Transformationsindex 2016 - Transformation Index 2016

BTI 2014 | Madagascar Country Report
Status Index
# 103 of 129
Political Transformation
# 89 of 129
Economic Transformation
# 102 of 129
Management Index
# 109 of 129
This report is part of the Bertelsmann Stiftung’s Transformation Index (BTI)
2014. It covers the period from 31 January 2011 to 31 January 2013. The BTI
assesses the transformation toward democracy and a market economy as well
as the quality of political management in 129 countries. More on the BTI at
Please cite as follows: Bertelsmann Stiftung, BTI 2014 — Madagascar Country
Report. Gütersloh: Bertelsmann Stiftung, 2014.
This work is licensed under a Creative Commons Attribution 4.0 International
BTI 2014 | Madagascar
Key Indicators
Pop. growth1
% p.a.
Life expectancy
UN Education Index
Gender inequality2
Urban population %
HDI rank of 187
GDP p.c.
Gini Index
Aid per capita $
Sources: The World Bank, World Development Indicators 2013 | UNDP, Human Development Report 2013. Footnotes:
(1) Average annual growth rate. (2) Gender Inequality Index (GII). (3) Percentage of population living on less than $2 a
Executive Summary
The 2009 – 2013 period in Madagascar saw the longest political conflict in a country with a history
of significant political conflict. Democratic institutions have been in place for two decades, but
they have continued to lack the strength to channel political forces into a competitive process. As
a result, challengers to the status quo have exited the constitutional process and relied upon social
movements and para-governmental support to establish their political viability. Democracy
remains the only game in town, but the rules of play are being constantly changed by embedded
political actors atop competitive and often predatory political networks.
The 2009 overthrow of Marc Ravalomanana was military-driven and normatively reprehensible,
but it reflected structural concerns. The government’s approach to land tenure, extractive
resources, contracting, and private sector relationships were publicly challenged even while
donors started to question transparency and accountability. Madagascar went from a flawed
democracy with a near-imperial presidency to an autocracy with rent-seeking tendencies.
Since 2011, economic management has been surprisingly strong. Performance across most major
indicators has been relatively constant even while many other countries resorted to fiscal measures
or monetary policy that hobbled prospects for years to come. Rather than borrowing, pegging the
exchange rate or the like, the country embarked on austerity measures that crushed key sectors and
undermined social services and the small social safety net, but kept the government fiscally
Popular unrest was limited in the 2011 – 2013 period, replaced with a popular disquietude and
general malaise. Opinion in the capital shifted from a decision between two Merina houses
(Presidents Ravalomanana and Rajoelina) to a rejection of both and a splintering of popular
support. Meanwhile, the High Transitional Authority (Haute Autorité de la Transition, HAT) of
Andry Rajoelina, once a broad political net, shrunk to an intimate base. Extractive industries,
already on the rise, became a significant source of revenue and are now poised to grow
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substantially in the coming years, dwarfing all other income-generating sectors. With clear losses
in government oversight and regulatory capacity, rent-seeking became apparent not only in high
production sectors such as extractive resources, but in social sectors, infrastructure and elsewhere
as the public-private fusion that emerged under Ravalomanana took on new, often more insidious,
The 17 September 2011 Road Map of the Southern African Development Community-led
mediation team rejected the previous approach that focused on the four living heads of state and
instead centered on Ravalomanana, Rajoelina, diverse smaller parties and a coalition of civil
society leaders. There were key factors left unaddressed, including the question of amnesty for
President Ravalomanana, and it was seen by many as a capitulation to an autocrat who came to
power through force, as Rajoelina was left as head of state for the transition. Nonetheless, it paved
a way forward. In 2012, the World Bank, the country’s largest donor, released an Interim Strategy
that clearly signaled a scaling up in 2013. Other donors appear to be following suit. A U.N.-led,
World Bank-supported electoral census was completed, the electoral code was revised, and
elections finally appeared possible. In December 2012, Marc Ravalomanana announced he would
not stand in the 2013 elections. Rajoelina followed suit. This commitment from the conflict
protagonists appears to have finally given hope to a country that is suffering from a profound
History and Characteristics of Transformation
While many African states were created by colonial forces, modern Madagascar began with the
Merina King Andrianampoinimerina (1787 – 1810), who began the process of taking control of
the highlands first through the twelve sacred hills of Imerina and then towards the coasts. By the
time the French deposed the monarchy in 1897, it controlled nearly the entire territory, and the
colonial power had merely to take advantage of the administrative system in place. The brutal
Merina system of slavery was abolished, but the caste system was adopted in order to develop a
new plantation system. Even the system of taxation established by the Merina monarchy was
maintained in order to pay for labor and infrastructure development. The Malagasy uprising of
1947 was one of the most violent anywhere in the colonial world, with an estimated 100,000 losing
their lives, but it helped bring about the French Loi Cadre of 1956 and, ultimately, the move to an
independent Madagascar on 26 June 1960.
The importance of this history is that two centuries of Merina privilege have led to a capital
established in the heart of feudal Merina lands, a cadre of “big families” that have had critical
sway in Malagasy political and economic decision-making, and a distinct Merina advantage in
both education and market access. Merina dispersed throughout the regions commonly play
critical roles in government, education or business rather than tenant farming or other activities
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common to migrant groups. Peoples of other regions and ethnicities are largely outside of these
network exchanges, but engage political and economic entrepreneurialism in other ways.
The president of Madagascar’s First Republic (1960 – 1972), Philibert Tsiranana, is largely viewed
as having remained too close to France. Social movements in the capital led to a peaceful handover
to a succession of four military leaders. The last of these, Vice Admiral Didier Ratsiraka, adopted
a particular brand of scientific socialism in 1975. By 1979, poor economic decisions led to a
complete depletion of foreign reserves. Ratsiraka called on the IMF and adopted a market-oriented
economy that remains in place today.
Political change came in the form of a civil servants’ strike that led to the establishment of a
transitional government on 31 October 1991. A new constitution was ratified a few months later,
and the country’s first nominally democratic elections were held in November 1992, bringing
Albert Zafy to office. The Zafy period was marked by economic decline, and he was impeached
on 26 July 1996 after manipulating a constitutional change and being charged with corruption and
abuse of power. The 1996 election was an exercise in banality, with the choice between the
disgraced Zafy, the technocratic interim president Norbert Ratsirahonana, and Didier Ratsiraka
running as a new kind of democrat. Ratsiraka won, changed the constitution through popular
referendum, and set out to consolidate much of the character of the Second Republic.
The 2001 electoral cycle began with Zafy and Ratsiraka again looking towards the presidency, but
the stage was set for a newcomer. Marc Ravalomanana, the popular mayor of Antananarivo and a
self-made millionaire, received a majority vote in all but one part of the country (the powerbase
of his competitor, Didier Ratsiraka), largely because it was hoped that he could use his market
skills to aid development of the country. His victory after six months of social conflict was a
significant challenge to the popular notion that a Merina couldn’t be president. It was a hallmark
of a period of ethnic fluidity and growing tolerance. At the time of his overthrow, in March 2009,
there was much public consternation that the military had moved to galvanize support for another
Merina leader, Andry Rajoelina. Looking towards the 2013 elections, ethnic difference is unlikely
to play a role, except in the case of anti-Merina sentiment stemming from a popular view that the
country fell down a rabbit hole due to intra-Merina conflict.
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The BTI combines text analysis and numerical assessments. The score for each
question is provided below its respective title. The scale ranges from 1 (worst) to
10 (best).
Transformation Status
I. Political Transformation
1 | Stateness
The roots of the modern state of Madagascar lie in the precolonial monarchy of the
late 18th century. Through the 19th century, the ethnically Merina monarchy of the
central highlands spread throughout the island, diminishing or eliminating competing
monarchal structures. French rule (1896 – 1960) further consolidated the central
power of the state. As a result, state power in Madagascar and the sense of stateness
have been strong in comparison to the country’s continental counterparts.
Nonetheless, periods of political tumult have eroded the capacity of the state to
effectively govern parts of the territory. When transitional President Andry Rajoelina
took over after the military overthrow of President Marc Ravalomanana in 2009, he
did so with a broad base of support. A year later, he began consolidating his base,
using the military as a bulwark at the expense of inclusiveness. Factionalism began
to grow with an increasing number of local militias established to protect order.
Monopoly on the
use of force
There are, nominally, 18 “tribes” in Madagascar, but these were French political
creations as part of colonial Governor Joseph Gallieni’s “politiques des races.” The
degree to which these identities have taken root varies, but other regional identities,
such as kinship, universally take precedence. There are significant regional cleavages
on political, economic, resource and identity lines. However, the localization and
relative fluidity of identity have made it possible for most people to embrace multiple
identities. The unifying sense of national identity – of being “Malagasy” – is strong.
State identity
There is one Malagasy language spoken throughout the island, but dialects vary
significantly. Most political analyses point to a division between the Merina of the
capital region and the “côtiers,” an aggregation of coastal ethnicities. The competition
and at times conflict have been high, but it is nonetheless almost universally viewed
as a conflict amongst Malagasy groups sharing a common Malagasy identity.
The vast majority of Malagasy are Christian, nearly evenly divided between Catholics
and Protestants. More than half are syncretic, blending these practices of faith with
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traditional practices revolving largely around the role of ancestors. While religion has
fueled political difference, it is not bound to particularly geographies and has not
served to undermine Malagasy identity.
There is a politics of difference when it comes to the role of religion in Madagascar.
The Council of Christian Churches in Madagascar (Fiombonan’ny Fiangonana
Kristianina eto Madagasikara, FFKM) has, historically, played a critical political role.
The FFKM is comprised of the various Christian denominations, most notably the
Protestant Church of Jesus Christ in Madagascar (Fiangonan’i Jesoa Kristy eto
Madagasikara, FJKM), the Catholic Apostolic Church of Rome (Eglizy Katolika
Apostolika Romana, EKAR), the Malagasy Lutheran Church (Fiangonana Loterana
Malagasy, FLM), and the Malagasy Episcopal Church (Eklesia Episkopaly
Malagasy, EEM). The Catholicism of President Didier Ratsiraka’s Second Republic
(1975 – 1992) was challenged by the FJKM, and the FFKM played a significant role
in the transition to the democratic constitution of the Third Republic. The FFKM is
also viewed as playing an important role in bringing President Marc Ravalomanana
(2002 – 2009) to power. Ravalomanana was a lay leader in the FJKM, and started the
day with mandatory prayer for statehouse workers. In the aftermath of the 2009
political violence, Protestant FJKM leaders came under attack and at times were even
assaulted, yet most of all the FFKM will be remembered for its failure to provide a
path out of the political debacle that continues to torment the country. Despite the
significant political role of and expectations on religious groups, religious dogma has
not significantly permeated politics. Laws regulating abortion, intermarriage,
divorce, burial and other critical socio-political issues have passed after largely
secular debate.
