ANTANANARIVO POL/ECON UPDATE

UNCLAS SECTION 01 OF 03 ANTANANARIVO 000032 SENSITIVE SIPDIS DEPARTMENT FOR AF/E MARIA BEYZEROV DEPT PASS TO USAID/AFR/EA ASHLEY MARCUS DOC FOR RTELCHIN TREASURY FOR FRANCOIS BOYE PARIS FOR WALLACE BAIN LONDON FOR PETER LORD E.O. 12958: N/A TAGS: PGOV PREL ECON EINV MA SUBJECT: ANTANANARIVO POL/ECON UPDATE REF: A) ¶1. (U) SUMMARY: This is U.S. Embassy Antananarivo's Update for January 4 to 20, a periodic unclassified review of major political, economic, and commercial events and information from the U.S. Mission to Madagascar and the Comoros. POLITICS (Paragraphs 2-4) -Crack Down Against the Opposition -State Council's Independence Jeopardized -The Ecclesiastic's Movement is Born ECONOMIC AND COMMERCIAL (Paragraphs 5-12) -Unrealistic Budget Law Passed by Ordinance -New Oil Code on Horizon -Precious Wood Destruction is Authorized -Mining Exploitation -Regional Environment Officers' Visit -French Ambassador Speaks at AMCHAM on Franco-Malagasy Relations COMOROS (Paragraphs 13-15) -Comoran Teachers on Strike -Former President Azali Opposes Extension for Sambi -Sarkozy Visits the Indian Ocean END SUMMARY -------------- POLITICS -------------- ¶2. (SBU) CRACK DOWN AGAINST THE OPPOSITION: The de facto authorities ramped up their repression tactics against the opposition in late December and early January. On December 22, attempts by the opposition to install one hundred members of the transition congress, outlined by the Maputo Accords, were rebuffed by security forces that used tear gas to disperse the crowds. In early January, the director and a journalist of Radio Fahazavana, a station sympathetic to Ravalomanana, were arrested and continue to be held. Despite hopes that political detainee Ralitera Andrianandraina, who has been held for nine months already, would be released on January 6 when his retaining order expired, a new order was issued for another six months on January 6, 2010. In mid-January, an arrest warrant was issued against co-president and leader of the Ravalomanana movement, Fetison Rakoto Andrianirina, who has denied having received any summons. Aside from isolated skirmishes with police, Tana is generally calm as the various political movements and actors await the visit of AU Commission President Jean Ping later this week. ¶3. (SBU) THE STATE COUNCIL'S INDEPENDENCE JEOPARDIZED: One day before Qe State Council - the branch of the supreme court with jurisdiction over administrative actions - was to announce its decision regarding the legality of the HAT's move to annul the decree that had nominated the consensus Prime Minister Eugene Mangalaza, the de facto government issued a tailored ordinance forbidding its nomination decisions to be questioned; another measure considered as a political maneuver to reinforce its unilateral power. As a result, the state council decision has been postponed for a second time. Although the nomination decree of the de facto Prime Minister Camille Vital should have been suspended as soon as the State Council received the request to review Mangalaza's dismissal, Colonel Vital has continued to fill the role of prime minister. The high constitutional council (HCC) has remained silent about the constitutionality of this new HAT ordinance. Reportedly, the HAT threatened the State Council with being abolished if they insisted on issuing their opinion on the legality of Mangalaza's dismissal. ¶4. (SBU) THE "ECCLESIASTICS' MOVEMENT" IS BORN: A group of around thirty preachers, mainly composed of and led by Protestant FJKM Pastors, has since late December organized religious meetings to denounce the state monopoly on public media; to demand the cessation of censorship of news and a call-in program on FJKM's Radio Fahazavana; to demand the immediate release of two Radio Fahazavana journalists detained for suspected complicity in a mutiny; and also to call for the neutrality of the army and the justice system. With the presence of some TIM leaders, and despite a press conference denying its political "affiliation", this group has been considered by the some in the media as another political tool used by former President Ravalomanana - formerly Vice-President of the FJKM - to oppose the current regime and to reinforce the actions to be taken ANTANANARI 00000032 002 OF 003 by the three opposition political entities, now joined together in the "Madagascar Movement". The group has addressed a written appeal to embassies in 'Tana, including the U.S., regarding the recent crackdown against press freedom. -------------- ECONOMIC AND COMMERCIAL -------------- ¶5. (SBU) UNREALISTIC BUDGET LAW: The 2010 budget law was passed by presidential ordinance on December 31 and approved by the high constitutional court in early January. The finance ministry is still in the process of editing it and correcting errors. The normal legislative procedure was not followed due to the dissolution of the parliament in 2009 by the de facto authorities. The budget projects the receipt of over USD 500 million in foreign aid, equivalent to approximately one-third of the total budget or 70 percent of the public investment budget. Given the ongoing political stalemate, this funding is unlikely to materialize. ¶6. (SBU) NEW OIL CODE: The ministry of mines has stated that it will draft a new oil law in 2010 to govern the oil sector for the next ten years. The code will reportedly offer beneficial terms, as compared with those in other African countries, to attract investors. Currently, two oil exploration projects are moving ahead in Madagascar: Bemolanga (French Total and American Madagascar Oil joint venture) and Sakaraha (Sunpec of Hong Kong). ¶7. (U) PRECIOUS WOOD DESTRUCTION: On December 31, 2009, the recently appointed Prime Minister Camille Vital signed an executive order allowing