Attracting major investors

CAPE, a business recovery support, and guidance committee, which unites private sector agencies, and the public authorities represented by the minister in charge of Industrialization, Arts, Crafts, and Private Sector Promotion, is ready, willing, and able to get to work. Following the successful Paris Conference held by the “Friends of Madagascar”, CAPE is concentrating on coming up with the appropriate strategies, ways, and means which will reinforce the newly regained confidence of the financial sponsors, and partners.

On July 6, 2002, the Committee welcomed and worked with unusual guests who were trying to uncover the problems which keep the Malagasy private sector from reaching its full potential. These American guests were special advisers recommended by the mayor of Baltimore, a long-time friend of President Ravalomanana. They learned that the difficulties we must overcome, and the problems we must solve are essentially two-fold: on one side, you find the usual financial hurdles, and on the other, the customs barriers, as well as an entire array of protectionist measures imposed by partner countries. We must recognize that, regardless our present progressive outlook, and our readiness to embrace globalization, foreign borders, and markets are protected by discriminatory measures. To cross many borders, merchandises must abide by certain regulations, and meet certain conditions of quality which hinder the free circulation of goods, and stifle exchanges. The Malagasy private sector does not encounter this type of problem at American borders because Madagascar was approved as one of the countries to receive preferential treatment under the Africa Bill or AGOA which covers close to 6,000 products of all kinds for exploitation, and exportation to the USA.

Financially, discussions revolved around interest rates, and financing terms. We already know that the recovery funds, and the lines of credit exist. What remains to be done is to determine the interest rates, and to define the length of time we allow the borrowers for repayment, under these circumstances, whether it may be short-term, medium-term, or long-term. Undoubtedly, as a guest of the Mayor of Baltimore, Minister Davida Rajaon has been in New York at the World Trade Center since July 7, 2002. His mission is to regain the confidence of American investors, and executives. Manandafy Rakotonirina, special adviser to President Ravalomanana, states that in view of America’s contribution to the program presented in Paris, on July 26, 2002, we can anticipate an increase in the number, and size of American investors, and executives who are interested in Madagascar. Additionally, we can also expect American financial establishments, such as Exim-Bank, or CityBank, to express their wish for a local presence, within the country.

No matter what happens, other confidence rebuilding missions, and marketing campaigns are in the works. The Island of Mauritius, whose leaders offered $11 million, is on the list. An investment forum is also scheduled in Paris, next October. Moreover, a special demonstration, called Madagascar Day, will take place in South Africa, next September. This will give us the opportunity to convince South Africans, and other Africans that Madagascar is determined to economically cooperate with COMESA member, and non-member countries, alike; another wink, and nod toward SADC. At home, investors will welcome the establishment of a “designated industrial zone”, between now and the end of this year, because it would virtually eliminate the procedural red-tape, and substantially facilitate their tasks.

Translated by J. F. Razanamiadana