Madagascar: A Greek Tragedy That Will Hurt Investment

FACEBOOK | 19 March 2009

Stephen Hayes
US Corporate Council on Africa

Deposed President Marc Ravalomanana brought the house of Madagascar down upon himself. But he has been replaced by a young untested leader who, although he has some public support, is full of himself and clearly contemptuous of democratic institutions. The result is that investment in Madagascar, and perhaps across the continent, will be hurt, writes Stephen Hayes, president and chief executive officer of the Corporate Council on Africa, which represents American businesses operating in the continent.

It did not have to be so. Watching the tenure of President Marc Ravalomanana of Madagascar come to an end resembled seeing a ball of twine unravel as it rolled unimpeded down a slope. Or to use another metaphor, like watching a Greek tragedy in all its acts, the central figure a president-king who became blind to the hopes of his people, and deaf to those who tried to tell him that his constituents were restive and he was in trouble.

No less than Kofi Annan, the former secretary-general of the United Nations, had tried to talk to him and bring the parties together. He was rebuffed. The U.S. ambassador had tried on many occasions to make the case to the president, but he, too, went unheeded, to the point that during a week-long visit to Madagascar recently, I was asked to share my observations with the president. He did not want to listen – each point that questioned what might be happening around him was deflected and he returned the conversation to what he wanted to achieve for Madagascar.

In hindsight, I wish I would have been more direct. I did not doubt his dreams for the future – only the reality of his view of the present. He trusted his ego more than his intellect or his friends and brought the house of Madagascar down upon himself. On the one side were his enemies who, although they were unable to move at the most popular moments of his presidency, were quick to drive him to the precipice when his thirst for greater wealth and fame possessed him. On the other, there were the sycophants around him, domestically and internationally, who could see little wrong and told him how great he was lest they lose favor and access.

What could have been will now never be and the man who had everything to gain will have lost everything, possibly even the business he had legitimately built before becoming president.

So, yes, President Ravalomanana, a freely-elected and re-elected president, who entered office offering such great hope to his expectant people, made some very bad choices in his role as leader of Madagascar. But this is not unique to Africa; one need look no further than our own U.S. shores to see this.

I find it strange that the laws of Madagascar would allow a president to retain his business empire (managed by his wife) while he served the nation, but that is, in fact, a part of the reality of Madagascar, and President Ravalomanana refused to separate his business interests from the presidency. Especially after his re-election, he used his office to consolidate a near-monopoly of the dairy industry of the entire nation. He also began to build an empire in tourism, one of the most important sectors in the economy. The largest hotel being built, by the Chinese, was the president’s hotel, to be ready for the annual meeting of the African Union in July. For the people of his nation, it was hard to see the benefits from this.

Yet Ravalomanana was a vast improvement on his predecessor, who had ruled for more than two decades with a clenched fist and the help of North Korea. As one businessman told me, “Before Ravalomanana there was Ali Baba and the 40 thieves. Now we only have Ali Baba. Life is much better and economic development is possible for so many.” Corruption declined significantly during the Ravalomanana years, though the terms of business deals sometimes became more difficult for some long-established businesses as well as for potential new investors.

The tipping point, however, was likely his decision to virtually give a massive amount of land to a foreign company, DaeWoo, on which to develop agriculture for purposes of export. Most people in Madagascar depend on agriculture for their existence. Everywhere they create rice paddies, at the expense of unique flora and fauna; if the rice fields were to fail, there would be massive starvation in one of the poorest countries in the world.

Land possession is exactly that in Madagascar. Whoever can use the land owns it, so access to it is key to many a family. To watch prime land being given away to a foreign corporate giant was even more infuriating to a Malagasy than the current scandal over bonuses paid to staff of AIG, the insurance company, is to the average American.

The president tried to say the deal was not done, but the deal, whatever it was, was never completely revealed nor negated, and the image of a giant giveaway, whatever the facts prove to be, remained. However well-intentioned it may have been to lure DaeWoo to Madagascar for investment, it was communicated to the public extremely poorly. The president had given his opponents their opportunity.