No interference of
religious dogmas
During the first mandate of President Marc Ravalomanana (2002 – 2006), there were
significant internal and donor investments in state administrative process. Donors
funded teams to help the government realign and retool diverse ministries. Key social
sectors, including health and education, saw significant technical reform effort with
the express purpose of increasing functionality of state-led service delivery. Yet
Madagascar has unusually high levels of fiscal centrality. There is a low income tax
rate, a 21% capital gains tax, and other individual taxes. The legal infrastructure is
strong but state capacity to enforce individual taxation, particularly amongst the
majority rural population, is weak. The majority of tax revenues come from central
taxation such as import taxes, corporate taxes and value added tax.
With the overthrow of President Ravalomanana in 2009, the new Rajoelina
administration focused its efforts only on select sectors. As the World Bank’s Country
Policy and Institutional Assessment (CPIA) indicates, macroeconomic management,
social inclusion, budgetary and financial management, social protection, structural
policies, and transparency and accountability have all declined. The slow but steady
loss of state capacity to administer across sectors has led to increased local and
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community efforts in some areas such as schools, security militias, transportation and
water management.
2 | Political Participation
With the founding of the Third Republic in 1992, Madagascar embarked on a
regularized period of elections, parallel to those taking place on the African continent
and around the world. This has included local (mayoral), legislative and presidential
electoral processes, as well as referenda, mostly held in a timely fashion. Yet in all
cases the legislative elections have served as a tool for ratifying the near-imperial
president and his party rather than creating a balance of powers. The most recent
presidential elections were in 2006 and the most recent legislative elections were in
2007. The 2006 presidential elections were perceived by the population to be highly
flawed. President Ravalomanana successfully pushed back against significant
international and domestic pressure to reform a multi-ballot system that decreased
transparency and exacerbated regional cleavages. The 2007 legislative elections were
called in haste by the president in an unusual procedural move to dissolve the
National Assembly, which his own Tiako i Madagasikara (TIM) party controlled. He
did this in order to purge elements in his own party seeking to create a national
platform that might ultimately challenge his authority.
Andry Rajoelina, a young entrepreneur, came to power after a unit of the military
successfully ousted Ravalomanana. The lion’s share of the peace negotiations,
sponsored by the African Union and Southern African Development Community
(SADC) with United Nations support, have focused on the restoration of an electoral
timetable. The peace process focused largely on the four living current and former
heads of state: Andry Rajoelina, Marc Ravalomanana, Didier Ratsiraka and Albert
Zafy. This “four movements” approach led only to increased rancor and distrust. In
Madagascar, the question began to be asked: Why is this an international process
rather than a Malagasy one? Other Malagasy interlocutors, such as civil society, the
military, business interests and the other 150 or so political parties, did not have a
voice. A coalition of civil society groups – the National Coordination of Civil Society
Organizations (Coordination Nationale des Organisations de la Société Civile,
CNOSC) – began gaining traction in 2011, launching a new initiative aimed at
promoting a local solution. It ultimately won SADC backing.
A road map was signed on 17 September 2011 between the major political
movements and the CNOSC. Unfortunately, key terms of the road map, including the
right of Marc Ravalomanana to return to Madagascar without fear of prosecution,
were left vague and became problems nearly as the soon as the ink dried.
Concurrently, a disagreement between the International Francophone Organization
(Organisation internationale de la Francophonie, OIF) and the U.N. clouded the
timetable according to which Madagascar could successfully hold elections.
Free and fair
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Elections were scheduled for spring 2012 and then fall 2012. At the time of writing,
they still have yet to take place.
There have been significant reforms to the capacity and structure of elections in
Madagascar. Law number 2012-004 of 1 February 2012 created a new Independent
National Electoral Commission for Transition (Commission Electorale Nationale
Indépendante pour la Transition, CENI-T). Electoral law also changed the process of
voting to a single-ballot system and reduced some of the economic barriers to
In December 2012, former President Ravalomanana announced he would not run in
upcoming presidential elections. President Rajoelina followed some time later with
the same announcement. The commitment from both politicians not to run has
brought about a renewed sense of optimism that the electoral impasse will soon be
resolved. The presidential elections were scheduled for May 2013, but were
postponed to July 2013.
At its zenith, a democratically elected presidency in Madagascar was tremendously
strong both formally and informally. Formally, the rights and decision-making power
of the president enshrined in the constitutions of the Third Republic (1992 – 2010)
were significant compared to other semi-presidential systems. Informally, presidents
have consistently maintained significant networks of power outside of the formal
sphere, empowering select business elites, established families and others – even over
other elected officials. The organizational capacity for elections, and democratic
institutions themselves, were significantly undermined by the March 2009 overthrow
of the elected Ravalomanana government. The constitution of the Fourth Republic
(2010 – present) if anything increases formal presidential power, and an ongoing
crisis forestalling elections has nurtured the growth of informal expressions of power.
Effective power to
The successive constitutions of the Third Republic and the constitution of the Fourth
Republic all clearly articulate guarantees of freedom of association and assembly.
Political parties are also assured as evidenced by the significant proliferation of
registered parties. However, a law passed in January 2009 imposes significant
requirements on parties. To be registered, they must have representation in 12 regions
within the first 30 months of their creation, participate in at least three consecutive
elections and hold regular national meetings. While consistent with a system of
proportional representation, the law is seen as advantaging urban areas, particularly
the capital region, due to the logistics and cost associated with meeting the terms.
Association /
assembly rights
As a general rule, political groups can associate freely. However, there are significant
points where this has come into question. Today that space to freely assemble has
grown smaller. The constitutional and legal guarantees remain, but obtaining a permit
and holding unfettered events have become more difficult.
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By contrast, associational life at the community level thrives, particularly in rural
areas where the majority of the population lives. There are significant numbers of
agricultural associations, herding associations, rule-making associations,
environment and natural resource organizations and the like; they just rarely hold
political power above the local level. These community associations generally remain
free from unwarranted state interference in their affairs. There is evidence that such
groups are proliferating in the increasing absence of state assertions of power.
Security groups, educational associations and even health clinics have grown to fill
the void.
The Malagasy constitution has consistently guaranteed freedom of expression,
though the laws governing the freedom of expression are relatively convoluted and
weak. In practice, the press has published freely, but it often comes under attack for
doing so. A decade ago, just as the new government of President Ravalomanana was
taking root, Reporters Without Borders (RWB) cited the ongoing impact of the 2002
crisis on new media, citing everything from intimidation to physical attacks on
reporters. As the years wore on, RWB cited the use of the press by Malagasy
politicians as a political weapon. There was a significant downturn in freedom of
expression after March 2009. A 2010 RWB report cites the increasing polarization,
harassment and self-censorship of the Malagasy press. This is an ongoing and
significant challenge. At its root is the significant alignment between political and
media interests. President Ravalomanana and his family privately owned the largest
media network in the country (radio, television and newspapers), and there was fluid
movement between corporate management in the media empire and government
positions. The then-largest newspaper, Midi Madagasikara, was managed by a close
associate. The 2009 conflict was sparked when, in December 2008, the
Ravalomanana government shut down the radio and television transmissions of the
stations owned by Rajoelina. Looking ahead, some of the leading candidates for the
Malagasy presidency, should elections indeed take place in 2013, already have
significant media investments.
Freedom of
3 | Rule of Law
Madagascar has a semi-presidential system. Beyond informal or network
considerations, there are an unusually high number of specifically constitutional
powers the president has long enjoyed. While the 1992 constitution significantly
limited presidential power, the revisions of 1995, 1998 and 2007 reversed that.
The November 2010 constitution identifies several key oversight institutions, but
their constitutional mandates do not appear to safeguard the independence of their
Separation of
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Under Article 80, the president of the republic has the sole authority to convene an
extraordinary session of the legislature. Rather than a third of seats in the Senate, the
president, under Article 85, appoints half the seats. The president can propose
referenda without check from the legislature or judiciary (Article 164). As in the
current constitution, the president can be impeached (Article 50). Veto overrides are
left unclear while (Article 63) the president reserves the right to force the parliament
to re-deliberate on laws. The president retains the right to dissolve the assemblies
(Article 64) – he must consult with the presidents of the assemblies and the Circle for
the Preservation of the Fihavanana (Cercle de Préservation du Fihavanana), but the
consultations are nonbinding. The president maintains the power to proclaim an
“exceptional situation” (Article 65) giving him emergency powers, but the term is to
be set by law.
Since there have been no legislative elections since the National Assembly was
dissolved in 2009, its role is not relevant. The legislature is historically dominated by
the president’s party, and we should expect that to continue to be the case for the next
round of elections, whenever they materialize. Informally, legislatures often
complain that bills require executive vetting even to make it to the assembly floor,
and that other bills appear in the legislature having been written in the executive.
Madagascar has a juridical system with a clear articulation of powers for the judicial
branch and clear articulation of relationships between courts across levels. There is a
network of institutions including Administrative and Financial Constitutional Court,
Supreme Court, Courts of Appeal, Tribunals, and a High Constitutional Court. The
High Constitutional Court (HCC), the highest court, is the institution in charge of the
state. The HCC has enjoyed extreme membership stability, with the same group of
justices ratifying President Ravalomanana’s ascension in 2002 and his ouster in 2009.
While stability has its merits, it has come at the expense of judicial independence:
Justices have almost systematically sided with the executive.
At a local level, the court system is represented through local tribunals. Legally,
tribunals are open to all petitions including those against the state. In practice, that is
hindered by insufficient legal knowledge by the citizenry, particularly in rural areas.
Tribunals require court fees many Malagasy cannot afford to pay, and they are
chronically underfunded and understaffed. The backlog in many tribunals is
significant enough to create discrepancies between the types of cases they will hear,
and in many cases low-level corruption is required to have a case heard. In some
areas, such as the vanilla regions of the northeast, where illicit forestry has been a
significant concern since 2009, regional elites have had success influencing the
priorities of the burdened courts.
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While the juridical structure is relatively sound in writing, in practice it is subservient
to political and economic exigencies. This is, in part, why Madagascar ranks 49th out
of 52 African countries in the Ibrahim Index on Rule of Law.
Madagascar has an institutionalized anticorruption program. Under Articles 2 and 3
of Decree No. 2004-937 of 5 October 2004, the Independent National AntiCorruption Bureau (Bureau indépendant anti-corruption, BIANCO) is charged with
leading the implementation of the National Strategy for the Fight against Corruption
(Stratégie Nationale de Lutte contre la Corruption, SNLCC). While this includes a
public education component, the primary focus of the organization is to hold public
officeholders accountable. Since 21 March 2006, the Committee for the Safeguarding
of Integrity and its advisory committees have shared the responsibility of setting
policy against corruption.
