ chief of staff and head of the gendarmerie
made public demands for the HAT to resolve the political crisis, amid the discovery of several
reported coup plots. After several changes to the government’s proposed timetable for a
constitutional referendum and subsequent elections, and as part of new national dialogue
notionally led by civil society, the government sponsored a national conference, which led to the
adoption in November of a new constitution by national referendum. A new bicameral transitional
legislature was appointed in October, based on a political accord signed in August. The chair of
the lower chamber is a former aid of Ravalomanana, and reports suggest that the former ruling
TIM party has fragmented as international support for the former president has waned.
In early 2011, SADC resumed its mediation effort and the HAT engaged in first serious
negotiations with the other main political movements since 2009. In March 2011, a draft roadmap
to elections was presented, with eight of the 11 main political parties participating. Rajoelina
formed a new government, with three-quarters of ministerial positions held by new political
parties, some of which include former members of Ravalomanana’s party. Prime Minister Vital
resigned in March 2011, as part of the transition roadmap, but was promptly reappointed by
Rajoelina. The three former presidents have rejected the new government and called for revision
of the roadmap. Some observers increasingly blame them, along with Rajoelina, for the deadlock.
Rajoelina appears determined to vie for the presidency in the next presidential elections,
whenever they are held. The constitution adopted in November, which lowers the minimum age
limit for presidential candidates, would allow him to do so.
The Impact of the Political Crisis on the Economy
To date, the March 2011 roadmap toward elections has failed to yield significant progress toward
a transition acceptable to international donors, and the country’s economy, which had been on an
upward trajectory under President Ravalomanana, continues to struggle, based in part on a lack of
donor confidence and government legitimacy. Most analysts do not expect significant economic
recovery until after a political transition takes place. Madagascar’s economy, which had been
significantly damaged by the 2002 crisis, had recovered quickly after Ravalomanana came to
power that year, and the recovery was seen as a sign of public and foreign investor confidence in
his government. Growth was spurred, in part, by his Administration’s economic liberalization
policies. Madagascar reached the completion point under the Heavily Indebted Poor Countries
Initiative (HIPC) in 2004 and received cancellation of almost $2 billion in sovereign debt. The
Ravalomanana administration sought to diversify the country’s bilateral ties, and reduce its
reliance on traditional business partners, such as France.
18 See, e.g., International Crisis Group, “Madagascar: Crisis Heating Up?” Crisis Group Africa Report No.
166,November 18, 2010.
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Under Ravalomanana,19 Madagascar attracted several high-profile foreign investment projects,
including a titanium dioxide mine developed by Australia’s Rio Tinto estimated at over $800
million and a tar sands project by France’s Total. Several oil companies began offshore
exploration. A major investment proposal by South Korea’s Daewoo Logistics became a rallying
point for Rajoelina in late 2008. Ravalomanana critics like Rajoelina questioned the government’s
offer to Daewoo of a 99-year lease for 3.2 million acres of land for large corn and palm oil
plantations. The Ravalomanana government claimed that the projects would bring infrastructure
investments and create hundreds of jobs for Malagasy farm workers, but Rajoelina argued that the
plantations would displace too many farmers from their land. The proposed deal also raised
ethical concerns about allocating almost half of the country’s arable land for export crops while
the country continues to import rice, a basic staple of the Malagasy diet.20
Despite economic growth under Ravalomanana, the majority of Madagascar's people have
remained poor. The World Bank estimates that per capita income is only approximately $460 per
year, and the country ranks low on the U.N. Development Program’s Human Development Index.
Some of the country’s current economic challenges pre-date the 2009 political crisis. Food prices
have increased significantly since 2007, while purchasing power has decreased. Chronic food
insecurity affects over half the population. Increased global competition on world market for
Madagascar’s primary export crop, vanilla, has adversely affected Malagasy farmers in recent
years.21 The government has distributed coffee, clove, and pepper plants in an effort to diversify
cash crops. The country’s shellfish industry suffers from declining fish stocks. Madagascar’s
economy has been heavily reliant on the tourism industry, which drew an estimated $390 million
annually. The 2008-2009 global economic downturn, combined with the current political
uncertainty, has damaged the industry considerably.
