To preserve the AGOA, the ultimate manoeuvre

During his journey to the United States for the United Nations’ meeting on the world financial crisis, the trade minister tried to start talks with Americans to defend Madagascar’s eligibility to the AGOA, the law on growth and economic opportunities in Africa. He also met industrial representatives of Madagascar who are concerned by a political situation susceptible to provoke economic sanctions. The uncertainty still remains and the situation could hardly be worse. 

In Madagascar, the tax free textile enterprises’ workers want to pressure the government of transition in order to find a quick solution. A petition is on its way. The suspension of Madagascar or the lack of orders for the first semester of 2010 is certainly going to drag the economic layoff. More than 100 000 jobs are threatened. Minister Fienena Richard admits that the problem is” political “. 

In principle, Madagascar is not more eligible to benefit from the opportunity to export textile products in the United States with advantages granted by the American government. It would be simply logical since Washington already suspended several financings and help programs after the Great Isle’s unconstitutional government change in March 2009. Local operators propose their help to the ministry even though the solution is first and foremost political.  

The decision should be taken by the beginning of August by the annual Forum of the AGOA beneficiaries that will take place in Nairobi. If it is unfavourable to Madagascar, the suspension won’t take effect before January 01st, 2010. It doesn’t mean that the government and the textile industry have six months to convince the American authorities. If suspension is pronounced, in August, the American customers won’t order as they generally do six months before the delivery. The removal of this suspension won’t prevent heavy economic consequences.   

To the best, could the political situation in Madagascar considerably evolve toward the return to constitutional order before the AGOA meeting, the country would remain eligible. To the worse, the country is suspended for at least one year as the agreement with the American government is efficient only on every January 01st. If the decision making is favourable but belated, according to the evolution of the political situation, the first semester 2010’s orders will be jeopardized. Technical unemployment will be then unavoidable