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Madagascar: South Korean Land Deal Sparks Controversy

South Korea has just leased half of all the arable land in Madagascar according to the Financial Times. This has stirred quite a debate in the Malagasy blogosphere about land sovereignty and economic development. It is still unclear whether the land deal has actually been signed by both parties. Meanwhile, bloggers are arguing whether this sort of deal should be considered “neo-colonialism”.

Here is an overview of what is know so far.

On November 19, the Financial Times reported on the deal between South Korean company Daewoo Logistics and the Malagasy government.

On the Global Dashboard blog, Alex Evans summarizes the findings:

South Korea has just struck a 99 year deal with Madagascar to lease an area half the size of Belgium to grow palm oil and no less than half of South Korea’s corn demands [..] Carl Atkins, of consultants Bidwells Agribusiness, said Daewoo Logistics’ investment in Madagascar was the largest it had seen. “The project does not surprise me, as countries are looking to improve food security but its size it does surprise me.”

A few hours later, a follow-up article in the Financial Times added that Daewoo Logistics would not have to pay fees for the lease, but would instead provide the means to allow exploitation and development of the land.

Alex Evans, quoting from the second article, says it's even worse news than he thought:

A few hours later, a truly astonishing new angle on the story emerged. Guess how much South Korea had paid for its 99 year lease? Answer: Zip. Zero. Nada. Not a cent. The sum total of the benefits for Madagascar, according to a Daewoo spokesman? “We will provide jobs for them by farming it, which is good for Madagascar.” This in a country where 3.5% of people are on WFP food aid…
The benefits for South Korea, on the other hand:
“We want to plant corn there to ensure our food security. Food can be a weapon in this world,” said Hong Jong-wan, a manager at Daewoo. “We can either export the harvests to other countries or ship them back to Korea in case of a food crisis.”


Photo by Foko-Madagascar

The Malagasy government has yet to release an official statement on the issue. Reuters reports that the deal is far from being finalized. Daewoo Logistics, however, has issued several statements that contest the veracity of the articles.

Robert Koelher, blogging from Seoul at The Marmot’s Hole, explains the points of contentions from the South Korean company:

In another report, the Maeil Gyeongje said experts believe the FT report, with its provocative talk of “neo-colonialism” and “pirates,” was intended as a warning against an increased Asian presence in Africa, long considered Europe’s backyard. The piece did include a quote from a Daewoo Logistics official, however, who said Madagascar was quite sensitive about this issue because when China invests, it only goes after its own profits [..]
The JoongAng Ilbo, meanwhile, released an editorial blasting the FT, asking why the paper was turning a blind eye to British Jatropha farms in Madagascar (used for biodiesel fuel) and French plantations on the island while going after a Korean company only. And besides, the land Daewoo is acquiring is undeveloped, the new farms will provide employment, and the Madagascar government will be taking a 30% cut of the farm profits in taxes.”

Reactions to news of the land deal were heated and diverse in the Malagasy blogosphere:

The Malagasy diaspora website Sobika reported on the deal (Fr) moments after the Financial Times and asked their readers to react. Over 100 comments were posted on the articles within a few days. In a follow-up article, Sokiba speculates that the outrage expressed on the internet has led the company deny the conditions of the deal [Fr].

The outrage is far from being unanimous though. Some bloggers feel that the land deal could benefit Madagascar by increasing productivity on parts of the land. Aiky on the community blog Malagasy Miray adds [Mg]:

Ny tombontsoa indray kosa raha jerena amin’ny saina tsy miangatra dia :
- ny fanomezana asa ireo tantsaha eny ambanivohitra ka miteraka fidiram-bola maharitra ho azy ireo izany.
- ny fanajariana ireo tany izay tsy noeritreretina fa afaka ambolena na ihany koa tany ngazana ka rahatrizay vita ny fifanarahana izany hoe afaka zato taona dia mba ho moramora ho an’ireo taranaka fara aman-dimby ny hampiasa sy hamboly azy (raha tsy lasa fanan’olom-bitsy indray avy eo)
- raha misy fidiram-bola maharitra ireo tantsaha dia mety ho hita ihany koa ny fiatraikan’izany ka mahasoa ho an’ny manodidina na “effet d’entraînement”. [...]
-Asa na tafiditra ao anaty fifanarahana fa mety hihatsara ihany koa ireo lalana sy tambanjotra misy any amin’ireo faritra.
- afaka mifehy ny fiakarana an-tanandehibe ny mpitondra raha misy asa eny ambanivohitra (maîtrise de l’exode rural)

The advantages as seen from a less emotional perspective:
- The new employment prospects for the farmers which in turn would lead to additional source of revenues.
- The exploitation of lands that were thought to be of little value and that could be still exploited after the lease.
- the chain reaction from such increase in revenues [..]
- the potential improvement in the status of the national roads and other facilities in that part of the country.
- A possible incentive to stop the exodus from the rural areas

On The Cyber Observer, a lawyer and blogger in Antananarivo, Andrydago, had the the amazing foresight to raise the legal issue of the sovereignty of land and foreign investment in October, a full month before this controversy. It is striking that the laws that make this lease permissible were amended earlier this year:

Recently, the new Malagasy investment law: act 2007-036 of January 14th, 2008, has brought a very key change concerning the possibility for foreigners to own their land in Madagascar. This law provided that foreign companies or foreign investors (individuals who have been granted with investor visa), can buy Malagasy land under the following conditions:

1. the land has to be used exclusively for professional exploitation. Any personal use and exploitation which is different from the nature of exploitation he “promised” to the Malagasy governement, are forbidden. If there is a breach of such condition, the governement can legally withdraw its title of land ownership;

2. the foreign company or investor has to submit its business plan (investment planning in Madagascar) to a public body named EDBM (Economic Development Board Madagascar). Such plan has to describe and detail its intended business and its pertaining investment in Madagascar;

3. the foreign company or investor has to apply for a formal approval named “authorization for land acquisition” before the EDBM in order to be allowed to purchase legally a Malagasy land. Such authorization if granted, gives to the foreign company or investor the same rights as for a Malagasy entity to purchase and to own land in Madagascar.

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