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close this bookThe Courier N 156 - March - April 1996 - Dossier: Trade in Services - Country Report : Madagascar (EC Courier, 1996, 96 p.)
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President Albert Zafy's priorities

Security, economic recovery and good management

The Courier met the President of Madagascar, Albert Zafy, at a difficult time in the country's history. Only a week before, the Rova (Queen's Palace) and the entire royal estate had gone up in flames. Not on/y was negligence on the part of the administration implied, but the fire - subsequently confirmed as arson - initially looked as if it might provoke ethnic conflict. Moreover, the government (formed with great difficulty only two weeks earlier, after the appointment of the Prime Minister) had seen the immediate resignation of three.ministers. These problems took the shine off the President's success in the constitutional referendum on 17 September, which gave him the power to choose the Prime Minister. The country's situation is still deteriorating, and this is perhaps the most worrying aspect for the head of state. This was the subject he tackled first offered us his diagnosis of the main problems facing his country.

- The Malagasy Republic has all the resources it needs to emerge from its destitute state. An example I would give is our mineral resources, such as gold, which we have in abundance in the north of the country. The mines have been worked for a long time and have generated income. But since independence the workings have been in complete disarray, as have been the sales of this product. The same applies to sapphires and other precious stones. There is no production and no worthwhile sales; only illegal trading. The fishing industry is in a similar position. We are one of the richest countries in terms of this resource and it saddens me to see such a large proportion of our income being lost to illegal trading. Even people with proper licences sometimes resort to crime, and we have to prosecute them. In the case of produce such as coffee, vanilla, cloves and other commodities, we are not yet in a position to get things under control, particularly on the marketing side.

We also lack certain means, not so much in the area of human resources, but in capital goods and plant. This is exacerbated by the country's current inflationary climate, as is the case in all developing countries. Some 15 or 20 years ago, we had about 100 tractors in the Diego region. People were content and production was soaring. Nowadays, if you can count 20 or 30 tractors, that's a large number. People are no longer used to using tractors and they have abandoned their ploughs. Now they find that they must take them up again.

A third element which adds to our difficulties is the security situation and the crime rate. I am thinking here in particular of the Dahalo bandits who operate in the countryside. They have been killing people and have provoked a rural exodus from those areas that are most productive from the agricultural point of view. This phenomenon has grown in the last 15 or 16 years, to the extent that five Malagasy provinces are now affected, with only the province of Diego escaping.

· The way you describe the situation saggests, above all, a certain degree of political weakness. Do you think that the state is too weak? Also, the country has just had a referendum which has apparently strengthened your power. Does this mean that you have moved from the Third to the Fourth Republic in all but name?

- It's too early to speak of a Fourth Republic. We are still operating under the Third Republic, but I should say that things have not turned out entirely as I might have wished. Before the referendum, it was the National Assembly that appointed the Prime Minister and the President had no authority over domestic policies. It is true that as a result of the vote, this power was given to the people and I believe, God willing, that I am now in a position to guide the government. But as you so rightly say, there has been a degree of political weakness in that certain courageous political actions that should have been taken in a number fields, have not been taken.

Let me just mention a couple of examples which everyone knows about, and which have drawn criticism from the IMF and the World Bank. They have said that one of the reasons for the state deficit is the problem of corruption within government. They have also pointed to the weakness of successive governments in failing to take the necessary measures to recover the losses or punish offenders. It is a bad Malagasy habit to appeal to tradition in saying 'These are our friends and relations'. Another factor is the mentality of those in positions of authority. Even if a law exists, it is not always applied.

· You have accused senior people of corruption, going so far as to mention the former Prime Minister by name. Is the state going to prosecute him?

- I don't think we have reached that point yet. Investigations are currently proceeding but, in such cases, one has to be circumspect in the language we use and the things we say. However, we will certainly be taking measures against anyone committing serious crimes of this nature. They are partly responsible for the state of poverty in which our country now finds itself.

