Madagascar: How an often-overlooked island nation is slowly getting back on its feet

The fourth largest island in the world, which most often makes headlines through its namesake, a DreamWorks children’s movie, is in reality a vast and beautiful place wrecked by violent political conflict, economic stagnation and deforestation. Will 2012 be the year for Madagascar to turn things around? As former leaders are allowed back from exile, things seem to take a turn for the better for the isolated and impoverished nation that ranks 135th on the Human Development Index.

During the past few months, several attempts have been made by the government and opposition parties to return the island to democracy. However, fragile these consensuses are, it needs to be backed by optimism, after several election dates have come and gone without action over the past few years. The sitting president, Andry Rajoelina, who took power through a military supported coup d’état in 2009, has failed to muster domestic and international support, and his unrecognized government caused the country to be ostracized from the international community, losing EU aid, and being expelled from the African Union. Sadly, political turmoil  is familiar to the country, which has seen five successive presidents ousted from power since the dawn of independence in 1960.

That economic hardship is usually increased in times of political conflict also holds true for Madagascar, where real GDP is reported to have decreased by three per cent since the 2009 coup. According to a regional consultancy group, Central African Intelligence, “Madagascar is a nation facing acute environmental risks and severe socio-economic problems, and can ill afford to further damage its economy while its politics are being put in order.”

With 50 per cent of the population living below the poverty line, economic development should be top priority for the government, who are currently holding the business sector hostage to political development. That the majority of Malagasies pursue the same livelihoods as their ancestors, including cattle herding, rice cultivation and small-scale subsistence farming, increases the necessity for a modern style free market economy independent of the government.

Politically, recent developments seem to indicate a sly turn for the better, as talks held in September this year resulted in a specific roadmap for democracy, seeing eight political parties agree on a plan that officially made Mr. Rojoelina the official leader of the transitional government, which will hold power until the elections scheduled for March next year. Whether he will actually step down at that point, remains the poignant question.

Another positive indication of the where the country’s heading is November’s agreement, however reluctant, between the two main opposition groups to form a unity government. Also, on 24 November, former president Didier Ratsiraka surprisingly returned from nine years in exile, presumably after his sentence of ten years of hard labour for corruption was pardoned as a conspicuous good will gesture by the transitional leadership.

Despite such advances, Madagascar is still hurt by a lack of foreign direct investment. Ridiculous past attempts to secure deals with foreign governments, such as the deal to lease 3 million acres of land to South Korea, exclusively for South Korean food production both undermines domestic economy and food production, and makes it another pawn in the Asian exploitation of African countries.

One natural resource that has the potential to increase the influx of foreign funds, if correctly handled, is the petroleum and natural gas industry. Madagascar Oil, a company registered to the London stock exchange, has drilled 68 wells in the last four years, resulting in the discovery of the Tsimiroro Field, estimated to hold 5.5 billion barrels of crude oil. Four other fields are currently under exploration, and in early November, the Nigerian company South Atlantic Petroleum Limited reached an agreement with Houston-based Marex MC Inc to purchase 90 per cent of a maritime block in the Mozambique Channel. The deal currently awaits approval from the Madagascar government.

In order to take advantage of the country’s booming energy industry, beneficial regulation needs to be developed. Over the past year, the domestic oil industry has run into problems that unfortunately seem symptomatic of developing countries, as a government attempt to gain control over profits from Madagascar Oil’s rising share prices resulted in a prolonged court case and arbitration, which saw the company excluded from the stock market for more than six months. The country will need to bring about sufficient regulation that legislators actually adhere to, in order to protect industries with the potential to bring substantial foreign investment.

However, Madagascar’s most valuable natural resource is not the fossil fuel pumped up off its shores. Its indigenous forests hold some of the greatest wildlife diversity found on this planet, only to be matched by the Amazon jungle. More than 80 per cent of species indigenous to the island cannot be found anywhere else on Earth. This poses a special case for environmentalists, and might be the key to increased international cooperation, as the inadequate governance and political turmoil has shifted focus away from poverty and biodiversity conservation.

Companies like Air France have been committed to fighting deforestation on the island for years, and through the air carrier’s consistent work with the World Wildlife Foundation and the GoodPlanet Foundation, a relatively successful project to protect the rainforest from deforestation has seen a $5 million investment, and the subsequent creation of more than 60 workplaces result in more the protection of more than 350,000 acres of land.

Whether such developments are enough to raise the country out of international isolation remains to be seen. They do, however, offer a small comfort to a people who have seen their political system in gridlock since the 2009 coup, and are in dire need of a representative government.