De l’eau, du riz et du carburant, la rétro économique du mois

Water supply, rice exports and fuel costs: the local economic headlines of the month

Strike within the JIRAMA opposing the decentralization and likely privatization of Antananarivo city’s water supply facilities, steep and uncontrolled fuel cost rises imposed by distributors, slow recovery of rice exports, the details of Madagascar’s economic news in August 2012 coming next.

JIRAMA, the decentralization of the water management system put on ice

The water and electricity supplying company’s employees have won a battle. The HAT’s presidency was compelled to call a halt on the decision to put the management of water supply networks in Antananarivo city in charge of communal authorities. The political step back mainly aims at doing away with the inconvenient strike. Ambohitsorohitra did concede, as wanted by the striking side, that a transitional power is basically no competent authority allowed to impose highly relevant decisions.

Antananarivo city’s urban leadership does however not concede any total victory at all. The HAT might have suffered a setback, but it keeps its eye on its project. The City Hall openly blames the JIRAMA company’s struggle to meet the population’s needs. Some 1,200 public water pumps have been installed over the past 25 years. This is largely enough although merely 70,000 families out of 500,000 can access drinking water on a daily basis at home.

The Urban authority expressed its doubts about the water supplying company’s capacity to yield US$ 30 million to finance the investments needed to renew and expand Antananarivo city’s network. On the other hand, the JIRAMA denounced a trick deemed to lead to the privatization of the whole company, “cheaply sold out just as the phone line company TELMA and the railway company CNCFM were “. According to the strikers, the City Hall’s leadership already launched calls for biding, and specially favors foreign companies.

Madagascar’s rice exports do resume, do they?

The resumption of rice export is actually symbolic, merely a hallmark of Madagascar’s orientation into the production of top quality organic rice. A farmers’ association will export 60 tonnes of rice to the United States. There is a variety of biologically originated rice. The project is a matter of mobilization campaign for Malagasy farmers so that they start to grow rice without using traditional chemical fertilizers. In addition to this, turnovers happen to be seducing. A price of 10 Ariary per kg would actually be 10 times more expensive than the local market course.

“We are going to penetrate foreign markets thanks to these biological rice varieties of such a quality “declared an Agriculture ministry official.”Red rice” cannot expect to be through custom services, in the case you expect to bring some Vary Gasy to relatives living in the United States. The situation is different in France. Even better, Malagasy producers will be exporting one ton of rice every quarter a year.

As earlier confirmed, the whole operation is merely serving promotional purposes for the time being. It mainly targets Malagasy consumers located abroad, whose demand of “vary gasy mena” (red Malagasy rice) is genuine. The Ministry still has to reach the national self-sufficiency prior to tackling rice exports abroad, somehow within a couple of years from now. In 2012, rice has not yet been massively imported. The first harvest or “vary aloha” proved enough to supply the local national market.

Suppliers challenging ruling power. The stake: fuel costs

The supplying company TOTAL took the lead, and rose its fuel consuming prices. The ruling power reacted into summoning the company to recover former prices, and the supplier stubbornly kept holding on. TOTAL is no more fighting on its own; it has now been entitled to reinforcement since SHELL decided to emulate and eject the ruling power’s orders. Meanwhile, consumers have to endure, as per usual. How long are they bound to do so?

“The talks are not over yet; we can still put a wide range of offers on the table, such as an exceptional exchange rate that companies would enjoy when purchasing their stocks with foreign currency,” reassured the Transitional Finance Minister. The ruling power subsidized oil companies with some 50 billions of ariary in 2010 and MGA 15 billions in 2011. Everything got tense in 2012, since the system seemed to have reached its limits. Keeping fuel prices under control in order to avoid inconvenient side effects over the inflation rate” was, is and remains paramount for the current ruling power. But the international market’s fluctuations are very much likely to bring the whole of its policy down.