The economy has declined under Andry Rajoelina and the HAT, with real GDP growth falling
from 7% in 2008 to -3.7% in 2009 and an estimated -2 % in 2010, according to the Economist
Intelligence Unit. The IMF has forecast growth of 0.6% in 2011. Tourism declined by 50% from
January 2009 to January 2010, and textile exports to the United States are down significantly (see
below).22 Tourism is further affected by an EU ban on flights by Air Madagascar, whose planes
have been deemed no longer in compliant with EU safety standards, to European destinations.
Madagascar’s dairy industry has also suffered during the political crisis. Unemployment, food
insecurity, criminality, and corruption are on the rise.23
Prior to the coup, foreign aid represented approximately 40% of the Malagasy government’s
budget and 75% of investments in public spending. Madagascar has since lost an estimated $400
million in donor support, according to the World Bank. The government continues to pay public
wages and debt payments, but public services have declined, affecting the education and health
19 Ravalomanana, 61, owns Madagascar’s largest indigenous corporation, Tiko Group, a food and retail conglomerate.
His business background is thought to have contributed significantly to his liberal economic policies and ability to
attract foreign investment, but his business interests also drew allegations of corruption and favoritism in government
deals. These allegations, combined with rising popular discontent, appear to have gradually undermined his domestic
and international legitimacy. International donors suspended over $20 million in aid disbursements in December 2008,
citing concerns over budget transparency and possible conflicts of interest in the President’s business investments. In
particular, some donors reportedly urged greater scrutiny of the mining and energy sectors.
20 Vivienne Walt, “The Breadbasket of South Korea: Madagascar,” Time, 23 November 2008.
21 The country accounts for two-thirds of the world’s vanilla exports.
22 EIU, “Madagascar Country Report,” June 2010.
23 ICG, “Madagascar: Crisis Heating Up?” op. cit.
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sectors. Social indicators have fallen. Reports suggest that the government’s control over the
armed services has also declined. Donor aid cuts have primarily affected infrastructure,
productive activities, and institutional support, the World Bank reports, while donor aid to social
sectors has actually increased since the coup, representing over $260 million in 2010, up from
$180 million in 2008.24 The effectiveness of that aid, however, has been hindered by decreased
donor coordination, among other factors, including weakened government capacity and
deteriorating infrastructure. The EU has extended its suspension of development assistance,
including budget support to the government, worth an estimated $738 million, for another year.
AU and SADC sanctions, which do not affect aid flows, include a suspension of trade benefits
and a travel ban and asset freeze on more than 100 members of the HAT. China is playing an
increasing role in the Malagasy economy, particularly in the mining sector, which has reportedly
provided Rajoelina’s government with over $100 million in budget support.25
U.S. Relations with Madagascar
The United States government does not recognize the High Transitional Authority, and it has
suspended assistance to Andre Rajoelina’s government. Previously, the United States had
maintained good diplomatic relations with the government of President Marc Ravalomanana. The
United States has supported the efforts of the United Nations, the African Union, and other
international actors to facilitate a peaceful resolution of the crisis.
Due to the unconstitutional change of power, the Obama Administration has suspended non-
humanitarian assistance to the country, including all assistance programs to the government.
Military assistance, good governance, basic education, and environmental programs have been
affected, based on legislative and policy restrictions. The State Department has requested $78.8
million in bilateral aid for Madagascar for FY2012. U.S. assistance was estimated at $91 million
in FY2010, of which over 70% went to health programs and 24% to nutrition, social protection,
sanitation, and other humanitarian aid. The majority of FY2012 assistance would continue to
focus on health programs, an area in which the United States is a leading donor. Limited
economic growth assistance is restricted to that funded through Food for Peace interventions,
which are coordinated with other donors and focus on improving rural farmers’ agricultural
productivity and food security. Despite current aid restrictions, the U.S. government continues to
participate in donor working groups on rural development and the environment, according to the
State Department. The Peace Corps, which temporarily suspended operations in 2009, currently
has over 100 volunteers working in Madagascar on education, environmental and agricultural
conservation, health, natural resource management, and business development.