Prosecution of
office abuse
BIANCO’s leadership has consistently been independent of the government, but its
capacity to perform its functions has never been fully realized. Key sectors of
concern, such as mining and illicit forestry, are beyond its capacity, and public
officials have commonly served as interlocutors for private-sector exploitation.
Perhaps more alarming, BIANCO has become increasingly subject to political
pressure. The executive commonly stymies information flows to BIANCO. There are
no cases of high officials having a dossier transmitted for investigation, let alone
facing a trial. Some BIANCO officials have argued that while there is good internal
integrity and accountability, there is also insufficient transparency. Externally, the
juridical system is opaque, making it difficult for BIANCO to carry out its primary
function even when funds are available.
During the 2002 – 2006 period, Madagascar enjoyed renewed civil rights with nonstate actors operating with relative freedom from persecution. The government
allowed strikes, work stoppages, and social disruption, which was caused largely by
the high rate of inflation. Workers continued to enjoy the right to join unions. By
2008, political rights began to slide. There were renewed concerns that the successful
April 2007 constitutional referendum effectively increased presidential power, and
that the increase of seats for the president’s TIM party in the 2007 National Assembly
was achieved largely through political gamesmanship.
As of March 2009, Madagascar no longer had a democratically elected government.
Charismatic authority began to reign over the rule of law, and the outlets for public
voice were obstructed. On 7 February 2009, the presidential guard of Marc
Ravalomanana opened fire on unarmed demonstrators, killing dozens. This proved a
watershed moment in the state’s patience with civil rights that challenge the status
quo. While there have been no large massacres in the country, the Rajoelina period
has been marked by low-grade unrest, with an estimated 150 to 300 deaths
nationwide. Unlawful killings and detentions have risen even while the 2010
Civil rights
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constitution reaffirmed sweeping civil and political rights. Since 2009, political rights
have been curtailed, and Madagascar belongs more and more to the category of
authoritarian regimes.
4 | Stability of Democratic Institutions
National-level government institutions including the presidency, the National
Assembly and the Senate ceased being democratic in March 2009. The level of
disruption to the judiciary was relatively limited, if only because of the juridical
dysfunctions already present. Madagascar’s technocratic class is relatively strong,
and has historically been an important driver for public administration. But, with the
rise of conflict and the narrowing of political space, many leading technocrats were
either ousted from their positions or chose to leave for the private sector or
international organizations.
Performance of
The capacity of the state itself has diminished substantially.
Madagascar’s democratic structures have been truncated and the democratic process
itself remains fluid. Elections have failed to materialize and state capacity continues
to erode. Yet there is a certain level of bureaucratic functionality within the relatively
undemocratic institutions that remain. This bodes well for state-strengthening and the
potential for institutional performance following a return to constitutionality.
Every Malagasy president since the dawn of the democratic era has changed the
constitution to serve his political needs (save the acting presidency of Norbert
Ratsirahonana in 2006). The changes affected the power of the presidency vis-à-vis
the legislature, the way in which the territory is divided into provinces or regions, the
official languages of the country, and other fundamental aspects of the government
and society. The process leading to the November 2010 constitution of the Fourth
Republic recognized the political challenges and the resultant constitutional
confusions, but ultimately it produced a document that is even more obfuscatory. As
a result of two decades of institutional manipulation, there is a general disregard for
political institutions as guaranteed by the constitution. Often, relevant actors pay only
lip service to democratic institutions, then try to manipulate them. Meaningful
governance tends to take place through interlocking public and private networks
seeking to control rents as a mechanism for maintaining stability and power. Social
movements, prominent in Madagascar, have served as expressions of the lack of
institutionalized avenues for public participation in the governing process.
Commitment to
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5 | Political and Social Integration
Political pluralism is enshrined in the Malagasy constitution. Malagasy political
culture has a highly liberal character compared to most of its continental counterparts,
as evidenced in surveys by Afrobarometer and diverse academics. Legal codes have
been well drafted by a cemented technocratic class, leaving electoral laws
institutionally fortified. Party politics in Madagascar are highly personalized and the
party system is fragmented, while a well-functioning party system serves to aggregate
public interests, build political platforms, recruit and nurture new leadership, and
incubate ideas. Even in democratic periods of Malagasy rule, parties have had an
authoritarian flavor, with individuals creating parties as vehicles of rule. Thus the rise
of an individual president has consistently meant domination by his party in the
legislature, and the fall of that president has meant party irrelevance.
Party system
The pattern of party personalization has existed since the French colonial government
began allowing parties to form in the latter part of the colonial period.
Party systems have long been governed by well articulated party politics laws. Yet
these laws have long been seen as part of the problem, excluding competitors while
creating a bureaucratic labyrinth. In 2008, then-President Ravalomanana
commissioned two respected public servants from outside of his own political
network to write a white paper on how to change the party politics law. The white
paper was well received by scholars in Madagascar and abroad, but the resulting party
politics law, 2009-02, left most analysts and politicians cold. In many ways, it
increased the barriers to competition and discouraged the institutionalizations of
parties that could survive succession of leadership.
Moving forward, there is little reason to believe that the party system will stabilize or
parties will serve their institutional purpose in the foreseeable future.
Estimates on the number of cooperative associations and interests groups in
Madagascar vary widely. The number of nationally registered associations is less than
200, but European Union, World Bank and United Nations Development Programme
studies all point to between 3000 and 5000 such organizations. In the main, they
appear to do a good job of bringing people together for a focused purpose such
agricultural cooperation, business communication or environmental protection.
However, capacity is concentrated in a very small number of groups. In most cases,
these are groups that are either non-government organizations funded by donors for
a specific community-level purpose, but with limited capacity for representation, or
they are groups based in the capital that are largely dependent on the singular funding
and activities of their leaders. Organizational capacity, therefore, remains very low
Interest groups
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with limited financial resources, human resources and communication even amongst
core constituents.
The top-heavy nature of civic life in Madagascar means that, for larger organizations,
there tends to be a divide between politically connected if not embedded leaders on
the one hand, and their primary constituent groups at local levels on the other. Smaller
organizations tend to interact vertically only when they are development-related, nongovernment organizations. As a result, interest groups have an extremely limited role
in acting as a check on state power.
There are notable exceptions to interest group limitations. Some religiously based
development organizations, such as Sehatra Fanaraha-maso ny Fiainam-pirenena
(SeFaFi), have created significant vertical integration and thus can communicate
more effectively both up and down organizational levels. Churches themselves have
historically played an important political role even if their political activities tend to
be conducted independently of their spiritual bases. Professional associations,
particularly in the capital, regularly promote dialogue and coordinate advocacy, even
if communications with government are often stymied by the complex nature of stateprivate relations.
Survey research is relatively limited in Madagascar, particularly since the beginning
of the political crisis. The most recent Afrobarometer survey, conducted in mid-2008,
pointed to a country facing a crisis of democratic legitimacy. Only 39% of
respondents saw democracy as preferable to other forms of government, with 27%
saying it didn’t matter and the rest abstaining. Some 59% of respondents said that it
is the job of opposition parties to cooperate with the ruling party without examining
or criticizing it. In nearly equal numbers, respondents argued that the democratic
system of governance should be given more time to solidify, and, if the present
system could not produce results soon, another form of government should be tried.
A strong majority (61%) agreed with the proposition that the success of government
is defined by its ability to improve the economic lot of the poor majority, rather than
by increasing personal liberties (10%) or giving the people more say (6%). Only 11%
of respondents saw Madagascar as fully democratic. Elections appear to have been
thought of as separate from democracy in that the overwhelming majority (86%) said
that leaders should come to power via elections. This is consistent with the relatively
liberal political culture identified both in earlier Afrobarometer surveys and in
academic studies.
The above figures come from a study completed at the end of an election cycle, and
while the elected president Marc Ravalomanana was still in power. Scholarly surveys
in the capital since then point towards an increasingly fragmented electorate. The
priority today appears to be stability. Interestingly, the percentage of the population
in the capital that views Madagascar as largely democratic appears to have shifted
little since the military overthrow of the elected president. In urban areas of the 2008
Approval of
BTI 2014 | Madagascar
Afrobarometer survey, a slight majority argued that they had trust in the president.
Less than half had trust in the legislature, the ruling party, opposition parties, the
police, the courts or the electoral commission, and all were seen by a majority as
corrupt. This is an indicator that there was little approval of democratic institutions
prior to the overthrow – an indicator of a crisis in the making in a country known for
social movements that spark as a result of institutional failure. Scholarly surveys in
the capital appear to point to a further drop in trust since the crisis began. In 2010,
the electorate in the capital appeared to be choosing tepidly between Ravalomanana
and Rajoelina. By 2011, there was no clear preference for any particular leader, and
trust had eroded in the office of the presidency itself.
In Madagascar, trust is built, first and foremost, along clan and kinship lines. Ethnic
or “tribal” identities are largely French social constructions and have relatively
limited meaning. Exceptions can be found where precolonial monarchies flourished:
The Merina empire came to dominate the island in the 19th century at the expense of
other monarchies, in particular the Sakalava kingdom of the northwestern part of the
country. Caste identities are controversial but do persist within certain identity
groups. In Imerina, for instance, andriana (nobles), hova (commoners) and andevo
(decendants of slaves) are not the lines of economic distinction they once were, but
they do figure prominently in social life and, thus, the formation of social capital.
Social capital
While surveys on social capital are limited, there is clear research pointing to
common findings. Trust tends to be localized and horizontal. As a result, community
organizations such as those for tillage, community rule-making (dina) and funerals
are active and important parts of daily life. There are signs that the political crisis,
four years on, has increased voluntarism. As state capacity has diminished,
communities have had more need to provide services for themselves. Some of these
areas, particularly security, require heightened levels of trust at the community level.
II. Economic Transformation
6 | Level of Socioeconomic Development
Madagascar has bountiful natural and human resources, but it has not been successful
in translating those into sustained periods of economic growth. Political crisis and
economic downturns significantly overlap.
The United Nations Development Programme (UNDP) ranks Madagascar 151 out of
186 in its Human Development Index, down from 143 in 2008. While the country
has, until recently, fared well in comparison to other African countries in education
and health access, income has continued to trail. The World Bank estimates that 93%
BTI 2014 | Madagascar
of Malagasy live below the $2 per day poverty line, up from 89% in 2001, and 43%
live below the $1.25 per day extreme poverty line, up from a low of 26.5% in 2005.
