Economy of Madagascar
The Madagascar's economy is currently characterized by reforms. The state invests primarily in the areas of education, health, rural development, roads, ports, airports and power supply.
Infrastructure
The infrastructure is funded by the World Bank, the European Union and the African Development Bank ( ADB).
The investment conditions as predictable administrative action, incorruptibility of decision-makers, legal security, access to credit, infrastructure and level of education are not yet in place. The government, however, tried to facilitate by an investment law the real estate acquisition and business visas and to attract investors. For this purpose also a focal point for investors ( EDBM ) was established.
Madagascar is a member of numerous industry organizations such as the International Monetary Fund, the World Bank, the World Trade Organization, and from 17 August 2005, the Southern African Development Community ( SADC).
Economic growth in Madagascar in 2007 was 6.3 percent; the inflation rate in the same year was 8.2 percent.
Economic growth is based on the textile and shrimp production as well as on tourism.
Generally, however, the economy remains vulnerable to economic shocks due to the low diversification.
While gross domestic product in 2006 increased by 4.7 percent, it rose in 2007 by 6.3 percent. The GDP in 2007 was 7.503 billion U.S. dollars, resulting in a gross domestic product of 370 U.S. dollars per capita. Even in 2006 the GDP per capita was 289 U.S. dollars. The state budget is based on 40 percent to donor services. The budget deficit in 2007 amounted to five percent.
The structural adjustment programs to improve government revenues are set by the IMF and the World Bank.
Madagascar reported success in reducing the national debt. While this was 4.8 billion U.S. dollars in 2003, it dropped to 1.9 billion U.S. dollars in 2007., The government adopted a national poverty reduction strategy, which runs from 2007 to 2012, and among other things, higher economic growth provides.
Agriculture
Agriculture represents 36% of gross domestic product by the services sector the most important industry dar. agriculture but mainly operated in Madagascar as a subsistence economy, which is mainly due to the difficulties in accessing the market. The Government therefore sees through the development program prior to the establishment of a competitive agro-industry. The country is the largest producer of vanilla and has next to it a strong market position in shrimp. Currently, experiments to obtain fuels from renewable resources. This includes biodiesel from Jatropha and bio-fuel from ethanol.
However, the country through the forest clearance from serious problems such as soil erosion. As a result, the MAP provides a protected forest area of six million hectares.
The Daewoo Logistics Corporation of South Korea has leased in Madagascar an area of 13,000 square kilometers for a period of 99 years to grow there in an industrial way corn and palm oil mainly for the production of biofuels. The Group seeks a similar project in Indonesia.
Mining and Industry
The industrial sector contributes 15 percent to the Gross Domestic Product of Madagascar, this is regarded as booster for the growth development. Currently, there are 102 companies with a total of 115,000 employees. The industry is confined almost exclusively to the textile sector.
The country has relatively abundant mineral resources, but these little used. To them mainly include titanium and nickel, also oil deposits are suspected in the Mozambique Channel. The Titan comes as ilmenite present in sands on the southeast coast and is degraded with heights investment of 585 million U.S. dollars since 2009 by QMM mining company, a subsidiary of Rio Tinto. For shipment of ore a new port ( Ehoala ) was built in Tolagnaro. Also, were at Manantenina, 110 km north discovered Tolagnaro bauxite deposits, plans to their degradation Rio Tinto Alcan. For the nickel mining in the east of the country, want Sherritt, Sumitomo Group, SNC Lavalin and Korea Resources invest 3.225 billion U.S. dollars. The difficult access iron ore deposit Soalala in the northwest of the country contains 800 million tons of ore, the Chinese company Wuhan Iron & Steel 2010 received licenses for mining the ore.
Foreign Trade
Madagascar mainly exported textiles, knitwear, vanilla and shrimp. The main customers are France and the United States. Main import goods are consumer goods and petroleum products, which here are the most important countries of France and China. Due to the rising world market prices in 2006 and 2007, Madagascar was able to increase its export revenue and reduce the trade deficit.