State Budget: tricky job without the financial backers

The de fact transitional authorities have been boasting to have made it without helps from financial backers for the year’s first six months. Would they be able to keep on doing so in such conditions for six more months? No way. The Roindefo government’s minister for economy estimates that the situation is going to worsen very quickly if economic sanctions are taken against Madagascar. The transition has quite a lot to lose. 

According to Fienena Richard, a confirmation of sanctions would make Madagascar lose amounts as high as 800 million dollars invested in development programs. These traditional financial backers might, at best, block the money flow, or definitely cancel the projects at worst. The minister for economy added, besides, that the country will not be entitled to other sources of backings. 

The State chess is almost empty, and the transitional government, in a critical estate. The austerity policy extolled by Roindefo still has to prove its efficiency as for some daily expenses. Only the cancellation of public investments in development projects allowed the state to recover cash. Six months later, one comes up to cruelly missing the financial backings. A civil servant in mission being indemnified with phone line credits or fuel tickets has become a common scene since the ministry is out of cash. 

Although tax returns have been announced as excellent as for this year, financial help suspension has left a big vacuum in the state budget. The European Union used to contribute to fill it up with its 38 million euros. The World Bank’s share of up to 70 million dollars used to be the most important. The BAD used to bring its 20 million DTS. The IMF also used to provide helps amounting to ten million dollars to stabilize the balance of payments. 

Support supposed to come from financial backers has been integrated in the law of finance. Its alteration could not be completed by the current transitional authorities. Help suspension has already entailed several development projects to be either put on stand by or simply cancelled 

“I am not keen on making hostages of the Malagasy people”, had declared Andry Rajoelina when he completed his U-turn as becoming willing to comply with the implementation of the Maputo I agreements. The president of the HAT has given in to good sense, following “patriotic” but little realistic speeches fighting the pressure from foreign backers for the setting up of a genuine national unity government. 

The TGV step back is considered as a betrayal by his allies eager to extract Madagascar out of from the financial backers’ sphere of influence. Andrianjaka Rajaonah, from the Otrikafo association, puts forward that it is possible to lead the country without the international community’s financial support. The voluntary economic policy, and the substantial monetary creation, has not convinced Andry Rajoelina.