UNCLAS SECTION 01 OF 03 ANTANANARIVO 000723

SIPDIS

DEPT FOR G/TIP - RYOUSEY AND ALEMAR
DEPT FOR INL - EFLOOD
DEPT FOR AF/E - MBEYZEROV AND RMEYERS
DEPT FOR AF/RSA

SIPDIS

E.O. 12958: N/A
TAGS: PHUM KCRM SMIG ELAB EAID MA
SUBJECT: PROSPECTS AND PROSTITUTION IN MINING BOOM TOWN

REF: A) ANTANANARIVO 557 B) ANTANANARIVO 161


1. SUMMARY: As Qit Madagascar Minerals (QMM) ramps up its mining
activities in southeastern Madagascar, the former "ghost town" of
Fort Dauphin is rapidly changing. Embassy staff consulted local
officials and NGOs to assess the potential for human trafficking.
While it is clear "trafficking in persons" is not yet a part of the
public discourse or a significant problem, a number of related
economic and social issues were evident. The influx of money and
infrastructure development is accelerating activity throughout the
economy promising job creation in the long-term, but its immediate
effects include rising inflation and migration pressure. The
variables for increased trafficking are evident as residents are
forced to find alternative means of making ends meet; Post will
continue to monitor this dynamic situation as extraction-related
infrastructure comes online in 2009, bringing with it mobile workers
with money. END SUMMARY.

SETTING THE SCENE
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2. Madagascar's third major tourist hub, the city of Fort Dauphin
in the region of Anosy boasts approximately 550,000 inhabitants.
The struggling regional economy depends heavily on cassava, rice,
and sisal cultivation, but droughts coupled with flooding render
much of the area famine-prone. The result is cyclical patterns of
poverty and migration and some of the poorest health indicators in
the country. The percentage of the regional population living below
the poverty line is 82 percent, considerably worse than the
IMF-estimated national average of 69 percent. Eighty percent of
road networks are impassable most of the year, which contributes to
economic and social isolation and impairs access to health services
and markets. A biodiversity hotspot, Anosy's high population growth
and overwhelming poverty have contributed to serious environmental
degradation. The National HIV prevalence rate is still thankfully
low at 0.95 percent, although Madagascar has some of the highest
rates of sexually

transmitted infections (STI) in sub-Saharan
Africa. In Fort Dauphin, the 2005 surveillance showed a 7 percent
syphilis rate among pregnant women.

QMM's ARRIVAL
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3. QMM, a Malagasy subsidiary of the Quebec-based Rio Tinto group,
arrived in Fort Dauphin some 20 years ago seeking to mine ilmenite,
an ore used to produce titanium dioxide, primarily for use in paint.
For most of the intervening period global supply and demand kept
prices low and QMM chose to leave this massive resource unexploited.
After conducting numerous social and environmental impact
assessments, QMM finally launched its construction phase in January
2006; extraction will start in 2009. QMM's infusion of hundreds of
millions of dollars into road systems and the second largest deep
water port in the region has accelerated activity throughout the
economy, prompting a surge in demand for accommodation, restaurants,
local products, and even automated banking services. The long-term
benefits and potential for job creation are indisputable, yet a
number of social and economic problems are rapidly becoming
evident.

THE IMMEDIATE IMPACT
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4. QMM and its contractors have become the main employers in Fort
Dauphin. The construction phase has created 2,800 jobs within QMM
alone, with an expected 600 to 800 permanent jobs in the subsequent
mining phase. The vast majority will be hired locally and from
other parts of Madagascar. Despite the rumors that "foreign
contractors" are wreaking havoc on the town, only 5.4 percent of the
current workforce comes from abroad. The prospect of employment
opportunities has also prompted the inward migration of Malagasy
from throughout the country. The Mayor of Fort Dauphin bemoaned
that the majority of these latest arrivals lack the required skills,
creating a substantial unemployed population. The demand surplus
created by this influx of people and money has driven up the price
of housing and basic necessities. Poor road conditions prohibiting
the transport of food to the town's only market exacerbate the
problem by allowing sellers to set arbitrarily high prices.
Residents are being driven out by the rising inflation or forced to
find alternative ways of making ends meet. In terms of crime, the
Chief of the Regional Police Brigade noted a "deep change" in the
last two years with murder and rape incidents on the rise. This
mirrors an unexplained trend throughout the country of rising rape
incidents targeting adolescent girls.


