Sanctions

There are signs now that the United states are going to be imposing sanctions in the near future in Madagascar as a result of the actions of the Rajoelina government (creating his own transitional government and arresting opposition members). Karl Wycoff, the deputy assistant secretary of state for African affairs in the US says:

“We support a consensual and political solution, and we are completely opposed to the unilateral actions that the de facto regime has taken in recent weeks. We do not see that as a way forward for Madagascar.”

“Continued unilateral action and failure to find a mutually acceptable way forward could draw sanctions from the international community,”

This statement falls right in line with a communique from the from the recent SADC summit in Maputo that calls for a return to talks on the original Maputo agreements of August 2009:

“Summit rejects any attempt to use democratic means, institutions and processes to legitimise governments that came to power through unconstitutional means, and urges the international community, in particular the development partners, to support SADC’s efforts to promote and sustain democracy in the region in general and Madagascar in particular.”

This in many ways is a very good thing, because we can see a stand being taken by the SADC and US that they will not tolerate any of the games that Andry Rajoelina is playing. Once the US makes talks of taking action against a particular country, it is not uncommon that the rest of the world will follow suit. So not surprisingly, Andry Rajoelina doesn’t have a hope of continuing his disastrous rule of Madagascar.

But what of the sanctions? What does that mean for Madagascar? While not tolerating what the Rajoelina government is doing may be a good thing sanctions in addition to everything else that has happened to Madagascar certainly won’t be good for its economic health.

I found this blog entry from Jason Pbolete’s blog on April 29, 2009 that suggests some of the things that could be done to Madagascar should sanctions be laid upon the country:

The U.S. should seriously consider economic sanctions against the coup plotters and urge our allies in the region and Madagascar’s trading partners to do the same.  All leaders and government officials should be added to the Treasury Department, Office of Foreign Assets Control, specially designated nationals and blocked persons list.  Any assets held in U.S. back accounts should be frozen and access to the U.S. financial system blocked.   In addition, because the coup is inconsistent with U.S. policy and national security, as well as with provisions of the Foreign Assistance Act of 1961 as well as other U.S. economic assistance laws,  the Millennium Challenge Corporation should suspend all lending programs until this matter is resolved consistent with the laws of Madagascar and the MCC Compact.

It’s not to say that all or any of these things will happen, but if sanctions were to start you can expect that this would increasingly isolate Madagascar from the rest of the world and cause a country whose textile industry is or will be reeling from the loss of their AGOA benefits to continue to go down their economic downward spiral.

Despite sanctions and all other measure taken against the the illegal government of Madagascar, the government seems to expect 2.6% growth in its economy despite the fact that there was only a 0.6% growth in the economy last year. But rather than offering specific information on how they are going to grow the economy, the government states the following:

Private industry will drive economic growth this year, now that the “monopoly on economic activity” presided over by former President and businessman Marc Ravalomanana has been removed, Fienena said. “Now everyone can participate in the economy.”

Essentially saying that despite the annual growth that was occurring during Marc Ravalomanana’s tenure as president (7% in 2008), that he is somehow the reason behind the current economic crisis and things should get better from here. Below is a graph from  indexmundi.com on Madagascar’s growth through the years after the last political crisis:

Madagascar GDP

Madagascar GDP

It would seem that Rajoelina’s governments estimates are not based in reality and are only a weak effort in trying to convince the Malagasy and the world that they optimistic and doing well in Madagascar. But in my opinion, it is impossible for the Malagasy economy to grow at all, or at least significantly while he is running the government illegally. When they have lost all of their donor money (which accounts for a significant amount of the governmental budget), lost their tourism industry, lost the ability to export freely to the US (AGOA) and face the prospect of having sanctions laid against the government there is no possibility that they have any chance of growing the economy. In addition to that, there will be no new investments in the country, current investors must be on edge about what may happen to their businesses it is unlikely that the benefits for anyone would outweigh the risks to investing there. The analyst in the bloomberg.com story seems to agree stating:

“We have forecast the economy to grow by 0.1 percent in 2010,” Kissy Agyeman-Togobo, senior Africa analyst at London- based Global Insight, said in a telephone interview. “All the indicators show that the economy is in difficulty. Uncertainty over future political and investment developments leaves Madagascar’s short-term growth prospects subject to a large degree of risk, especially because of a lack of donor support.”

It makes one wonder why a Malagasy person would attempt to greedily maintain control of his own country while knowing how much it is hurting its progress and people.

At any rate it is good to see that the opposition within the country are keeping up their protests against the government and also calling for the return to the Maputo accord. Interestingly, the once pro-Ravalomanana movement has now become a conglomeration of all opposition movements and is now called “Madagasikara movement”. While I am still a Ravalomanana sympathizer, I can see the benefit of becoming a larger entity to fight against a common enemy.

However, the troubling thing is that according to the Cyber Observer’s blog, the entity has plans on taking matters into it’s own hands and attempting to implement the Maputo accord on their own by taking over ministries to install their ministers, not unlike what Rajoelina himself had attempted to do. Here is an excerpt from the blog:

If the Madagasikara movement really have the intention to take over the ministries in Anosy, we all can expect some “heavy clashes” between ralliers and security forces. According to some local journalists, such take over will occur this week…

If it is infact true, we will have a case of history repeating itself within a year. I sincerely hope that they do not try to do this as it can only mean more violence for the country. I can understand that the diplomatic methods of resolving the crisis with an illegal regime are stagnating and that one would want to take action if no one else is willing to… but Rajoelina has the army on his side and will most likely use them to restore order. I personally do not want to see any more bloodshed like what had happened last year, so hopefully it is still just a rumour.

At any rate though, it would seem that there is at least some progress in many fronts (US/SADC and Opposition parties). There is certainly a great deal of pressure on this illegal regime, so with any luck we will see them crack soon as they certainly can’t have many options left.

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