Resource information
The objective of this study is to
accompany Malagasy authorities in their transition towards
economic emergence. If the contribution of foreign capital
and the abundance of natural resources should help the
Malagasy economy escape from the poverty trap by increasing
its domestic savings and investment capacities, as well as
its technological capacities. International experience
reminds us that this transition is far from being automatic.
Indeed, there are more examples of countries that have
failed than of those who have succeeded. The successes of
Chile, Tunisia, Malaysia, Mauritius, and Botswana can
inspire the Malagasy policy makers while showing them which
economic policy choices become imperative. This study is
divided into four parts. The first part begins with an
analysis of Madagascar's economic performance, trying
to recall its fragility in spite of the good results
recorded over these last few years. This fragility will be
highlighted through the relatively narrow basis of the
economic growth that has greatly relied on foreign capital
inflows, putting the need to follow an adequate foreign
exchange management policy at the center of the agenda and,
thus, minimize its possible negative impact on exports. The
second part will focus on the issue of private sector
promotion. Recent diagnoses of Madagascar's economy and
the strategy adopted by Malagasy authorities (with the
support of its development partners) have shown that to be
sustained and shared out over time, economic growth will
have to rely on a dynamic and competitive private sector.
The third part is dedicated to sharing the fruits of
economic growth by giving a special emphasis to the
distribution of the benefits related to the large mining and
tourism investment projects within the population. These
large projects represent a unique opportunity for
Madagascar's development but also undoubtedly a danger
if they do not allow the emergence of spillover effects
among the local businesses and labor force. Finally, the
fourth and final part proposes an agenda of economic
reforms. Ambition is not to formulate a patchy list of
proposals, but rather to propose a series of options that
will help address the issues of competitiveness and shared
growth that are central to the success of the current
strategy followed by the Malagasy authorities.
