Debt write-off should benefit poor, analysts

A decision this week by France to cancel around US $55 million of Madagascar's debt could free up funds for economic reconstruction, economists said on Wednesday. In a communiqué issued by the French embassy, Paris agreed to considerably reduce the country's debt servicing, in particular commercial debt, for the period between the end of 2000 and up to 2004. Other debts will be rescheduled on a long-term basis. The decision was taken in line with a May 2001 agreement by the Paris Club of creditor nations. The deal was signed during President Marc Ravalomanana's first official visit to the former colonial power since assuming office in July last year. "By cancelling the country's debt, more money will, hopefully, be channelled into poverty reduction programmes. There should be emphasis placed on spending more money on education and nutrition. In general, the funds would greatly benefit economic recovery following the crisis last year," Antananarivo-based economist, Pepe Andrianomanana, told IRIN. French support for the new administration is significant as the country is a major trading partner and an important source of aid. During the 2002 political crisis the French government, a long-time supporter of ex-president Didier Ratsiraka, intially held off recognising Ravalomanana's presidency.