5. Acutely aware in advance that development of the mine could have
negative impacts on the local population, QMM has teamed up with

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USAID, local government, and NGOs to mitigate the impact through
development of the economic sector, natural resource management and
conservation, health promotion and STI and HIV prevention, and the
development of regional education opportunities, with promising
results to date. It also imposes a strict Code of Conduct to keep
its workers on a tight leash.

SEX TRAFFICKING LOW BUT RISING
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6. Few public officials, NGO workers, or members of the general
public were familiar with the term "trafficking in persons." But
according to local NGOs, the number of sex workers in Fort Dauphin
has risen from 600 to 1,300 over the last two years. Women and
girls hearing stories of rich mining workers have come by the
busload from as far away as Diego Suarez on Madagascar's northern
coast. Local authorities, police, and NGOs believe most of these
young women prostitute themselves willingly and find their clients
on their own. However, local sex workers informed us this is only
true when the client is a Malagasy, which is usually the case. In
the rarer instances where the client is a foreigner, intermediaries
such as hotel receptionists, taxi drivers, tour guides, friends, and
family members are used to facilitate the transaction between the
two individuals in return for a percentage in cash or in kind. With
female prostitutes starting at the average age of 14 and male
prostitutes starting at the age of 16, it seems there is at least a
limited degree of underage sex trafficking occurring in Fort
Dauphin. A May 2007 survey of sex workers over the age of 18 found
that in 27.2 percent of the cases a third party facilitated the
sexual encounter; this figure suggests a similar situation for
minors.


7. Contacts noted an increase among adolescent and adult males
engaging in prostitution with foreign women and men. Local boys
told an NGO worker the going rate foreign males are willing to pay
for a "virgin" boy is USD 200 -- at half the average national per
capita annual income, such a sum could be enough to convince even
heterosexual adolescent males to submit.


8. Local contacts explained that sexual mores are more relaxed in
this part of the country. In the words of a local priest, "In the
Antanosy culture, virginity is not a gem to be kept." Contacts
described a traditional practice, still in vogue in Fort Dauphin,
where parents build their daughters a small house when they turn 14
to facilitate their sexual encounters with men -- a sign of their
social maturity. Adolescent girls and boys pursue foreigners,
whether for a night or longer, hoping to acquire cell phones and
nice clothes. Families openly encourage their daughters and sons to
meet a foreigner in the hopes they will marry and take care of the
family's financial situation. When homosexual prostitution sustains
the family, parents look the other way.


9. No contacts with whom we spoke had heard any reliable accounts
of labor trafficking in Fort Dauphin. One government official
wondered whether this will change once mining actually starts, not
in QMM sites themselves, but throughout Fort Dauphin as other
investors and workers arrive.


10. The Chief of the Regional Police Brigade explained they
received only two complaints of corruption of a minor in 2006.
Parents are either unaware of their rights or hesitant to turn in
the foreigners who sustain them, preferring to resolve cases
privately through financial payments. Instead, police action
against trafficking consists mainly of weekly nightclub raids and
awareness raising campaigns on the rights of minors. Four police
officers received U.S./UNICEF-funded training on the protection of
minors in May and established a regional Brigade of Morals and
Minors.

PROSPECTS FOR THE FUTURE?
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11. In the short-term, many locals will likely continue to believe
QMM's arrival has made their lives worse. Local government
officials lamented they had not undertaken measures earlier to
cushion the population from the shock of the economic boom: "We
should have known. QMM has been here for eighteen years, but we
never believed it would happen." Local leaders are seeking ways to
mitigate the impact of the (hopefully short-term) inflation, but
without the adequate tools, they seem to be "waiting on the
sidelines" hoping the completion of the roads and port will resolve
market access issues and open up more jobs.


12. COMMENT: In the past, Post has examined other parts of
Madagascar where sex trafficking takes place in the absence of large
scale economic development, employment and education opportunities

ANTANANARI 00000723 003 OF 003


(reftels). The concept of "human trafficking" has clearly not taken
hold in Fort Dauphin, which is to be expected in a place with a
seemingly limited problem. But as one of the few cities in
Madagascar with rapidly developing economic opportunities it merits
continued monitoring. The construction phase of QMM's activities is
fueling local expectations of long-term benefits, but only time will
tell whether they will come to fruition, and at what social costs.
END COMMENT.

SIBLEY