Spending on health in Madagascar has increased steadily in the 2002 – 2008 period,
from 113 billion ariary to 245 billion ariary. Education followed the same trend, with
public expenditure increasing from 243 billion ariary to 585 billion ariary. Much of
this growth, however, is attributed to direct budget and sector support at the
ministerial level by donors. With the political crisis of 2009 and the freezing of new
donor spending, health and education spending plummeted. Starting in late 2009, a
consortium of U.N. programs increased social sector spending markedly to address
an alarming monthly rate of 66 deaths of children aged 0 to 5 per 1,000 (2012: 58 per
Most identity factors do not substantially differentiate the patterns of poverty. The
CPIA Gender Equality Index, which assesses the extent to which the country has
established institutions and programs to enforce laws and to promote equal access,
gives Madagascar a score of 3.5. This is an indication of continued challenge, but it
places Madagascar well above the African average, closer to Latin American
averages. Catholics and Protestants are evenly dispersed throughout urban and rural
areas, removing economic biases. The one significant exception is in Imerina. The
capital, Antananarivo, was the center of the Merina monarchy, and people of Merina
identity had significant advantage in access to both education and markets throughout
the precolonial and colonial period. In early caste systems, even Merina commoners
were seen as superior to regional elites. Today, the so-called “big families” continue
to be primarily Merina, education systems disproportionately advantage the capital
and people of Merina ethnicity, and the new business elite is disproportionately
Merina. This is, in part, the reason why the struggle between Presidents
Ravalomanana and Rajoelina, both Merina and from the entrepreneurial business
sector, has been so widely viewed as a struggle between two houses in which not all
ethnic groups participate. There are, decidedly, significantly portions of the Merina
population in extreme poverty, but Merina dominate the middle, business and now
political classes.
Economic indicators
GDP growth
Inflation (CPI)
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Economic indicators
Foreign direct investment
% of GDP
Export growth
Import growth
Current account balance
Public debt
% of GDP
External debt
Total debt service
Cash surplus or deficit
% of GDP
Tax revenue
% of GDP
Government consumption
% of GDP
Public expnd. on edu.
% of GDP
Public expnd. on health
% of GDP
R&D expenditure
% of GDP
Military expenditure
% of GDP
Sources: The World Bank, World Development Indicators 2013 | International Monetary Fund (IMF),
World Economic Outlook 2013 | Stockholm International Pease Research Institute (SIPRI), Military
Expenditure Database 2013.
7 | Organization of the Market and Competition
Malagasy political culture is liberal and some parts of the country have a long history
of market integration. The country is, for instance, the world’s largest supplier of
vanilla, and the vanilla industry of the northeastern coast has remained a significant
economic and political force since the colonial period. There are, nonetheless,
significant market distortions. The vanilla coast is one of the world’s wettest
inhabited regions and infrastructure remains a challenge. Vanilla growers remain
largely at the mercy of organized vanilla companies and a scandalously ruthless,
largely Chinese, middleman market. As a result, growers commonly receive less than
5% of the international market price for their product.
This dichotomy between a market culture and opportunity on the one hand, and
significant structural barriers on the other, is characteristic of the ongoing challenge
Madagascar has faced in market fundamentals. The World Bank’s Doing Business
As index ranks Madagascar 142nd, down from 138th only a year ago. It is very close
to the sub-Saharan Africa average. This places it amongst countries in significant
BTI 2014 | Madagascar
market struggle but not amongst the direst cases. The currency has long operated on
a floating exchange with relatively little political chicanery. The informal market is
relatively small (estimated at approximately 17% by one scholarly study). There are
areas of improvement. It has become easier, since 2005, to trade across borders, pay
taxes and register property. International investors have been given significant
liberties to invest even while nascent capital markets have helped domestic
entrepreneurs to flourish. Madagascar is now ranked 17th in the world in ease of
starting a business; the procedures and the cost to start a business have both fallen
Nonetheless, structural barriers remain and even have worsened. Insolvency has
reached crisis proportions and addressing that problem has become more difficult.
The formal sector has improved structurally, but it has actually shrunk. As industries
that face a large tax burden have grown, the percentage of small and large businesses
that have exited the formal sector for an informal one has increased.
Madagascar has recently become an industrial mining country. Since 2009, the
permitting of new mining activities has proliferated, with loose oversight driving new
employment where investments from new international partners have little
transparency. During the same period, the trade of illegal timber increased
dramatically. Finally, the textile industry has been significantly stymied by the
political crisis and, in particular, by the loss of American Growth and Opportunity
Act (AGOA) trade preferences.
During the 1990s and, particularly, the 2000s, Madagascar saw a large sell-off of
state-owned enterprises. The state companies for sugar (SIRAMA), cotton
(HASYMA), and air travel (Air Madagascar), were all privatized, with the airport
authority (ADEMA), telco (Telma) and others to follow suit. The state water and
electricity company (JIRAMA) has been an economic and political bête noire with
longstanding challenges in profitability, viability and leadership. It has received
significant attention from donors over the years and the government has actively
sought to reform it to the point where at least a majority share could be sold.
Within the private sector, antitrust laws are few and have a history of exploitation.
Former President Marc Ravalomanana was rarely accused of breaking laws, but he
was regularly accused of unfair business practices, using his company, The Tiko
Group, to solidify his political position and then award its subsidiaries contracts,
preferred tax incentives and other advantages. Today, Tiko is not a monopolistic
force, but many of its areas of dominance have been replaced by equally dominant
private competitors.
Foreign direct investment (FDI) in Madagascar showed only modest changes in the
aggregate in the 1970 – 2001 period. The political crisis of 2002 dropped FDI from
2.5% of GDP in 2001 to 0.23% in 2003. This was followed by a period of
Liberalization of
foreign trade
BTI 2014 | Madagascar
unprecedented growth, peaking at 12.55% of GDP in 2009 before dropping back to
9.1% after the political crisis. Exports followed a similar pattern. However, the height
of 32.7% growth, in 2007, was followed by a contraction of 3.3% in 2008. This was
a year before the crisis, and rising export challenges rather than political instability
were likely the cause.
Madagascar has been a member of the World Trade Organization since 17 November
2005. It has a simple average applied most-favored-nation tariff of 11.65 (2011)
placing it close to the mean of least developed countries (LDC). While trading
partners have diversified over the last decade, European Union states are still the
dominant partners ($580 million in 2011), followed by China ($57 million), Côte
d’Ivoire ($49 million), India ($46 million) and the United States ($45 million).
Since 2008, the country has been viewed as meeting other cardinal requirements, such
as the Agreement on the Application of Sanitary and Phytosanitary Measures and the
Agreement on Trade Related Investment Measures. It has also been active in joining
treaties, including bilateral investment treaties and the Agreement Establishing the
African Trade Insurance, aimed at reducing the cost of trade finance in Africa.
Madagascar has never been a regular participant in import licensing committee
meetings, but for a long time remained in compliance. Today this no longer applies
because, since 1992, there have been no restrictions on imports (other than goods
prohibited by treaty). Madagascar doesn’t have any laws pertaining to countervailing
duties, but this is because it does not grant industrial subsidies.
Technical expertise is high in Madagascar across sectors. As a result, awareness or
ability to take advantage of trade preferences is not a major constraint. The major
constraints are rules of origin, non-tariff measures and supply-side constraints.
Madagascar qualifies for all generalized systems of preferences (GSPs) except for the
U.S. African Growth and Opportunity Act, which it lost as a result of the 2009
conflict. The GSPs allow Madagascar non-reciprocal market access preferences,
which entitle LDC exporters to pay lower tariffs or to have duty- and quota-free
access to third-country markets.
Perhaps the largest trade challenge moving forward is further integration of the
extractive industries sector. While only two large industrial mining operations
operate at present in Madagascar, mining permits have proliferated and extraction is
expected to grow exponentially.
Madagascar has a central bank and six commercial banks. There are three other major
financial institutions, the CECAM (mutualist), the SIPEM (non-mutualist), and the
Equipbail-Madagascar (leasing) as well as smaller mutualist and non-mutualist
organizations. Under law number 95-030 of 22 February 1996, they are governed by
the Banking and Financial Supervision Commission.
Banking system
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The establishment of a Banking and Financial Supervision Commission in 1995 was
watershed for the sector. It defined banking operations and established a single
regulatory authority. Since 1999, according to the IMF, organizations have regularly
applied to the regulatory authority for legal status. Despite two significant periods of
political crisis, the IMF views the Malagasy banking system as relatively sound.
Banks are generally profitable, liquid, adequately capitalized and stable.
The number of borrowers, according to the World Bank, has increased steadily from
6.5 per 1000 people in 2004 to 18 per 1000 people in 2010. Non-guaranteed longterm commercial bank loans from private banks and other private financial
institutions have increased from $665,000 in 2008 to $879,000 in 2011. Data has been
more difficult to procure since 2009, but profit margins have been steady at
approximately 12%, return on assets (ROA) has continued at about 60%, and return
on equity (ROE) about 4%. Short-term loans account for nearly half of all loans, and
deposits account for 82% of total current and savings.
While the banking sector is generally free to support the flow of resources, is
profitable, remains free from direct government intervention, enjoys an effective
regulatory system, and has successfully allocated credit on market terms to domestic
and foreign investors, it is relatively underdeveloped.
New donor activity is likely to have a positive impact. World Bank spending is
expected to jump from $6 million in 2012 to $167 million in 2013 as it continues to
slowly reengage under its 2012 Interim Strategy.
8 | Currency and Price Stability
Exchange rates in Madagascar have been floating since the 1980s. Inflation is
persistent but managed. In 1995, significant effort was made to tame a 45% increase
in the consumer price index. By 1997 it was down to 4.5%. Since then, it has hovered
around 9%, closing at 9.5% for 2012. To ensure success and maintain inflation rates
below 10%, the central bank has maintained open-market operations, interest rates
and minimum bank reserves.
These efforts have been successful. Broad money has consistently stayed between
23% and 25% of GDP for nearly two decades. The ratio of broad money to total
reserves dropped to 1.74 in 2010, indicating a slide on reserves, but by 2011 it began
building again, to 1.92. Money and quasi-money has also remained stable, hovering
at 24% of GDP since 2004. Private sector credit has remained stable throughout the
period, though government credit has nearly doubled, to $158 million.
The stability of monetary policy has come despite two periods of significant political
upheaval and a transitional government in which the executive was not held
accountable through an electoral process. In many such instances, in which the future
Anti-inflation /
forex policy
BTI 2014 | Madagascar
of the executive is unclear and autocracy has supplanted the democratic process,
leaders have sought to use monetary policy to bolster their political position. This is
all the more true in clientelist systems like the one found in Madagascar, where there
is significant pressure on the executive to share the spoils of political power. Yet, in
the Madagascar case, the executive has shown consistent restraint, the central bank
has been able to make decisions relatively free of political interference, and the
national statistics office (Institut National de la Statistique, INSTAT) has been free
to publish data on a monthly basis.
