IMF AFRICA DIRECTOR LAUDS MALAGASY ECONOMY

UNCLAS ANTANANARIVO 000852 SIPDIS SENSITIVE SIPDIS DEPT FOR AF/E AND EB PARIS FOR D'ELIA E.O. 12958: N/A TAGS: EFIN ECON PGOV EAID MA SUBJECT: IMF AFRICA DIRECTOR LAUDS MALAGASY ECONOMY ¶1. (U) International Monetary Fund Africa Director Bio-Tchane met President Marc Ravalomanana August 22 for consultations on Madagascar's economic management and performance. Bio-Tchane also held meetings with Minister of Finance Radavidson, Central Bank Governor Rasamoely, and private sector representatives. In a public statement, Bio-Tchane said he was satisfied with Madagascar's economic indicators. He noted in particular that the arrival of major mining investors, the fall in inflation, and the appreciation of the local currency constitute fundamental pillars on which to build the future. According to the IMF and GOM forecasts, average inflation rates should be single digit by the end of 2007 and real GDP growth close to seven percent. ¶2. (U) Bio-Tchane reportedly encouraged the President to continue to implement the IMF-approved economic reform program, to preserve macroeconomic stability, and to improve management of the public finance. The IMF Africa Director called for improvements in several areas, including infrastructure, energy, and private sector development. He also called on the GOM to provide the population with better health, education, and sanitation services. Bio-Tchane affirmed the IMF's Poverty Reduction and Growth Facility and technical advisors will support the Madagascar Action Plan. ¶3. (SBU) COMMENT: The media reports cordial meetings between Bio-Tchane and Ravalomanana, so it would appear the IMF has accepted the President's tax amnesty announced earlier this year. The IMF Africa Director reportedly pushed the President and Finance Minister to improve tax performance (dismal at 10 percent of GDP),but seems to have avoided the issue of Madagascar's top tax evader - the President's own TIKO corporation. END COMMENT. MARQUARDT