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Madagascar: Sanctions Result in Economic Decline and Food Insecurity

In recent years Madagascar has experienced a slow, seemingly unstoppable decline of its fragile economy, that has put a strain on the lives of millions of Malagasy citizens.

After two and a half years under the administration of the transitional government of Andry Rajoelina (half a presidential mandate), the economy has been ranked worst in the world by Forbes magazine; thousands have lost their jobs and a food crisis is looming in the southern region of the country.

Food crises in the region have been recurrent over the past decade, but an independent United Nations expert has warned that the sanctions imposed on Madagascar have made the situation untenable from a food security standpoint.

Madagascar rice fields. Image by Flickr user Luc Legay (CC BY-SA 2.0).

Madagascar rice fields. Image by Flickr user Luc Legay (CC BY-SA 2.0).

A prolonged crisis

It has been 30 months since Rajoelina, a former mayor and Malagasy advertising/media mogul, took power in Madagascar by means of a military coup in 2009; this move prompted immediate sanctions from most of the international community*. These sanctions are having a disastrous impact on food security, argues Olivier De Schutter, the UN Special Rapporteur on the right to food:

“The result is that Madagascar today has one of the highest levels of child malnutrition in the world, with levels comparable to those of Afghanistan or Yemen,” he stated. [..] the decision to suspend Madagascar from the African Growth and Opportunities Act by the United States has cost at least 50,000 jobs in the textile sector, which had accounted for half of Madagascar’s exports.
In addition, the European Union has halted programmes that were ready to be signed before the political crisis, suspending all development aid channelled through the Government.

Renowned economist and aid observer at Aid Watchers, William Easterly, argued similarly a year ago about the sanctions affecting the poor and missing their intended targets, the people in power:

Multiple critics have protested ever since the US government, hoping to force President Andry Rajoelina’s questionable government to hold elections, first threatened to remove preferential trading rights for Madagascar.
The Malagasy textile industry was a clear success story of the US African Growth and Opportunity Act (AGOA), which removed US quotas and duties from thousands of products from eligible African countries. Madagascar’s exports tripled in the first three years of the program, and the textile sector, which made up 60 percent of Malagasy exports, accounted directly for 50,000 jobs and indirectly at least 100,000 more. [..]
Now we are starting to see the effects in the formal and informal economy:
Factories closing and factory jobs lost: “factories are laying off workers and we are seeing an explosion in the numbers of unemployed,” [..]
‘I used to be able to earn 20,000 ariary ($9.30) a day,’ said Soloniaina Rasoarimanana, who has been selling clothes from a pavement stall for 10 years. ‘Now, with the political crisis and more competition, I earn around 5,000 ariary ($2.30) a day.’” [..]
Among the effects we are NOT seeing: signs of increased interest in arriving at a power-sharing agreement or instating democratic governance on the part of Rajoelina’s government.

Malagasy blogger Ndimby adds to the list of detrimental effect of the sanctions [fr]:

De plus, les entreprises sont asphyxiées par la crise, mais aussi par des « redressements d’office » imposés par le Fisc, mais qui semblent plus tenir de la roulette russe que d’une quelconque rationalité.
La paupérisation de la population est une réalité, et les victimes se lancent dans l’informel pour joindre les deux bouts. Cela se voit dans les rues, où les vendeurs sont de plus en plus nombreux. Et cela se voit dans les journaux, où des « salons de massage » en nombre croissant proposent leurs services tout en résorbant le chômage féminin.

Moreover, many companies are suffocating because of the crisis but also because of alleged “tax recovery measures” by the administration that seems to obey a Russian roulette logic rather than an actual rational justification. [Note: The "tax recovery measures" are a well-known scheme that aim to punish companies that are not favoured by the government] The impoverishment of the general population is a reality and its victims are forced into the informal sector to make ends meet. The increase in street vendors is the first evidence of that. The second evidence is the increase in the newspapers of advertisement for “massage parlors” that offers all kinds of services, which do their bit to reduce female unemployment.

Increasing prostitution has been documented in detail by IRIN News, which has shown an important increase in young girls trying to pay for school fees. The testimony below of Nadine, 16, tells of her daily life:

[Nadine's ambition] is to open a clothes boutique after completing a college course in textile design, but in the meantime, along with eight of her friends, she has turned to sex work to pay her tuition fees. Charging up to US$7 a time, she works in the poor Antananarivo suburb of 67 Hectares. [..] “Most of them [my friends] are like me; they are looking after their parents [through sex work]”, she said. [..] Miroarisoa Rakotoarivelo, head of the Groupe Développement Madagascar, said a recent survey of 129 sex workers indicated a growing number of children among them. “It’s increased, and the proof I can give you is the January-April 2011 statistics we’ve got,” she told IRIN, adding that almost half of the sex workers sampled were under 18.