Madagascar had a World Bank Country Policy and Institutional Assessments (CPIA)
debt policy rating of 4.0 in 2011, up from 3.5 in 2006. By comparison, sub-Saharan
Africa as a whole averages a 3.3 rating, and Latin America a 3.6 rating.
Consistent with this aggregate finding, average interest on new debt has declined
from 1.14% in 2007 to 0.75% in 2011. In 2011, according to INSTAT, Madagascar
had 1401.12 million special drawing rights (SDR) in external debt, up slightly from
1376.2 million SDR in 2008, but no longer near the 3040.60 million SDR of 2001.
There was a significant clearing of debt in 2012, including France’s erasure of €375
Since the 2009 political crisis began, the Malagasy government has reacted by
implementing austerity measures. Malagasy government accounts have been kept
under control. Public expenditures have been adjusted to the amount of revenue
available. This has kept debt under control. The official estimate, according to the
World Bank’s most recent figures, are less than 2% of GDP. As a result, interest rates,
inflation and exchange rates have remained steady.
There is nonetheless reason for caution. An increasing percentage of society is living
beyond the grasp of the state. This effectively erodes the tax base. Globally,
Madagascar stands at 68 in the ranking of 185 economies on the ease of paying taxes,
according to the World Bank’s 2013 Doing Business As report. Tax rates dropped
from 47% in 2008 to 36% in 2011, placing it well below the African average but
above the best performers.
With tax revenue at 13% of GDP, Madagascar’s challenge is not the lack of a viable
legal code or technical capacity but rather the state’s ineffectiveness at collecting
revenues. Madagascar also suffers from one of the most fiscally centralized
economies in the world. This puts significant pressure on value added taxes (VAT)
and corporate reporting. In the post-2009 period, revenue collection has fallen
significantly, though this is partially attributable to diminished production in key
BTI 2014 | Madagascar
9 | Private Property
Madagascar’s legal system is based on French civil law. Private property rights are
differentiated by property types, with commercial law ascribed largely to the Code of
Commerce and Annexed Laws and land rights governed through a mosaic of laws
and norms established and altered with varying levels of success throughout the
various periods of Malagasy history.
The Code of Commerce and Annexed Laws is applied with a relative lack of
discrimination. Since 1996, this has included a bankruptcy law and, in 2000, a
Malagasy Arbitration and Mediation Center (CAMM) was created as a private
organization to mediate commercial disputes. This has served as an important tool,
avoiding the often problematic court system. Madagascar is largely in conformance
with international norms on commercial property rights arbitration.
The right to establish a business and earn a profit is well enshrined for both foreign
and domestic private entities. Banks and insurance companies respect property rights
and lend to both domestic and foreign entities. Capital markets are relatively
effective. The legal framework for the protection of commercial property rights is
well established, though enforcement has sometimes waned. There is a pervasive
problem of transparency in the regulatory system, with complex and inconsistently
applied bureaucratic processes. Major brands are generally respected but pirated
movies, music, computer software and other common goods proliferate. During the
recent political conflict, there were no significant claims of flagrant violation of
commercial property rights norms, but there have been accusations of strong-arm
tactics for securing new commercial property rights, business positioning on
commercial property rights, and ad hoc taxation and fees of properties.
Private lands in Madagascar are inextricably tied to complex and often competing
systems of land tenure. Madagascar is one of the world’s great environmental
treasures, with some 80% of flora and fauna unique to the island. There is low-grade
but ongoing tension over what is often perceived as foreign (vazaha) and foreignMalagasy (vazahagasy) use of environmental concern for property rights attainment.
More than two-thirds of Madagascar’s population live on subsistence agriculture.
Following the adoption of investment law 2007-036, a 2008 law was enacted to give
foreigners, who are barred from owning land, land leases of up to 99 years. Since
2006, the Economic Development Board of Madagascar (EDBM) has been the issuer
of authorization documents. The EDBM is intended to bridge public and private
interests and facilitate investment. However, land leases have become one of the most
politically controversial issues in Madagascar, with challenges creating conflict
Property rights
BTI 2014 | Madagascar
around mining interests and large-scale foreign agricultural operations seen as
benefiting a small urban elite at the expense of the majority rural poor.
Despite the significant political differences between the various leaders of the Third
Republic (1992 – 2010), all of them advocated a free-market system in which both
domestic and foreign private companies are viewed as critical engines of economic
growth. In recent years, Madagascar has increased by 50 points in the World Bank’s
Starting a Business indicator, making it one of the highest performers in Africa. The
economic freedom score continues to increase, up 1.2 points from 2011 to 62.4 in
2012, making it above the world average and amongst the top six in sub-Saharan
Private enterprise
The greatest threats to private companies come, as indicated by the latest Enterprise
Surveys, from the growing informal sector, crime, theft and disorder, and
infrastructure. Specific areas of increasing challenge include dealing with
construction permits, registering corporate property, collection of taxes, and
protecting investors. Madagascar scores particularly poorly in Doing Business As and
Enterprise Surveys in resolving insolvency, enforcing contracts and getting credit. It
takes an average of 871 days to enforce a contract. The legal framework for private
companies remains strong. With the exception of credit, which is a scale issue more
than a governance issue, these growing concerns are closely tied to reductions in state
capacity to enforce legal claims in core areas since the beginning of the political
There is continued concern that the public and private sectors in Madagascar are
intertwined. The Tiko Group has essentially been dismantled since Ravalomanana’s
ouster, but the pattern of public-private relations has remained and is apparent in most
of the likely 2013 contenders for the presidency.
10 | Welfare Regime
The UNDP gives Madagascar an aggregate Human Development Index score of
0.483, making it 151st out of 185 in the most recent report. It notes a rise in inequality
of income of 36.1% over previous years. It marks, in a measurement scale slightly
different from the World Bank’s, 81% of the population as below the $1.25 PPP per
day poverty line.
Social safety nets in Madagascar have been insufficient and unable to respond to
surging poverty and vulnerability. There is a relative dearth of public resources
dedicated to the most vulnerable in the population, and funding that does exist is
poorly mobilized. Even though successive constitutions address the need for equality
and development, there are few laws pertaining to poverty provisions and few
systems for social safety nets. With the exception of limited efforts such as highly
Social safety nets
BTI 2014 | Madagascar
labor-intensive public works projects, social safety nets, where they have existed,
have largely been the product of donor interventions.
The Malagasy government undertook austerity measures starting with the 2010
budget law. The central budget was trimmed by 15%. Spending on health care
dropped 34% in real terms under the law and 23% overall during the period. The total
share of the national budget spent on health care dropped to 7%. Such changes did
not happen in a vacuum. At the same time access to health plummeted, price
stabilization of rice, sugar, salt, cooking oil and other necessities failed.
As a result of the political crisis, most donors froze aid or even suspended missions.
Official development assistance and aid dropped significantly in 2009, from $819.14
million to $441.19 million.
UNICEF estimates that poverty increased sharply, from 68.7% of the overall
population before the 2009 crisis to 76.5% in 2010, and from 73.5% to 82.2% in rural
areas. The increase in donor spending on social sectors in the 2009 – 2012 period
should be read as an effort to head off human catastrophe in the absence of adequate
safety nets. Donor spending on education and health care, for instance, grew from
$179.8 million in 2008 to $255.8 million in 2010. The 2010 Permanent Household
Survey (Enquête permanente auprès des ménages, EPM), Madagascar’s national
demographic survey, demonstrates high correlations between levels of poverty and
incidences of illness, particularly in children under 5 years old. For a highly skilled
worker earning an average of 1.58 million ariary ($763.60) per annum it takes an
average of eight work days to pay for the average medical visit and 23 days to pay
for the accompanying drugs. This leaves medical care for the nearly half the
population in extreme poverty, earning less than $1 per day, well beyond reach.
Racial, ethnic and gender equity has long been enshrined in the Malagasy
In practice, equality is more problematic. Madagascar scores a 3.5 (out of 6) on the
CPIA gender equality rating. From 1990 to 2010, women never comprised more than
8% of the legislature (though that has increased to 17.5% in the 2012 non-democratic
legislature). Women make up 37% of the non-agricultural labor force. World Bank
figures show a rural-urban divide in educational access, but the difference between
the sexes for ages 7 to 14 is negligible. There is nonetheless a clear correlation
between fertility and women’s access to education. In some areas, such as the extreme
south, female literacy is exceptionally low. The more significant problem is that
discrimination still exists in relation to inheriting land and property. In some regions,
depending on local ethnic and kinship norms, women have difficulties acquiring land.
Early marriage is common, particularly in rural areas, and violence against women is
widespread amongst some ethno-cultural groups.
Equal opportunity
BTI 2014 | Madagascar
No ethnicity is systematically excluded from educational access, employment, legal
rights or political participation. There are also no mechanisms for consociational
rights. Longstanding historic trends provide for greater educational, employment and
market access in different parts of the country. Since identity groups are largely
divided on geographic lines, there is a de facto differentiation along ethnic lines. In
the capital, the Merina-côtier divide runs deep in politics, society, and employment.
While racism is legally barred, in practice some groups are often viewed as being
intellectually inferior. This applies to employment but even more acutely in social
circles related to marriage and ancestral ceremonies.
11 | Economic Performance
The global economic downturn and the political crisis have combined to take a
dramatic toll on the Malagasy economy. GDP contracted by 4.6% in 2009. It
rebounded to 1.6% growth in 2010 and 0.99% growth in 2011, an insignificant figure
to mark a turnaround. Exports have shown marked decline and cardinal sectors,
including tourism and construction, suffered from low public investment until
recently. Between 2011 and 2012, there have been modest signs of improvement,
including a 13.7% increase in tourism.
The marginal change in GDP masks more significant challenges. Inflation has
remained constant, between 8% and 10% throughout the crisis, but exports dropped
by more than 50% between 2008 and 2011. The formal employment sector in textiles
dropped 25% in 2009, with tens of thousands of workers losing their jobs and
estimates of over a million people impacted by the loss of employment by someone
in their family. Similarly, agro-industry has been highly volatile, surging 34% in
2010, only to drop 18.4% in 2011. The mining sector grew by 54% in 2010, and
continued to grow by 49% from the first to last trimester of 2011. While exports
dropped by 8.4% in 2011 – 2012, mining exports grew by 19.1%. The impact on
labor markets, however, were disproportionately low as labor demand in industrial
mining is significantly lower than artisanal mining and the largest mining employer,
Rio Tinto-QMM, both imported a majority of workers from other countries and saw
a boom and bust employment cycle in the southern Anosy region. Unemployment
claims grew 4.6% from 2011 to 2012, with women impacted disproportionately.
