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

UNCLAS SECTION 01 OF 02 ANTANANARIVO 000697

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SIPDIS

DEPARTMENT FOR AF/E - MBEYZEROV AND FOR OES/ENV
DOC FOR RTELCHIN
TREASURY FOR FBOYE
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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

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POLITICS
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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
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.

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ECONOMIC AND COMMERCIAL
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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

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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