Any solutions on the horizon?

The transitional government was set up to prepare for transparent elections. It has been two years now and a definite deadline is yet to be settled for the electoral calendar. Rivonala Razafison states that:

The mediation team insists that the polls cannot go ahead since President Andry Rajoelina's administration is yet to implement conditions set out in a political roadmap that SADC submitted early this year to end the country's political crisis. The roadmap presented by SADC mediator Leonardo Simao recommended the departure from office of anyone intending to vie in the elections. This rubbed Mr Rajoelina the wrong way [..] He claims that the earlier roadmap was already in effect, thus other conditions should not be added. In November, the country approved a new constitution that lowered the minimum age limit for a presidential candidate, allowing the incumbent, now 36, to run.

A solution is yet to be found from an economic standpoint as well. Even more worrisome, land deals that were a trigger point for overthrowing former president Ravalomanana are now back in full force, as the government has leased out lands for 50 years to India at $15 per acre per year.

Land deals are at the center of Malagasy citizens’ worries, as evictions of farmers from arable lands are on the rise.

Famed singer Bekoto and activist for the cause of Malagasy farmers has proposed a new paradigm to address the plight of the farmers [fr]. He argues that new technologies ought to be used by farmers to inform the media of forced evictions from their lands by the authorities and as a negotiation tool for their rights to access food and work the lands they live on.

De Schutter suggests that a solution to the food crisis can be found locally:

We know that the system of intensive rice cultivation, a pure Malagasy invention, allows to double, triple or even quadruple yields.
[...]
A national strategy to support this type of ecological production could make the large island self-sufficient in rice in thee years.

On the political side, Ndimby argues that only elections can provide an exit to the crisis and the alleviation of the economic sanctions. He adds that a firm single presidential mandate [fr] needs to be added to the conditions for the upcoming elections. This would help ensure that the elections will provide the concrete basis for a sustainable democracy.

 

*Addendum: As described in Global Voices at length in previous articles, the undemocratic power seizure by Andry Rajoelina is the direct cause of the withdrawal of AGOA and MCA agreements in Madagascar. It is important to note that the direct  US aid in Madagascar has increased ($85 million USD  in 2010) and tops contribution for any other country.  Only non-humanitarian assistance and direct assistance to the Government of Madagascar have been suspended by the US government.

  • http://www.solanasaurus.com/ Solana Larsen

    I would be really interested to hear more about the land deals and evictions.

    • http://rakotomalala.blogspot.com/ Lova Rakotomalala

      Hello Solana,

      Land deals along with illegal logging are definitely top among the sensitive subjects in Madagascar. The legislation and how it can be enforced is too often unclear. We’ ll look at unpacking the current situation some more in subsequent updates.

  • Todd

    How much of the current economic problems are due to previous political problems and poor agricultural methods that turned Madagascar into a net importer of food rather than an exporter? Didn’t foreign investment dry up after concerns about political transition 10 years ago, about the same time inflation went dramatically up? Sanctions are easy to malign, but how much, compared to the local decisions, are they affecting the economy?

    • http://rakotomalala.blogspot.com/ Lova Rakotomalala

      Hello Todd,

      Thank you for asking these important questions. It also provides an opportunity to clarify important points.

      1) Madagascar’s economic problems are for the most part self-inflicted. No countries should be relying so heavily on foreign contribution to function. More specifically, Madagascar’s leadership are to be blamed for the current increasing hardships of the population. They cannot show a legitimate political mandate to be leading the country (hence the sanctions) and have poorly managed the assets that were gained during the more favorable periods.

      2) The second point of argument is whether development can be sustained over the long term when it is carried on by such an heavy influx of foreign aid to start with. Some in the government claimed that sanctions were an opportunity for Madagascar to prove they can do without foreign aid. So far, they have not shown that. So one would have to look at additional case studies to assess the efficiency of aid in producing development over the long run.

  • Shoshiety

    Thanks for clarifying this, Lova. Can you share some links to case studies the sustainability and/or operation of foreign aid organizations and NGOs (other than USAID), authored by third parties?

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