Much to the surprise of the international community, the government of Rajoelina
and his prime ministers has done a good job of creating balanced fiscal policy. After
four years of political crisis, the fiscal situation has remained under control. From
2011 to 2012, receipts and expenditures both dropped marginally in equal turn.
In 2012, the agricultural labor sector continued to employ some 80% of the country’s
labor force while it only accounted for about a quarter of its GDP. The main crops
Output strength
BTI 2014 | Madagascar
are coffee, vanilla, sugarcane, cloves, cocoa, rice, cassava, beans, bananas and
According to a recent study by the Central Bank of Madagascar (Banque centrale de
Madagascar, BCM), FDI inflows increased significantly, to over 10% in 2011 from
less than 2% in 2007. This is largely due to ilmenite mining in Taolagnaro (in the
extreme south) and cobalt and nickel mining in Ambatovy (eastern coast).
Nonetheless, FDI has fallen precipitously in recent years. Between 2007 and 2010,
the growth in value of FDI stock has continued to fall, from growth of 112% in 2007
to 22% in 2010.
Production has also continued to wane during the period of conflict, dropping 23.9%
from 2008 to 2011. Production volume followed the same trend, dropping 33% in the
same period.
Madagascar produces more than half of the world’s supply of vanilla, exporting
between 800 and 1,200 tons per year. Producers at all points of the value chain are
therefore highly vulnerable to shifts in global market prices. In 2003, vanilla sold for
$500 per kg. This dropped to $25 per kg in 2009 before rebounding to about $40 per
kg in 2012. The extreme variation is owed to shifting climate patterns, liberalization
of the industry by government under significant pressure from donors, and the
discontinuance of a quota system.
The services sector accounted for 55% of GDP in 2011, down from 60% in 2009.
While tourism and financial services saw declines in the post-conflict period, services
have shown a marked turnaround in 2011 – 2012. Tourism, particularly ecotourism,
plays an important role in the service economy. A reduction of conflict has already
shown positive impacts, but stabilization with a post-election government in 2013 is
likely to have a sizable positive impact.
12 | Sustainability
Madagascar is one of the world’s most distinct and important environmental hotspots,
with more than 80% of flora and fauna unique to the island. It is home to as many as
12,000 of the world’s plant species. The French colonial government recognized this
through the establishment of protected areas nearly a century ago. The government
of Madagascar embarked on significant environmental policy reform in the 1980s,
which would lead to the creation of a National Office for the Environment, a national
park service, a three phase environmental plan and an effort to align efforts with
international norms including International Union for Conservation of Nature
(IUCN) categorization of parks and protected areas.
The success of environmental efforts has been mixed. Significant infrastructure has
been created and environmental laws are far-reaching. Marc Ravalomanana
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announced at the 2003 World Parks Congress in Durban, South Africa, that
Madagascar would triple its parks and protected areas to 10% of the territory. While
that figure has not been met, there have been significant augmentations including the
creation of the 373,000 ha Makira National Park in 2005 (elevated to permanent
status in 2009).
There have been significant setbacks. First, historically the greatest environment
threats have come from the swidden or slash and burn agriculture of subsistence
farmers. Second, the increase of areas under protection has come at the expense of
local communities, giving rise to community views that the state is using
environmental efforts oppressively. Third, there is a growing scholarly body of work
arguing that it isn’t actually the state of Madagascar that has led the way, but rather
that ecopower has largely put environmental management in the hands of
international donors and international non-government organizations. Fourth, laws
allowing for land leasing have led to the commodification of land, with limited
environmental consideration. Fifth, the rise of natural resource extraction in
Madagascar has posed a significant threat to environmental gains. Mining area
permits and protected areas started seeing significant overlap in 2005, particularly in
the System of Protected Areas of Madagascar (Système d’Aires Protégées de
Madagascar, SAPM), a 2006 designation which integrates private and external
management of protected areas such as Makira, Mikea and Ranomfana-Andringitra.
Since 2009, environmental governance appears to have lost significant ground. There
has been effort at the edges, including an active Madagascar Biodiversity Fund,
intellectual support from donors, particularly the UNDP, and more active and
energized civil society organizations. The ministry created its own New Protected
Areas Management Plan and has maintained an active work plan. Territorial mapping
has continued and the data capacity is meaningful.
Looking towards the 2013 elections, development remains the top concern raised by
potential candidates, but talk of sustainability is scant. A return to an environmental
ethos is unlikely to take place before a new administration is in place, and even then
it is likely to happen only with international pressure, funding and leadership.
The Ministry of Education estimates that 33% of all Malagasy children have limited
access to formal primary education. Education is divided into primary (ages 6 – 11)
and secondary (ages 12 – 18). Vocational secondary schools also exist.
There are three official executive policy interlocutors in Madagascar’s education
sector: the president of the republic, the mayors of the communes, and the presidents
of fokontany (most local level of governance). The administration of education runs
vertically in parallel with governing bodies across eight levels, from the Ministry of
Higher Education and Scientific Research, through regional directors of national
education (Directeurs Régionaux de l’Éducation Nationale, DREN), local CISCOs,
Education policy /
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and down to the schools. The private sector plays an important role, with faith-based
and independent schools subject to national instructional and examination guidelines.
The majority of teachers used to be civil servants. Today the majority of are
Fikambanan’ny Ray Amandrenin’ny Mpianatra (FRAM) teachers, who are hired and
funded by parent associations. In sum, the system is well organized and pervasive,
but the challenges of ensuring funding, training, oversight and payment through the
official system have become acute.
In 2007, Madagascar launched a major new education plan. It was just barely getting
off the ground in 2009 at the time of the overthrow. Since then, funding for education
has been reduced or delayed (up to eight months’ delay in teacher payment), and
funding has become more disparate (the number of FRAM hires has dramatically
increased). As a result, there is great confusion in the sector, and there are reports of
a significant increase in private non-regulated educational delivery. The 2007 plan
has been neither fully implemented nor replaced.
In 2011, according to government figures, less than 3% of GDP was spent on
education. This equates to less than $7 per capita. Compared to an index of like
countries (Burkina Faso, Mozambique and Rwanda), this is 40% less of the total state
budget spent on education. The sub-Saharan African average spending on education
is 5.1% of GDP.
There is growing concern that public spending is not just low but geographically
uneven. There are (speculative) accusations that funding has served clientelist needs
rather than educational ones. This has continued since re-division of the country into
regions in 2004.
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Transformation Management
I. Level of Difficulty
There are structural factors that constrain political leadership. Poverty is endemic and
impacts the majority of the population. Less than 15% of the labor force has a
secondary education (and only 3.4% have a tertiary education). The geographic
location of the country makes trade expensive. Parts of the country are plagued by
near-annual cyclones. And there is a significant urban-rural divide, with less than
one-third of the population in cities. Infrastructure remains a challenge. Yet the
cardinal constraint in the quality of governance has continued to be the reliance on
political networks to maintain power and the prioritization of those networks over the
national good.
Since 2009, responsible governance has significantly declined. Transportation and
communications infrastructure, education, rural development, health, family
planning and combating HIV/AIDS, economic growth stimulation, environmental
protection plans, and boosting national solidarity have largely fallen by the wayside.
While donors share some responsibility for sectoral declines when abandoning
sectors of high investment, the government has done little to stave off state declines.
Some analysts have begun calling Madagascar a “fragile state.” This is probably
technically inaccurate, but the state has slowly but continuously lost capacity across
a majority of sectors. Regular assessments have become nearly extinct, and
regulatory policies have continually weakened, particularly in moneyed sectors such
as mining. The government has limited capacity to set strategic priorities that plan
months ahead, let alone years.
To its credit, the government has pursued prudent fiscal and monetary policies aimed
at mitigating the economic fallout of the political crisis and the global downturn.
Civil society, considered as intermediate organizations between society and the state,
is weak in Madagascar. A robust civil society requires vertical communication up
and down the channels of power and independent institutions capable of aggregating
interests to challenge the state. Church groups have, at various points in Malagasy
history, played an important role in brokering political outcomes, but their
aggregation of interests has often been challenged. There are examples of civil
society at work, but they remain limited. In most cases, civil society organizations
Civil society
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suffer from a rupture in communication between the grassroots and the national
leadership, with the latter acting as embedded political actors more than community
Associational life in Madagascar is, nonetheless, relatively active. Various surveys
have put adult participation in associations between 40% and 60% of the population,
with many belonging to more than one association. These associations tend to be
either for labor (such as agricultural associations) or faith (churches or church
activities). Perhaps surprisingly, collective action in Madagascar tends to be more
prevalent than participation in associations. By some accounts, more than 60% of the
population have been involved in at least one collective action. This implies strong
horizontal engagement but weak vertical engagement.
Social capital – the features of social organization such as networks, norms and social
trust – follows this pattern of weakness. Afrobarometer surveys demonstrate a
startling level of distrust by the population of virtually every public office.
Madagascar’s political space is commonly defined by the relationship with the
Merina of the central highlands and the côtier, nominally the other 17 ethnic groups.
Merina ethnicity is based on the Merina monarchy of the 18th and 19th centuries, but
ethnicity is generally a fluid identity marker in Madagascar. Some scholars have
referred to a more prevalent pseudo-ethnic divide dating back to the 1947 anticolonial
conflict, which cost an estimated 100,000 lives.
Though ethnicity itself might not be so clear an indicator as some might think,
Madagascar’s history can be told through its social movements. The social forces that
led to the resignation of Philibert Tsiranana, leader of the First Republic, roused
popular sentiment that 1972 marked the country’s true independence after 12 years
of leadership that was too close to the former colonial power. Smaller social
movements persisted through the 1970s and 1980s, including a large conflict in the
capital in 1984 between youth groups that supported different political leaders. A
significant social movement, stemming from a civil servants’ strike, shut down the
government for nine months in 1991, bringing an end to the Second Republic. When
the opaque, government-controlled vote count of the 2001 – 2002 elections did not
produce a clear victory for Marc Ravalomanana, an estimated 100,000 people filled
the streets of the capital, spreading throughout provincial capitals, and, ultimately,
nearly balkanizing the country before Ratsiraka was forced to flee. The social
movement of 2009 was less encompassing of broad swaths of society, and followed
the convictions of higher social echelons, but nonetheless reflected a tendency to see
institutions as a poor way to create change, and street protest as a populist activity.
