On the road to recovery

Aggressive attempts by Madagascar to curb corruption and kick-start economic development have begun to bear fruit after a political crisis in 2002 threatened to undo many of the economic gains made in recent years. According to official figures, the Indian Ocean island's economy this year grew at an unprecedented 9.6 percent, outperforming expectations. The commercial and industrial sectors were the main sources of growth. "The rebound has happened far sooner that we had predicted. Before the crisis we had experienced a steady five percent growth rate, but within a year the country has reached that mark and even moved beyond that. We didn't think the recovery would be so quick, especially since the political crisis had such a negative impact on the economy. It was thought that it would take at least two to three years before we saw a return to any economic growth," independent financial expert, Pepe Andrianomanana, told IRIN. A crisis over the presidency last year led to a blockade of the capital Antananarivo, the industrial and manufacturing heartland of the country on the central plateau. Essential goods, including fuel and raw materials, were unable to get through, almost crippling the country's already fragile economy. Production fell by 25 percent, forcing many companies to lay off employees. The UN Development Programme country office noted at the time that in the duty-free zone alone, 70,000 jobs were lost. For the urban poor the crisis exacerbated an already tenuous situation. The cost of rice - the staple food of the Malagasy people - increased by 375 percent, pushing it beyond the reach of many families. Just over a year after the upheaval, there is now broad acknowledgement that the country is firmly on the road to economic recovery. Evidence of this is the return of essential goods, which disappeared from the shelves during the crisis. More significant, however, is the vast improvement of some of the main roads leading to the capital city after the government prioritised road rehabilitation and an overall improvement in infrastructure. Much of the credit for the economic turnaround has been attributed to President Marc Ravalomanana, who, after assuming power last year, moved swiftly to court the international community with the promise of further economic reforms and a clampdown on government graft. "Since taking office Ravalomanana has managed successfully to woo investors and convince the international community of his government's commitment to a 'clean' government. This is obviously very pleasing to the donors. But he has also acted on some of his promises, which is an indication that behind the talk there is some action," Andrianomanana added. Ravalomanana managed to curtail government corruption through measures such as pay increases for government ministers, and possibly civil servants, shortly after he took power. But Andrianomanana noted that while efforts by the government were commendable, the real challenge facing the authorities now was economic sustainability. "The government still has several major issues to deal with, the biggest being poverty - many ordinary people have not benefited from this economic improvement. A year is perhaps too soon to expect this, but at some point the government will be judged on how they have managed to improve the lives of ordinary people. Health, education and other social service need serious attention," he commented. Some 75 percent of Madagascar's population is considered poor, with the urban households facing a daily struggle to make ends meet. The World Bank (WB), a major financial backer of the country's economic recovery plan, admits that despite "some progress in the fight against poverty", there remain considerable challenges. "The government has to ensure that some of the achievements over the last year are sustainable. Most of the gains so far are fragile," WB country director Hafez Ghanem said. He added that the government should not renege on its promise to ensure "good governance, sustainable development and a commitment to tackling poverty". For Didier Andriamanana, a trader in the heart of Antananarivo, business over the last year has improved significantly. He told IRIN: "This has been a good year for me. Unlike last year, many more people have money - it is not a lot of money, but at least there is some money going around. I can just hope that it stays this way."