AGOA: the Malagasy textile industry must recover its lost competitiveness

Washington was expecting reliable signs of effective democracy recovery prior to unlocking Madagascar’s access to the AGOA. The constitution of a new government and the rise of a new National Assembly added up to President Rajaonarimampianina’s political line to make the key evidences of Madagascar’s break with the year 2009’s putsch and transitional fallouts. However, freedom and human rights remain as inconvenient issues as they used to be.
With delays, the Malagasy side gets ready for this expected come back in January 2015. The ministerial department of Industry directs all the preparations to the upcoming recovery of the US American trade. Immediate changes are on schedule, namely concerning rules about tax free industrial zones as well as the rules of investment. Could the local trade rules of conduct fail to evolve by January 2015, attracting new investors to Madagascar will keep on proving as difficult as it already is.
According the operative director of the Union of Madagascar’s Industries, the textile production field has been surviving he country’ suspension from the AGOA deal, for instance thanks to its other markets in Europe and Asia. Factories shut their doors here 5 years ago and hit the road to more profitable locations. A mere 22 of them all did not survive the suspension of orders from the United States of America. The AGOA proves truly profitable since these orders actually provide a large number of persons with job, a number as significant as 200 000.
Newcomers as much as the victims of the year 2009’s putsch eventually attempted to recover their jobs, will all have to be trained before serving in factories. To this point, economic expert Adamason Solofonirina was adamant about “the central role of training in the textile industry field regarding the quite strict technical specifications drawn by the main importing countries. The flagrant lack of training facilities potentially able to cope with the sector’s requirements considerably hinders its expansion and undermines its productivity.” As a matter of fact, Madagascar’s competitiveness clearly suffers from the lack of qualified work force.
According to Adamason Solofonirina, economic consultant at the CREAM: “competitiveness is based on a couple of major components: factors costs and production factor efficiency. The major feature to global textile/clothing products trade routes with developing countries like Madagascar as starting point, is the regular supply of standardized products matching particularly strict technical specifications and high standard quality.” Investors are not remotely interested in low costs assets when the output happens to be just as low.