The common thread in these social movements is that, since 1947, they have been
largely urban and political. Ethnic and other identity groups have come together to
push for particular political leaders or causes, and allegiances have not been
Conflict intensity
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consistent. The 2009 conflict, not the largest but perhaps the most dangerous in postindependence history, was one in which each side largely supported one of two
leaders, Ravalomanana and Rajoelina, who are both Merina. It was seen in the capital
as a struggle over the private sector, land rights, poverty, development, political
process and the direction of the country. The pressing question at the time was
whether this would become a rural question. If it did, the fear went, 1947 might be
repeated with tens of thousands of lives lost and decades of recovery required. It
remained an urban conflict, thus avoiding such a broad catastrophe, but it
marginalized the rural poor further while creating a profound national despair.
II. Management Performance
14 | Steering Capability
The president of Madagascar is afforded sweeping powers in comparison to other
semi-presidential systems. The constitution of the Fourth Republic (2010) did little
to mitigate executive strength, but it did obfuscate certain powers or leave them to
the policy realm, where the president maintains de facto control. In some cases, a
strong presidency holds the advantage of forming a developmental state with longterm planning left free from the fetters of political competition. In Madagascar,
presidential power is embedded in socio-political networks that are subject to
electoral vicissitudes.
The 2009 overthrow of Ravalomanana came at a time when reforms were not yet
solidified (and in part because reforms were not yet solidified to the advantage of
certain segments of the elite). There have been important institutional advances
during the Rajoelina period (2009 to the present). The electoral code was addressed
through four critical laws, Nos. 2012-004, 2012-005, 2012-015 and 2012-016, which
gave a clear mandate to an independent electoral commission and established the
electoral processes for the presidency and legislature of the Fourth Republic. Muchneeded reform of the party politics law (2009-002) did not happen, but a series of
executive orders have addressed key issues for parties and sectors of concern.
These Rajoelina-era reforms, however, do not yet appear to have translated into
meaningful action. Strategic plans are written to international standards with threeto five-year windows, but they are living documents that frequently change. In
practice, planning appears to look at short if not micro-windows with revolving
ministers hoping to make personal gains before being pushed out of office. There are
articulated policy priorities (predominantly focused on using the country’s vast
resources to benefit the population as a whole), translated into different sectoral
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strategies. In practice, these articulated policies see little prioritization. The
government appears to be waiting as much as the population as a whole for elections
and a resolute end to the political crisis to make any meaningful decisions.
The priorities of the Malagasy government are those articulated by Andry Rajoelina.
He has stated that his primary duties have been to safeguard national sovereignty and
guarantee freedom. The nebulous character of these priorities is apparent in the
vagaries of the strategic priorities. The key strategic priorities and policy planning
documents of the Ravalomanana administration, including the Madagascar Action
Plan, the diverse sector strategic plans, and the reforms of key ministries themselves,
all ended with the ouster of Marc Ravalomanana in 2009. Few policy priorities have
been identified since and most sectoral plans have neither been implemented nor
discarded. A state of confusion has endured. Restoration of the ability of government
to implement its policies will like follow both the election of a new president and
legislature and a period of institutional reconstruction and donor reengagement.
The government demonstrated willingness in policy learning during the continuing
political crisis, but not in favor of democracy. The Rajoelina administration came to
loggerheads with the international community early in the peace negotiations,
effectively exiting the process in December 2009. Agreements through the 2009 –
2011 period were rendered meaningless before the ink dried. For its part, the
international community and its rotating leadership from the United Nations, African
Union and SADC were slow in recognizing that its plan had little to offer Rajoelina
and, indeed, Rajoelina couldn’t effectively implement it without risking domestic
strife as he would have severed his powerbase.
Policy learning
Ultimately the SADC-led mediation team wrote a roadmap that effectively accepted
the Rajoelina government as the transitional government with only superficial cabinet
changes. This was a square victory for Rajoelina and marked a clear capacity of the
government to learn from its strategic mistakes in the negotiation process. December
2012 – January 2013 did bring a glimmer of hope for the restoration of democracy as
Ravalomanana and Rajoelina both committed to remove themselves from contention
for the Malagasy presidency in the 2013 elections. This also appears to have cleared
the way for legislative and presidential elections after years of a sliding timetable.
With all of the aberrant political behavior since 2009, markets have endured and even
grown. With the economic crisis coinciding with the 1991 – 1992 political crisis, the
transitional government sought unscrupulous international parallel financing at great
expense to the country. In the aftermath of the 2009 crisis, the government diversified
its market partners, particularly with an eye towards China, but it limited borrowing.
The World Bank’s operational code on dealing with a de facto government limited
the ability of the government to engage in official conversations, and the IMF
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continued to postpone meaningful dialogue, but responsible fiscal and monetary
policy decisions were made and quietly praised by the international community.
15 | Resource Efficiency
Since 2009, fledgling gains in government efficiency have largely given way to
predatory politics and rent-seeking opportunities. There have been reductions in key
areas of social spending, including health and education. The geographic distribution
of funds to regions has become increasingly suspect. Whereas transparency was high
(even if accountability was low) during the previous administration, budget planning
and implementation have since become opaque. Fiscal decentralization has long been
a highly political and poorly executed process, but the lack of transparency in the
post-2009 period has created both new disparities and heightened levels of alarm.
The tax reforms of 2008 have been all but abrogated. The tax administration is
understaffed and audits are few and far between.
Efficient use of
While the politicization of public administration is a significant reason for concern,
there are areas of success. National debt has largely been kept in check, with domestic
and international borrowing kept to a minimum. Austerity has taken its toll,
particularly on the poorest segments of society, but the state budget has been balanced
to a point that most of Europe can envy. General final government expenditure
decreased as a percentage of GDP, from 11.6% before the crisis to 9.96% in 2011.
Perhaps counterintuitive to a regime that took power through military actions,
military expenditure has also decreased as a percentage of GDP, from an already low
1.10% in 2008 to 0.72% in 2011. At 0.35%, public and publicly guaranteed debt
service in 2011 was comparable to pre-crisis levels. All of these findings compare
favorably with sub-Saharan Africa as a whole. As a result of these prudent
government actions, the World Bank has maintained Madagascar’s CPIA debt policy
rating of 4 since 2007. CPIA scores for economic management, efficiency of revenue
mobilization, fiscal policy, and public resource use have all remained relatively
consistent. By contrast, the quality of public administration and public sector
management and institutions have shown declines, largely owing to the application
of funds and loss of transparency. Even in these categories, Madagascar scores
comparably to sub-Saharan Africa as a whole and slightly better than countries in the
region with lower income.
Madagascar continues to lack a coherent institutional structure for managing
government programs and policies, and the institutions that do exist are largely
incapable of carrying out their mandates. Even where data collection and technical
capacity are high, objectives are poorly coordinated and scarcely met. For instance,
the environment sector, a significant focus given the unusual wealth of flora and
fauna, has significant capacity to conceptualize space and map territories. The
technical capacity is in place to monitor not just challenges of scale such as
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deforestation but micro-level challenges such as counting illicitly felled rosewood
trees. Databases link geographic information system (GIS) data to resource markets
through the value chain. However, responsibility for the environment sector is
fragmented amongst ministries, all of which suffer from inadequate funding,
insufficient staffing across levels, lack of information flows, and a history of
agricultural needs and policies that have undermined environmental policy goals.
There is often a significant divide between the ministerial level and the level of
secretary-general, where the former is a political appointee seeking personal gain and
suffering from limited knowledge, and the latter is well-placed and knowledgeable
but lacks the authority or power to achieve desirable ends. Policy coordination is
difficult in an environment where individuals with their own political networks
compete for power and influence.
Madagascar has long struggled to contain corruption. The country made some
progress, but since 2009 the crisis has taken its toll.
The gains in the fight against corruption are largely felt as a result of Ravalomanana’s
effort to create the Integrity Safeguard Committee (Comité de sauvegarde de
l’intégrité, CSI) and the Independent Anti-Corruption Bureau (Bureau independent
de lute anti-corruption, BIANCO). Leadership of these institutions was, in the main,
significant, with high-caliber public servants in key decision-making positions.
BIANCO showed increasing successes in urban areas, notably the capital, as long as
it applied its efforts below the director level. As this “independent” bureau was
formed in the president’s office, it couldn’t maintain accountability at the ministerial
level or above. Today, both still exist but suffer from significantly reduced resources,
in part because they have lost donor funding. With the change in government,
however, BIANCO’s leadership notably retained its integrity. BIANCO appears to
have taken some successful steps at curtailing potential actionable behavior within
its own investigative ranks.
In other sectors, such as mining, there really are no significant anticorruption
mechanisms. The Extractive Industries Transparency Initiative (EITI) process has
been a fiasco. Madagascar was almost the first country to fail to be EITI-certified
after entering the process. Instead, the EITI secretariat gave Madagascar the
opportunity to reform its practices. In 2012, Madagascar once again failed to meet
that mandate and EITI maintained its suspension.
16 | Consensus-Building
In the main, there is a broad consensus on democracy and market economics within
the political elite. No one is openly challenging the path of limited democracy and no
one is challenging the role of the market economy. There is no strong “socialist”
Consensus on goals
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movement and no strong religious movement. As the political crisis has worn on,
there has been discussion of a “third way,” nominally a military overthrow in the
name of political stability. However, the military has had ample opportunity to take
control and has chosen to retain its commitment to civilian government. There have
been two nominal coup attempts against Rajoelina since 2009, but they have been
poorly funded, poorly executed affairs representing an insignificant portion of the
military. Would-be coup leaders scarcely made it out of the barracks.
Where there does appear to be an increasing challenge to the democratic process is
not in the political elite but amongst the citizenry. Public polling data shows a
consistent linking between the outcomes of democracy – a need to produce economic
development – and the adoption of norms. With poverty rising and the social safety
net eroding, there is evidence to point towards an increasing level of public
frustration. Support for authoritarianism and military rule remains very low, but
democracy still is not seen as a necessary end in urban areas.
In many countries, there are clear reforms challenged by potential state breakers. This
is not the case in Madagascar. Instead, all political leaders since 1992 have been
reformers advocating democracy defined by regularized elections, expansive
personal freedoms and market-oriented economic proclivities. At the same time,
political leaders have served as embedded network agents, benefiting personally from
public reforms. Media has been allowed to flourish but political elites have largely
controlled the media and used private competition as a proxy for limitation on public
voice. Every president in the history of independent Madagascar (save the interim
presidency of Norbert Ratsirahonana after the fall of Albert Zafy in 1996) has
changed the constitution to suit his needs. Every president has acted unilaterally on
cardinal issues such as the guidelines for contractual relationships; the nature and
process of decentralization and whether the nation should further centralize into a
fully unitary state; how the territory is divided into provinces, regions, communes
and fokontany; and even the power of leaders across different levels and the process
of taking their positions in the first place. In this sense, democracy has remained the
only game in town, but reformers have continually changed the rules to their own
Since 2009, the space for reform has shrunk substantially as the Rajoelina
government has focused largely on its own survival. At no point has the government
stopped its cries for elections, but the timing of elections has remained a political
sticking point and they have not been executed. At the end of 2012, there were some
stirrings of hope as parties began organizing once again, a U.N.-World Banksupported effort to complete an electoral census was completed, and elections
appeared finally to be in the offing for 2013.
