Public finances, the great challenge of development

Although the system’s efficiency can hardly be debated about, its capitalization will, since good governance and fair management of state revenues for the sake of genuinely bringing available budgets to contribute to the alleviation of poverty and to economic development, happen to be first and foremost a matter of human reliability. Between 2003 and 2008, Madagascar was able to keep its budget deficit below the dangerous threshold of 5% of its GDP. This performance could not have been possible without support from foreign financial backers within the bounds of the International Monetary Fund’s Growth Poverty Reduction Terms program. Some national debts were deleted, international support granted, which all provided successive ruling powers with the ability to keep the Central Bank and its assets “beyond the deficit’s reach”.
Good governance during the transition happened to be a mere matter of restriction of government investment expenditures, which dropped by 30 % between 2008 and 2010. Only the compulsory spending on current goods and services, namely the unavoidable government consumption including civil servants’ wages and the payment of debts, were still met more or less decently. Hery Rajaonarimampianina, transitional chancellor of the chequer at the time, restricted internal loans on bond markets to a mere 14 % rise in 2009 and loans from the Central Bank to not more than 18%.
This financial management performance once extensively praised by the transitional leader had drawbacks of its own, just as extensively played down by the propaganda. During the transitional era the ruling power might have keeping the imbalance between its proper resources amounting to 12 % of GDP and the nation’s usual 60% of the GDP high government spending when the country used to receive foreign financial support stable. Still, when cutting short on its investment expenditures, the State was actually doing little more than turning its usual main growth engine off.
The national financial statement management related issue has not yet been settled. Military and political institutions used to be generously financed, not the least the transitional presidency of the Republic. The central transitional government gorged on nearly 95 % of the available budget, leaving but crumbs to investment expenditures dedicated to communities. Although funds were lively circulating between ministerial departments, their effect on the ground never reached 70%. The transitional financial statement failed from meeting capitalization, though basically leaving large freedom of action to the transitional power.
President Hery Rajaonarimampianina now has to restore order into this terrible mess, for this time around, the new State will be entitled to money to spend again. The Malagasy version of development system suffers from an endemic lack of management control. Leaders happen to be but rarely brought to account, and then consequently feel free to widely deviate from the standard line of conduct undercover of relatively certain impunity. No conceivable development program will have anything of a miracle because of the crucial need for IT hardware and as competent as reliable human resources. Madagascar has been regularly missing out on decisive take offs several times in a row, or failing to sustain successes so far. The near future will tell how it deals with this next opportunity to settle its score with failure.