This large Indian Ocean island currently has 19.6 million inhabitants on a surface area of 587 000 km2

Madagascar is one of the poorest countries in the world, ranking 150th in the 2004 UNDP Human Development Report. Its per capita income is about $ 290 and approximately 70 percent of the population lives below the poverty line. The prevalence of malnutrition in the country is high with 48 percent of children under five affected. The infant mortality rate is also high, reaching a rate of 84 per 1,000 live births. Education outlook is also poor, with a net primary school enrollment rate standing at 69 percent, and only just reaching 50 percent in rural areas. Population with sustainable access to improved sanitation is about 42 percent and only 15 percent have electricity connectivity.

The economy of Madagascar is mostly dominated by agriculture (70% of the population lives in rural areas), contributing nearly 30 percent to the GDP. The share of industry contributing towards the GDP is 14 percent (with the food industry, and the beverages industry as main sub-sectors), and services represent about 55 percent. During the period from 1994-2001, the economy of the country showed increasing growth trends; reaching an average of 6.0 percent per annum. These were however sharply reversed following the crisis period that began with the contested presidential elections of December 2002 which had serious repercussions on the country’s competitiveness, its financial situation and its economic and social infrastructure.

With the aim of reversing the economic decline, the new government implemented measures in various key areas (economic and political stability, structural reforms, etc) which helped the economic recovery of the country and a return to a path of growth. However, the economy has not yet found the path to growth – or at least to a sufficiently strong rate of growth – to enable it to create jobs and reduce poverty. The economy is still facing structural obstacles such as a weak productive base, high vulnerability to external shocks, lack of infrastructure and a poor level of human capital.

The Poverty Reduction Strategy Paper (PRSP)

Following a large and inclusive participatory process, the Government finalized its Poverty Reduction Strategy Paper (PRSP) in August 2003. The overall goal of the PRSP is to reduce the poverty rate by half in ten years, from 70 percent in 2003 to 35 percent in 2013. It will do so by focusing on three main axes based on the principle of public-private partnership:

  • restoring rule o f law and ensuring a well-governed society.
  • promoting economic growth with a large social base.
  • establishing human security and enlarging social protection.

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