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Political parties in Madagascar tend to represent individual leaders rather than
interest groups. They reflect significant regional divides and allegiances with
particularly notable distinctions between the capital region, Antananarivo; the east
coast surrounds of Tamatave; and the southern regions of the former Tulear province.
Yet the Rajoelina government, for all of its divisiveness, did manage to consistently
bridge those divides. In this sense, social, regional and political cleavages in the
country are significant but not always recognizable. The current conflict is occurring
on political network lines that involve ethnogeographic distinctions, but intra-Merina
conflicts reflect caste and family differences. More germane is the role of the private
sector in these cleavages. Current and former leadership has done little to address
these cleavages. If anything, it has acted to exacerbate them and even create false
distinctions in order to rally support for political gains. Looking towards new
elections, another Merina president could likely be destabilizing – less because of
ethnic divides than because of the popular sentiment wishing a pox on both the houses
of Rajoelina and Ravalomanana for dragging the country to such depths. There is no
formal mechanism for ethnogeographic cohabitation, but there is a distinct
possibility, if not a likelihood, that it will demarcate a post-election political map.
Cleavage /
Civil society in Madagascar is historically weak and has remained, to a large extent,
absent from the political process. What little role it does have has largely been
captured by civil society leaders who themselves are embedded in the political
process. Trade unions, students and other such actors are largely irrelevant. In the
past, churches have played a significant brokering role but not much less so since
2009. Studies conducted independently by the World Bank and the UNDP both
conclude that there have been significant weaknesses in the two umbrella
organizations of civil society, the National Platform of Civil Society Organizations
in Madagascar (Plate-Forme Nationale des Organisations de la Société Civile de
Madagascar, PFNOSCM) and the National Consortium for Citizen Participation
(Consortium Nationale pour la Participation Citoyenne, CNPC).
Civil society
The potential for civil society action to help resolve the current political crisis was
stymied early on by an international mediation approach that focused on the four
living heads of state – Albert Zafy, Didier Ratsiraka, Marc Ravalomanana and Andry
Rajoelina – at the expense of all other political, social and civil society actors in
Malagasy political space. Yet, despite the weakness of the sector and the lack of
space, key civil society actors were surprisingly successful in starting what became
known as a Malgacho-Malgache process. It does not appear that civil society acted
as largely representative of society, but ultimately it did provide the voice of reason
and helped bring a shift in the SADC approach to international mediation and
ultimately the road map that was adopted to lead the country out of the crisis.
Most conversations of reconciliation start with 1947 – the year in which an estimated
100,000 people, mostly Bestimisirika (East Coast), were killed. The memory of this
period continues to permeate Malagasy society and politics. It can be argued that this
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fear of high conflict has helped contain the urban and relatively low-grade violence
Madagascar has seen even in the face of significant social upheaval.
December 2001 saw Ratsiraka subvert the institutional process leading to elections
(such as stacking the High Constitutional Court and changing the Electoral Code in
his favor), and a January – June 2002 social movement that brought Ravalomanana
to power. For his part, Ravalomanana was right to challenge the opaque vote count,
but his declaration of presidential victory in February 2012 was clearly extraconstitutional and deeply polarizing. The 2005 – 2007 period saw a pattern of
elections that were openly challenged by an electorate who, polls suggest, gave them
limited legitimacy. There has been talk of reconciliation since 2004, but that
movement itself became a political process (largely associated with Albert Zafy’s
movement), and neither it nor a post-2009 reconciliation process looks likely.
17 | International Cooperation
Madagascar has enjoyed significant international support since the beginning of the
Third Republic in 1992, but Ravalomanana came into power in 2002 heralded by the
U.S., the World Bank and others as a new democratic actor worth emulating. His
administration consistently used the support of international partners to look towards
long-term development strategies. One of the key development challenges for the
government was to improve the efficiency and transparency of government and
public services. From 2004 to 2009, the World Bank supported the government and
civil society to tackle these challenges through the Governance and Institutional
Development and Social Accountability Technical Assistance Programs. They
contributed to analytical work composed of a front review of the Bank’s nearly $1
billion portfolio to identify the most important entry points for mainstreaming
demand-side as well as supply-side accountability in governance of sectors as diverse
as mining, water, electricity and the environment.
The European Union, with its $267 million portfolio, contributed to sustainable
development programming, integration of the economy with global economic forces,
and poverty reduction strategies. France has remained Madagascar’s single largest
bilateral partner, but during the Ravalomanana years the United States, Germany and
Korea all saw growing roles. At their zenith, multilateral and bilateral donations
accounted for nearly 70% of government receipts.
In the past three years, Madagascar has successfully eschewed the specter of seeking
parallel financing to make up for losses in donor support. Instead, it has managed to
make up for some of the shortfalls of international funds through new private sector
contracts with foreign interests, particularly China.
International interest in oil also portends significant investment in the coming years.
Total is the majority holder of a controversial tar sands project in Tsimiroro and
Effective use of
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Bemolanga, which have been shown to have multibillion-barrel resource volumes in
There is little trust in the current government from anywhere in the international
community. Donors, where they have continued to fund, interact largely at local
levels to avoid direct state involvement. Only France maintained direct
communication with the Rajoelina government. High private sector interest in mining
and oil sectors has not been an indicator of trust. Indeed, both of the two large
operating mining consortiums, let by Sherritt and Rio Tinto/QMM, have complained
publicly about strong-arm tactics by government officials. Madagascar Oil interests
and the Total Tar Sands deal nearly fell through due to erosions of trust that
government contracts were viable and that the political crisis would avoid a
significant turn for the worse. The AU and SADC both suspended Madagascar’s
membership until elections are held.
In 2012 successes of the road map led to a change in tone by key donors. The World
Bank released an interim strategy that served as harbinger of reengagement in 2013.
The UNDP, the European Union and the United States Agency for International
Development (USAID) have all begun bidding processes for new projects, even if
they have yet to approve, at time of writing, any related spending. This shouldn’t be
taken as a sign of credibility of the current government, but rather that there is
newfound hope that a new, more credible government is in the offing for 2013.
In the 2002 – 2009 period, Madagascar saw significant growth of good will, with new
entry into SADC and an augmenting presence in the African Union. Private
businesses increased their interactions across borders, particularly with Mauritius and
Botswana. Madagascar clearly saw these countries as economic models for future
In the aftermath of the unconstitutional change of government, relationships between
the new government and regional and international organizations collapsed. The AU
formed an international contact group to coordinate international community action
to ensure a return to constitutionality as quickly as possible, and the SADC appointed
former Mozambican President Joaquim Chissano as a mediator in the effort to find a
consensual, negotiated end to the crisis. However, the endurance of the crisis and the
need for Extraordinary Sessions of the African Union rapidly put Madagascar on the
receiving end of significant regional criticism. By 2011, comparisons were being
made to Zimbabwe. U.N., AU and SADC interlocutors appeared to have lost hope in
Rajoelina as a partner in negotiations. The SADC road map signed on 17 September
2011 was a flawed document that left key questions, particularly amnesty for Marc
Ravalomanana, unanswered. It was, nonetheless, a turn in the negotiations as the
international community reengaged Rajoelina, largely as a practical matter, on his
own terms.
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Strategic Outlook
Madagascar has been in political crisis since the overthrow of President Marc Ravalomanana and
the subsequent installation of Andry Rajoelina as President of the High Authority of the Transition
(HAT) on 21 March 2009.
The international community was involved in crisis mediation from the beginning, with various
efforts by the African Union (AU), Southern African Development Community (SADC), the
United Nations (U.N.) and the Organisation Internationale de la Francophonie (OIF). The original
approach was to focus on the four living heads of state, but power-sharing deals reached in Moputo
and, later, in Addis Abbaba, failed. A turning point came on 11 March 2011 as the SADC mediator
supported a road map which focused on Ravalomanana, Rajoelina, a large number of smaller
political parties, and a group of civil society leaders. This road map was signed on 16 September
The months that followed the road map demonstrated that trust between interlocutors had been
significantly eroded and that many issues remained. Four years in, it is clear that the leadership
crisis is a symptom of a greater challenge. Weak institutions have failed to contain political
networks and resultant rent-seeking behaviors. Individuals in power have consistently benefited
individually whether or not the office of the presidency had been legitimated through an electoral
process. The public and private sectors, and its leaders, have woven together in unusually intricate
and personalized ways.
Looking forward, presidential and legislative elections scheduled for 2013 will be a critical first
step to exiting the crisis and normalizing the political process. They should not, however, be
expected to resolve the profound weakness of institutions and, particularly, the deeply eroded
capacity of the state to govern, enforce and regulate through critical sectors. The presidency will
remain near-imperial for the foreseeable future, with the legislature and the judiciary struggling
for the legal position, let alone capacity, to challenge executive overreach.
Domestically, a relatively weak but organized civil society in the capital and a cadre of individuals
with high technical capacity offer some hope for the development of watchdogs and pressure for
change. The November 2010 constitution is sufficiently flawed that revision will be required.
Despite an unusual clause against revision, a new government is likely to embark on a revision in
the medium term. The political parties law (2011-12) is deeply flawed, undermining competition
from the significant number of secondary parties, but support for reform is high and success could
create rapid change in the potential to recruit new leadership.
As of early 2013, the international community remains split on how to proceed. The World Bank’s
2012 Interim Strategy focuses on mechanisms for reengagement in governance and public sector
capacity, resilience and vulnerability, and employment and competitiveness. External actors,
particularly the United States, have continued to focus on the need to obtain legitimacy. This
BTI 2014 | Madagascar
implies that new elections in 2013 are likely to trigger greater unity from an international
community eager to return to Madagascar to invest in the development agenda.
Donors will be at a comparative disadvantage with a new Malagasy government. The international
community lost significant domestic credibility when most donors froze new spending in 2009.
At the same time, it lost its foothold in a struggling economy while the government has fared
comparatively well in the management of fiscal policy despite political illegitimacy, strong-arm
leadership tactics and declining state capacity. New international partnerships have blossomed in
recent years, particularly with private Chinese interests. Most importantly, Madagascar is now
entering an era of significant natural resource extraction, which will generate high income and
growth potential but substantial risk for individual profiteering within predatory political