the export of rosewood from Madagascar to continue. This authorization overrides a previous order which stated that it was illegal to export rosewood after November 30, 2009. It is estimated that 200 containers of rosewood valued at 40 million USD in the Sava region will now be exported. Ambassador Marquardt is hosting a meeting of financial and technical partners on January 21 to determine a joint response to this unwelcome development. ¶8. (SBU) UNSUSTAINABLE NATURAL RESOURCE EXPLOITATION: Given the suspension of donor funds, to raise revenue, the GOM is turning increasingly to natural resource exploitation. In addition to the unsustainable logging of precious hard woods, the mining ministry recently announced that it would grant 1,200 mining licenses this year. The ministry will also promote the exploitation of coal reserves in the Southwest; Thai and Australian companies hold interests in those mining zones. ¶9. (SBU) ENVIRONMENT VISIT: The Regional Environmental Officers from U.S. Embassy Addis visited Madagascar January 7 - 14. They met with conservation NGOs, USG agencies, World Bank representatives, mining companies, and a local judge to discuss the environmental degradation occurring in Madagascar. The NGOs stressed that they support vulnerable human populations as an integral part of their conservation efforts, and thus argued that the donors, including the USG, should reopen the funding taps. In addition to regretting the lack of political will on behalf of the de facto regime to combat illicit logging, NGO representatives lamented the current lack of donor funds and donor oversight in the environmental sector, which, they argued, have contributed to the current climate of lawlessness and open resource exploitation. ¶10. (SBU) FRENCH AMB AT AMCHAM: French Ambassador Jean-Marc Chataigner spoke to the American Chamber of Commerce on Jan 14 regarding French commercial and political relations with Madagascar. His EconOff noted the there are 650 French companies in Madagascar with more than 50 employees each, that France was the fifth largest foreign investor here, and that France was the primary importer of Malagasy products (38 percent) in 2009. However, he also pointed out that Madagascar is not of strategic interest for France in general trade terms, as commerce with the island only accounts for less than 0.1 percent of overall French trade. ¶11. (SBU) The French Ambassador said that France's main interest in Madagascar is promoting stable, democratic order because of the large French ex-pat community here (25,000),concern for regional stability affecting Mayotte and La Reunion, and a desire to avoid a power vacuum in Madagascar that could result in drug trafficking and piracy operations. He denied accusations that French government policy was based on special business interests, noting that potentially the largest French investor, Total, signed its contract for investing in Madagascar's oil sector prior to the March 2009 ANTANANARI 00000032 003 OF 003 change of government here. ¶12. (SBU) He argued that the French and the USG share the same ultimate goal of democratic stability, but differ on tactics as the French believe in diplomacy and discussions with the "bad guys", but the US "believes in force and sanctions". He said that "perhaps we don't like some people" but that France did not have a preference for any particular presidential candidate, but only a desire for a stable government. He argued that the Maputo and Addis agreements focused too much on the transition rather than elections and that a compromise solution must be found. He reiterated the need for elections, but with certain guarantees following discussions on the date, the national electoral council, the unity government, etc. He urged that the people be given the floor through elections to choose which political movements have support and should thus be involved in further negotiations. -------------- COMOROS -------------- ¶13. (U) COMORAN TEACHERS ON STRIKE: Comoran teachers from all levels (primary, secondary, university) began an unlimited general strike the week of Jan 11, when classes had been scheduled to resume. The strike was largely followed, and paralyzed educational establishments throughout the country. The strikers are protesting non-payment of salaries (up to eight months, in some cases), administrative regularization of teachers currently working on temporary contracts, and the overall salary scale. ¶14. (U) FORMER PRESIDENT AZALI OPPOSES EXTENSION FOR SAMBI: Former Comoran president Azali Assoumani broke his long silence on national affairs at a press conference held in Moroni. While supporting in theory President Sambi's desire for harmonization of the electoral calendar, Azali warned Sambi that this should not be done by anyone extending their current mandate. Opposition leaders were quick to praise Azali for his stand. However, it is not clear what effect his position will have on the current debate in the Union National Assembly, where supporters of President Sambi hold an overwhelming majority of the seats. ¶15. (U) SARKOZY VISITS THE INDIAN OCEAN: French President Sarkozy visited French overseas territory Mayotte on Monday and French department la Reunion on Tuesday, overflying Madagascar and the Union of the Comoros en route. It was the first visit of a French President to Mayotte since Comoran independence. Sarkozy reasserted France's claim to Mayotte following the 2009 referendum in which over 90 percent of the island's voters expressed their desire for full "Departement" status. There was no popular reaction in the Comoros to either the visit or his statements, which merely reiterated standing French policy. The Comoros consider Mayotte ("Maori") to be Comoran territory illegally administered by France. MARQUARDT