Prior to March 2009, U.S. bilateral assistance to Madagascar supported democratic governance;
economic growth and socio-economic development; and environmental protection. Aid provided
by the State Department and USAID totaled almost $48 million in FY2007, $58 million in
FY2008, and an estimated $71 million in FY2009. Much of these funds were directed toward
health programs. Madagascar is a target country for the President’s Malaria Initiative, which aims
to cut malaria deaths by 50%. U.S. assistance also supported the Ravalomanana government’s
environmental preservation efforts to increase the amount of protected land from 1.7 million to 6
24 The World Bank, Madagascar Economic Update: Aid Effectiveness During Political Instability – a Look at Social
Sectors, April 1, 2011.
25 The World Bank, “Madagascar: Country Brief,” available at http://www.worldbank.org.
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million hectares from 2003 to 2008. The United States provided almost $140 million in
humanitarian aid and disaster response from FY1999 through FY2009.
The Ravalomanana government reportedly supported U.S. counterterrorism goals through law
enforcement and financial tracking cooperation, and the country received limited U.S. security
assistance focused on border and maritime security through the International Military Education
and Training (IMET) program. The State Department reports that progress on countering
terrorism stalled after the 2009 take-over by Rajoelina’s de facto government, which has
reportedly demonstrated a willingness to cooperate on law enforcement matters, but has limited
capacity. The State Department moved Madagascar from a “Tier 2” to a “Tier 2 Watch List”
country in its 2010 Trafficking in Persons Report, and to a “Tier 3” country in its 2011 report,
which makes Madagascar subject to certain sanctions. The State Department finds that
Madagascar has continued to serve as a source country for women and children subject to forced
labor and prostitution and has determined that the current government’s anti-trafficking efforts do
not meet minimum standards. Congress has expressed concern with natural resource degradation
in the country, and in 2009, the House of Representatives passed H.Res. 839, condemning the
March 2009 coup and the illegal extraction of Madagascar’s natural resources.
Madagascar signed the first Millennium Challenge Corporation (MCC) compact, worth almost
$110 million over four years, in April 2005.26 The award roughly doubled U.S. assistance to the
country. The program, developed by the Malagasy government in consultation with the public,
aimed to raise incomes nationwide by assisting the transition from subsistence agriculture to a
market economy. It complemented Madagascar’s poverty reduction strategy, which also focused
on agricultural development. MCC assistance focused on securing property rights for land,
improving citizens’ access to credit through financial sector reform, and improving agricultural
production technologies and rural market capacity. MCC operations in Madagascar were
suspended on March 20, 2009, and the compact was terminated in May 2009.27
Trade
Madagascar was eligible for preferential trade benefits under the African Growth and Opportunity
Act (AGOA), including for special apparel benefits, until December 2009, when the trade
benefits were suspended.28 The country’s nascent textile industry, which had expanded
dramatically in the last decade, has been hit hard by the suspension – more than half the
industry’s income was drawn from exports to the United States, and by some estimates over one
quarter of jobs in the country’s formal economy were dependent on AGOA exports, which, in
2008, were valued at $279 million. AGOA had helped Madagascar to increase job growth and
attract foreign investment prior to the 2009 suspension, and reports suggest that many textile
factories have had to cease operations in the past year. Malagasy apparel manufacturing exports
to the United States plummeted from almost $280 million in 2008 to $55 million in 2010, with
total Malagasy exports to the United States falling from $324 million to 108 million.
26 The MCC is an independent U.S. foreign aid agency that awards large-scale, multi-year grants to countries that pass
specific eligibility criteria based on good governance, economic freedom, and public investment criteria.
27 MCC had suspended compact programs in countries like Nicaragua after flawed elections; Madagascar’s compact is
the first to be terminated. Just under 80% of the total grant value was expended.
28 The U.S. Trade Representative first threatened in August 2009 to suspend AGOA benefits until democratic elections
were held; the State Department reissued the warning in early December 2009. Madagascar’s suspension, along with
that of Guinea and Niger, which had also suffered coups, was announced later that month.
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Figure 1. Map of Madagascar
Source: LOC
Author Contact Information
Lauren Ploch
Analyst in African Affairs
lploch@crs.loc.gov, 7-7640
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