· You could have taken advantage of the aftermath of this national tragedy to reunite your country. But people are talking about a UNDD government, formed by your party.

- I don't believe that it's fair to speak simply of a UNDD administration. There are only about six UNDD members, by which I mean actual members or people close to the party, in the government. If you look at it in terms of the number of newcomers holding office, the criticism is, perhaps, valid. In my opinion, however, it isn't necessarily the newcomers who get the job done. The Prime Minister originally intended to form his government only after the final results were in from the territorial elections, so that he could be more confident of the political will of the country. The idea was to leave the members of the former government to settle matters currently in hand. But it was risky to leave the government in the hands of our opponents for two or three months. You spoke earlier about political weakness. Well just before the old government resigned, some ministers leapt at the chance to empty the coffers as much as they could, by buying furniture.

Another point is that the new Prime Minister wanted to continue negotiations with the donors the World Bank and the IMF - without a break. I believe that is one of the reasons why he chose people already well acquainted with the subject and who were therefore part of the former government. From what he has told me, I don't believe that what we have at present is the definitive government line-up. Once agreement has been reached with the World Bank and the IMF, the government may well be consolidated.

· As regards financial policies, isn't there the risk that subsidies for staple commodities and other types of intervention will obstnact agreement with the World Bank and the IMF? It is said that some of your closest associates, such as Mr Andriamanjeto, the President of the National Assembly, is unenthusiastic about an agreement.

- No, I don't see that as a problem. Nor do I think that the President of the Assembly or those close to him oppose negotiations with the Bretton Woods institutions. All he said was that the financing provided by our traditional sponsors would be insufficient, if we wanted to relaunch our economy fairly quickly, and that we also ought to be given the opportunity to approach some private sources of financing, as a back-up. The opposition took advantage of this, saying that the government favours parallel financing, which is different from the idea he put forward and which 1, moreover, support.

In a country such as ours, liberalisation can lead to speculation if it is not regulated by healthy competition, as is the case in the developed countries. Private businesses which benefit from privatisation will not necessarily take account of the impact of this in the social sphere. You can see what a poor state the country is in, in areas like education and health. Look at the problems of our small farmers and the condition of our abattoirs. You know that we have lost part of our European beef quota because of, among other things, the lack of cattle vaccination. Progress has to be made in stages and each country needs a certain remedy, but there is no standard cure. As regards the financial system, I have just received a short IMF report on the interbank currency market. What they say ties in exactly with my line of thought. They are critical of speculation and the fact that the profits from exchange transactions do not come into the country but go outside.

· You have summarised your guiding principles as follows: security, economic recovery and good management What do you plan to do during your mandate to achieve your goals?

- Security is my top priority because it impedes investment, particularly on the part of those involved in agriculture and stock-breeding. In conjunction with regional leaders, we are going to set up systems for making the countryside more secure, involving supplementary police units in 'red' areas. We also plan to organise mobile detachments. These will be civilians, volunteers for the most part, trained by the local community. They will be armed and backed up by the forces of law and order. The people we are going to train include many volunteers who have retired from different branches of the police force and former soldiers who have time on their hands. Unfortunately, some of the latter are sometimes attracted to the Dahalo groups. These mobile detachments will also assist local communities in maintaining public infrastructures. We will use some military equipment for certain public works and prisoners will also be mobilised, to stop them vegetating in jail. They will also be called upon in urban areas. It is worth remembering that they did some really useful work in colonial times.

As regards economic rehabilitation, we will do no more than tie in with the recommendations of the World Bank and the IMF in respect of tax income and the fight against corruption. But what we say to our international partners is this. You recommended that we should open up our economy, so we did. You recommended VAT, so we applied it. But the results have not been what you were expecting. I have bean told that it is up to us to apply the necessary measures. But if you take the case of VAT, we were told that the rate should be 25%. Togo introduced a rate of 7% for staple commodities and 18% for other produce. Why does Madagascar not have the same choice?
Interview by HG