Madagascar 

Madagascar country policy

Policy established 07 June 2010

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Country class: 6

Madagascar country facts

Atradius Dutch State Business Economic Research 

Country Report last updated :  May 25, 2010   
Country :  MADAGASCAR

Political Situation 

Unstable

Head of state
Interim president Andry Rajoelina (since March 2009, self-declared); PM T.J. Ort (since December 2009).

Form of government
Andry Rajoelina has deposed former democratically elected president Ravolomanana after violent protests in March 2009.

Internal Economic Situation
Economic Contraction

General situation
Overall  level of development is still very low. Economy is very dependant on agriculture (vanilla), mining (titanium, gems), textile industry (dependant on AGOA preferential trade agreements) and increasingly eco-tourism. Economic growth was structurally high sinsce 2003 due to structural reform and foreign investment. The global recession and political instability has affected the economy. The economy shows contraction for three consecutive years. Inflation continues to be high at 9%.

External Economic Situation
Rapidly Rising Foreign Debt

Main sources of foreign exchange
Fish and seafood, textiles and apparel, vanilla, coffee.

Main foreign markets
EU (50%), France 38%, Germany 11%), USA (37%).

Main expenses of foreign exchange
Capital goods, raw materials, consumer goods, fuels.

Balance of payments
The uncertain policies of the Rajoelina governments and incident of expropriation are expected to have curved capital inflows. Textile exports to the US have grown rapidly in recent years thanks to AGOA (African Growth and Opportunity Act). Export Processing Zone is main source of export