As his tenure moved to its end, Ravalomanana’s approval rating may have been even lower than George Bush’s nadir in his presidency. It seemed highly unlikely that he would have been re-elected and virtually certain that there would be a new president at the next election, still a few years away.

His enemies, publicly personified by Andry Rajoelina, then the mayor of Antananarivo and now the head of government, saw the sea of discontent, just as a hungry lion sees a weakened prey, and went for the kill. Why wait for the people to decide when you could become the new president now?

Rajoelina called for the president’s removal, and found a receptive but far from unanimous audience, and the president continued to make poor decisions. Ravalomanana refused a dialogue, removed the mayor from his position, and continued to fail to listen to those trying to save the presidency. When his presidential guard shot and killed more than two dozen demonstrators, he lost the support of an important part of the military and some undetermined percentage of the population.

Perhaps at that point, the events became, as the New York Times put it, “irreversible.” Ravalomanana might have avoided what has now happened, had he turned his power over to the president of the Senate, as he constitutionally could have done. Sadly, and as ironically as in any Greek tragedy, the prime minister had resigned after losing faith in him and the Senate president was a 100-percent Ravalomanana creation, leaving no credible successor. There was no longer any power in Marc Ravalomanana’s presidency, and those who distrust democracy filled the power vacuum.

Unfortunately, a lot more may be lost to Madagascar than the presidency and a genuinely free and fair election. The voice of the people is once again secondary to the interests of the few. A young untested new leader, albeit with some public support, full of himself, and clearly contemptuous of democratic institutions, has been put in place only with the blessing of the military, albeit a military that had apparently been resistant to intervention until the situation was clearly irreversible.

There can be no doubt that business investment, so promoted by President Ravalomanana, will be hurt, and so, too, may investment in other parts of Africa. We can plead for investment in Africa, but who will put their own money and time into a nation whose leader is impetuous and unpredictable and whose laws can be changed overnight by another coup, or upon the whims of an autocrat? Who will take the time to discern the difference between Madagascar and nearby Mozambique, where investment is prospering and governance is rapidly improving?

For the United States, the removal of President Ravalomanana will be viewed by some as a major setback. Madagascar was the first nation to receive the Millennium Challenge Account compact that awarded $110 million to address issues of infrastructure and, ironically, land reform. The critics of MCC in Congress will surely step up their questions. This is a major setback for new progressive and innovative policy initiatives such as the Millennium Challenge Act.

As we often do in the United States, we praised Ravalomanana and placed him on a pedestal, promoting him as a great leader of Africa – just as we have so many others. He was a primary speaker in our own Corporate Council biennial U.S-Africa business summit in 2005. We too gave him nothing but praise. Perhaps we should have been far more circumspect, and at least acknowledged the human condition in all of us, especially in those we choose to lead us.

The events in Madagascar have embarrassed many in Africa, once again contributing to the view of some that the continent is not capable of self-governance, despite the proof otherwise in so many nations on the continent. It now presents a challenge to the African Union, and the skeptics wait to see how a very complex situation will be handled.

And ultimately, Madagascar is economically crippled. There will likely be little new investment except perhaps by the supporters of the coup. Tourism numbers have already plummeted precipitously. The international community may apply some sanctions or penalties until free elections are restored but that remains to be seen. Sanctions may make us feel good, but the first people that are generally hurt are the poor, not those at whom they are aimed.

The situation is a complex one that requires some patience before we act. Unfortunately, that same advice is what I would give businesses. Be patient before you invest in Madagascar. The story is not yet over.

The Corporate Council on Africa (CCA) promotes American private sector engagement with the nations of Africa. Based in Washington DC, it is a non-profit, non-government, non-partisan organization with a membership of more than 165 American companies.
Original source: AllAfrica


  1. Kelly Brown
    13 Jun 2009

    I really like your post. Does it copyright protected?

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