Daewoo weighs risk in Madagascar

Yonhap | February 12, 2009

Daewoo Logistics Corp. expressed wariness yesterday over growing political unrest in Madagascar and hoped that the situation would not affect a massive farm project it is pushing in the Indian Ocean nation.

“It may be a bit of a dangerous investment,” Shin Dong-hyun, a Daewoo Logistics official, told Yonhap News Agency, commenting on spreading anti-government protests in Madagascar. “We hope the situation will get better in the near future.”

The Korean shipping company is pushing to farm corn on an area half the size of Belgium for 99 years in return for investments in labor and infrastructure but has not received full government approval. Shin, who supervises the project at Daewoo, said his company has completed and submitted all necessary surveys to the Madagascar authorities.

Violent anti-government protests have swept through the country’s capital of Antananarivo in recent days. Security forces fired into a crowd of street protesters over the weekend, killing 28 people.

Shin denied that Daewoo’s farm project in Madagascar is linked in any way to the unrest, but foreign news outlets such as the BBC and the New York Times have suggested that the turmoil is at least partially due to Daewoo’s proposal. The two media outlets cited growing unrest among the country’s agricultural poor, who see the Daewoo deal as a “betrayal” by their government.

“I don’t think the political turbulence is related to this project,” Shin said. “The news reports were a lie.”

Asked whether Daewoo was comfortable doing business with a government that has killed protesters, Shin said the deal is not being exclusively made with Madagascar’s incumbent government and stressed that his company will pursue the project with whomever is in power.

“If they want economic development in Madagascar, I think they will need this project,” Shin said, rejecting the notion that the deal is “neo-colonial,” as suggested by its critics.

Shin said the farm project is a commercial deal based on profitability but stressed that it is also beneficial to Madagascar, a poor nation eager to develop its economy.

He said the aim of the project is not to boost Korea’s food security.

“We will follow where we can maximize the profit,” Shin said, whether that lies in reselling produce in Madagascar or in other international markets, including Seoul.

Shin acknowledged that the falling international prices of grain are making the Daewoo project in Madagascar less attractive.
Original source: Yonhap

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