ANTANANARIVO POL/ECON WEEKLY UPDATE (10/02/2009)

UNCLAS SECTION 01 OF 02 ANTANANARIVO 000697 SENSITIVE SIPDIS DEPARTMENT FOR AF/E - MBEYZEROV AND FOR OES/ENV DOC FOR RTELCHIN TREASURY FOR FBOYE PARIS FOR WBAIN LONDON FOR PLORD E.O. 12958: N/A TAGS: PGOV PREL ECON MA SUBJECT: ANTANANARIVO POL/ECON WEEKLY UPDATE (10/02/2009) REF: A) ANTANANARIVO 692 B) ANTANANARIVO 693 ¶1. (U) SUMMARY: This is U.S. Embassy Antananarivo's Weekly Update for September 28 - October 2, an unclassified review of major political, economic, and commercial events and information from the U.S. Mission to Madagascar and the Comoros. POLITICAL (paras 2-4) - Rajoelina's Return from UNGA - Political Demonstrations - Human Rights Working Group on Media ECONOMIC AND COMMERCIAL (paras 5-8) - Local Chamber of Commerce Concerned About AGOA - Precious Wood Under Assault - Automotive Fair - Shipping Dispute END SUMMARY -------------- POLITICS -------------- ¶2. (SBU) RAJOELINA'S RETURN FROM UNGA: Rajoelina spoke to the press upon his arrival Sept 30 after the controversial ban from speaking at UNGA (ref A) and a four-day stay in Paris. He stated that while considered a failure, his attendance at the UNGA can be seen as a success in that his presence - as the accepted Malagasy Head of State - did not leave Madagascar's UN seat empty, and he could still represent the country and the Malagasy people by signing several international agreements. He denounced lobbying by an "ill-intentioned Malagasy rich man" (a likely reference to Ravalomanana) who used his money to lobby against the HAT leaders, which according to TGV has resulted in the loss of aid to the Malagasy people. He further stated that the UNGA ban was not really an action by SADC as a whole, but mainly a maneuver by some African leaders who fear that what happened in Madagascar - that Malagasy people could "overthrow dictatorship" - could be taken as a model by various African opposition movements. He ended his remarks by saying that a rapid organization of elections is the only solution to the current crisis. He is rumored to have met with opposition leader Zafy Albert Oct 1 to discuss a resolution of the political crisis. ¶3. (SBU) POLITICAL DEMONSTRATIONS: Around 500 supporters of the three opposition entities attempted to hold a gathering to discuss the Maputo agreements at a downtown stadium Sept 26, despite authorization only being granted by the city to meet at a stadium on the outskirts of town (too far for most who come on foot). The �0A;demonstrators clashed with law enforcement, resulting in eight injured, including one woman shot by a "drunken military element," and 17 arrests. One woman, arrested after having insulted the law enforcement officers, has been released. Law enforcement has blamed the demonstrators for not respecting the terms of the city's permit, while the three entities have condemned the fact that law enforcement is still being used as a force of repression. City officials have decreed that political demonstrations are banned in the capital until further notice, but the opposition have renewed their request to hold a meeting at the downtown stadium this Saturday, Oct 3. ¶4. (U) HUMAN RIGHTS WORKING GROUP ON MEDIA: Post hosted its monthly Human Rights Working Group on September 30, which featured two speakers on the role of the media during the current political crisis and in repairing the social fabric. The speakers pointed out that Malagasy media are often biased because some journalists are paid and corrupted by politicians. Politicians view reporters as adversaries if they refuse payment for promoting a one-sided point of view and subsequently deny them access to information, while some journalists race to publish news stories without verifying their accuracy. Almost one hundred participants from NGOs, international organizations, embassies, universities, and the media participated actively in Q&A and debate following the speeches. -------------- ECONOMIC AND COMMERCIAL -------------- ¶5. (SBU) LOCAL CHAMBER CONCERNED ABOUT AGOA: The director general of the Chamber of Commerce of Antananarivo told Emboff Oct 1 that the Chamber was considering sending a delegation of businessmen and ANTANANARI 00000697 002 OF 002 workers to the U.S. to meet with the U.S. Chamber of Commerce and others to lobby for the continuation of AGOA benefits for Madagascar. Emboff encouraged him to pressure the Malagasy authorities to take prompt steps to implement the rule of law to avoid the massive unemployment and likely upheaval in the capital city that would follow the suspension of AGOA. Separately, Adidas representatives, who source from Madagascar, also expressed their concern regarding factory closures and job losses if AGOA were suspended. ¶6. (U) PRECIOUS WOOD UNDER ASSAULT: Following the rampant, illegal felling of precious wood in and around national parks in the North of Madagascar, the ministries of environment, finance, and commerce issued a decree on September 21 authorizing the export of precious woods that have already been cut through November 30. Around 13 operators have been authorized to export 25 containers each, but must in return pay Ar 72 million (USD 37,000) per container; Ar 60 Million will go to the public treasury and Ar 12 Million to a new fund "Action contre la Degradation de l'Environnement" (which does not yet have a legal existence and is unknown by the donor community). Some operators claim that this decree undermines the competitiveness of formal exporters, whereas it legalizes the smuggling from informal ones and will likely enrich current political leaders. In response to the decree, environmental NGOs are advocating an export ban on precious woods in order to stop the prevailing anarchy, including further illegal logging, and propose the creation of a national task force to prevent a worsening environmental disaster. According to a Global Witness report, much of the illegally-cut wood is making its way to Germany, China, and to the U.S. (through China). ¶7. (U) AUTOMOTIVE FAIR: The 2009 automotive fair will be held on October 1-4 at the international conference center of Ivato. This fair is organized by the GCAM (Groupement des concessionaires automobiles de Madagascar) grouping, the main distributor of vehicles in the country. Motorbike vendors, spare parts distributors, banks, and oil distributors will participate as well. ¶8. (U) SHIPPING DISPUTE: On September 11, Mediterranean Shipping Company (MSC) was sentenced to pay Ariary 615 million (USD 315,000) to a local company called Intertrade because the importing company, Saravana from India, refused to pay for the 14 tons of black pepper transported by MSC. MSC has accused Intertrade of swindling them and declared that the company might leave the country if it has to pay this fine. If MSC, and Maersk which is also facing legal harassment, both were to pull out of Madagascar, it could mean a halt of 80 percent of shipping in and out of the country (see ref B). MARQUARDT