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| Madagascar Government & Economy |
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Government
Under the terms of a new constitution adopted by popular referendum in August 1992, legislative power resides in a bicameral legislature, comprising a partially-elected Senate and fully-elected National Assembly, each of which has a four-year term. A Council of Ministers is appointed by the Prime Minister. The President is elected by popular vote for a five-year term. The Prime Minister is appointed by the President from a list of candidates nominated by the National Assembly. Executive power rests with the prime minister.
Economy
Madagascar’s mainly agricultural economy relies heavily on coffee production to earn foreign exchange, and this has suffered lately from a decline in world demand and prices. Vanilla, cloves, sisal, cocoa and butter beans are the island’s other important cash crops. Rice and cassava are produced primarily for domestic staple consumption. Fishing is underdeveloped thus far: the government, which still exercises extensive control over the economy, is hoping to improve its performance. The country has appreciable mineral deposits of chromium ore, bauxite and titanium ore, all of which are being exploited. The recent discovery of oil deposits is set to bring about further development as well as hopefully resolve Madagascar’s energy problems. 15 per cent of GDP derives from the manufacturing industry, mainly textiles and food processing. The service sector is relatively underdeveloped at present. |
The government has been looking at ways of developing the tourism industry, and has focused on the island’s abundance of exotic wildlife as a major attraction. Although the Madagascan economy has considerable potential, there are major problems to overcome. There is little that can be done about the climate; Madagascar suffers from frequent cyclones which have done severe damage to agriculture, especially in the last few years. More seriously, the political instability which has afflicted Madagascar throughout 2002 threatens to undermine the economy. In 2001, economic growth rose sharply from near zero to a healthy 6 per cent. The country continues to rely heavily on loans and grants from the EU (especially France) and the World Bank: these were among a consortium of donors which in July 2002 agreed a major aid package worth $2.3 billion over four years. France accounts for about 30 per cent of all Madagascar’s trade; the USA and the CIS are other important trading partners. |
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