Scramble for Madagascar: "They will come!"

That is the word of Marc Ravalomanana, president of this island nation off the coast of Mozambique. It is also the word of Wanda Nesbitt, U.S. Ambassador to Madagascar.

"A lot of types of business can come here," Ravalomanana said in a July 5 interview with Africanews and Catholic Relief Services (CRS). "On the 26th of July, we will make a big conference in Paris and we'll call all the businessmen around the world with the World Bank, the European Union, and American business. They will come!"

"A potential source of revenue is the gemstone industry," Nesbitt told Africanews and CRS on July 1. In general, "investors and companies will decide what level of production they are willing to undertake at this time."

Events have been taking place at a dizzying pace in Madagascar from the last week of June and in the first couple of weeks of July. First, during Madagascar's Independence Day celebrations held on June 26, the United States government officially recognized that Marc Ravalomanana was, indeed, the president of Madagascar and his government was legitimate.

France followed suit on July 3. Reportedly, France was willing to give its endorsement only if it could be the exclusive business partner of Madagascar, but dropped that requirement and gave its unconditional support. Other countries such as Germany also scrambled in line.

Then, in a stunning development, former president Didier Ratsiraka, who had ruled Madagascar with an iron fist since 1975 and had refused to let go of power until the very end, fled into exile to Seychelles.

U.S. recognition was a tremendous coup for the Malagasy people. For months, they had been subjected to road and port blockades, bridges and power plants being blown up, armed attacks, and other terrorist activities carried out by Ratsiraka and his supporters. The attacks were, in large part, meant to isolate Madagascar's capital, Antananarivo.

According to the Madagascar's High Constitutional Court (HCC), Ravalomanana, former Mayor of Antananarivo, captured 46.25 percent of the popular vote in Madagascar's December 16, 2001 election, while Ratsiraka captured 40.89 percent of the vote.

There was supposed to be a run-off election between Ravalomanana and Ratsiraka. But that never happened. Instead, each has declared himself president of Madagascar, with disastrous results.

While Ratsiraka was blockading the country and destroying key infrastructure as he refused to recognise election results, an estimated one million people took to the capital's streets during a two-month general strike - in February and March - in support of Ravalomanana.

The effects of the blockade and general strike have been devastating. According to a June 19 report from the World Food Programme, malnutrition levels among children under five years have risen up to 45 percent because of the crisis.

Rice, the staple food of the Malagasy people, has increased by 375 percent, "pushing it beyond the reach of many families," it says. The WFP is currently distributing emergency food aid to some 35,000 malnourished children in urban centres across Madagascar. Catholic Relief Services (CRS) is one of the WFP's implementing partners and is also conducting supplementary feeding and distribution of food aid all across the country.

And, the UN Office of the Resident Coordinator estimates that the economic growth rate for the Malagasy economy will be minus 10 percent for this year, assuming the ports and roads are open within the next few weeks. The poverty rate is expected to increase up to 60 percent from its pre-crisis level of 42.6 percent.

The price of fuel has skyrocketed from US$0.46 per litre in December to up to US$3.50 today. In fact, gas stations were literally closed for four months. Gas stations finally opened at the end of June, and are usually operational once a week. Up to 500 cars line up far in advance of when the gas stations open. The locations of gas stations that are open are announced on the radio. Each car takes a number and is allowed a maximum of 17 litres of gasoline.

Since March, almost 140,000 people out of an estimated active workforce of 550,000 in Antananarivo have been laid off, says the UN report. And that does not include secondary jobs that largely depend on those primary jobs. Medical facilities are dangerously run down, and most schools were closed during the height of the crisis, says the report.

Claudia Razafindrakoto knows this reality all too well. These days, a good number of students are tired and hungry. Many can no longer afford to eat lunch because of the soaring food and fuel prices. And those who live far from the Jesuit-run school now have to walk, since fuel has become an expensive, almost non-existent luxury.

St. Michel Amparibe School itself was closed from the middle of February until the end of March, during the height of the Antananarivo protests, says Razafindrakoto, who is an assistant director there. The school has a total of 2,000 students from primary school to pre-university/technical training.

"They [the demonstrators] interpreted that if you work, you are with the former president [Ratsiraka]. We were obliged to close the school for the security of our students," says Razafindrakoto, adding that the noise and chaos of passers-by had also made it impossible for her students to concentrate.

The social and economic crisis has taken its toll on St. Michel School. Because of the lost six weeks, the school term will be extended by one month, cutting into the students' vacation time, says Razafindrakoto. Discipline problems are on the increase because students are restless, she explains.

However, now that Ratsiraka is gone, it is only a matter of time before gasoline and other supplies increase, prices decrease, people go back to work, and life gets back to normal.

For both Ravalomanana and Nesbitt, the key to getting Madagascar back on its feet is to attract foreign investment - U.S. investment, they say between the lines. Ravalomanana told Africanews and CRS that "for the Americans, they are interested in mining," and predicts that U.S. business will invest $1 billion in Madagascar.

He also expects the Gap and other American textile and companies to set up, or re-set up, operations there. "I called some experts from America to help me. I asked some advisers on the management of the country [to come on the 20th of this month [July]]," he told Africanews.

"Political stability is one of the first things investors look for," said Nesbitt. She said that she does not know how businesspeople will react to the U.S.'s endorsement of the Ravalomanana government. She said one potential source of revenue for Madagascar would be gemstone mining and the regulation of the gemstone trade.

As for the timing of the U.S.'s recognition of the Ravalomanana government, Nesbitt said that it became clear to the U.S. that Ravalomanana was the legitimate winner of the election only at the end of April. (On 29 April, the High Constitutional Court declared opposition candidate Marc Ravalomanana the outright winner of the disputed presidential elections).

"In January, neither party had won, according to the HCC," she said. "The U.S. was not in a position to second-guess the ruling. The United States has never had a preferred candidate. Our position has been to support a democratic process."

Nesbitt would not say what interest Madagascar holds for the United States. She did say that, before the crisis, "Madagascar was unique in Africa for how well it was doing under AGOA [the Africa Growth and Opportunities Act]."

Nesbitt says that Madagascar has what it takes to make it. "We're always looking for success stories," she said. "Our priorities have always been to try to assist in reducing poverty and encouraging investment."

How that investment will resolve the mess left behind by the crisis and resolve poverty in Madagascar in general is something that remains to be seen in the coming months.