FILE COPYReport No. 3389-MAG

MadagascarEconomic Memorandum

November 3, 1981

Eastern Africa RegionCountry Programs II

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwise

be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = Malagasy Franc (FMG)(yearly average)

1 US$ = FMG 1 FMG = US$

1975 214.32 0.00471976 238.98 0.00421977 245.67 0.00411978 225.64 0.00441979 212.72 0.00471980 211.30 0.0047

FISCAL YEAR

January 1 - December 31

WEIGHTS AND MEASURES

Metric System

FOR OFFICIAL USE ONLY

Preface

This economic memorandum is based on the findings of an economic missionwhich visited Madagascar in September 1980 and July 19811/. The mission's workspanned a period in which the magnitude of an emerging financial crisis resultingfrom domestic and international economic developments and government policydecisions made in 1978 and 1979, and their implications for short and medium termeconomic prospects, were just becoming known to the Malagasy authorities. Whilethe financial dimensions of the situation are now clearly established,available information still does not permit a full assessment of its consequencesin terms of recent and prospective trends in trade, production, and real incomes.Moreover, the Government is still in the process of formulating its-policyresponse, in the form of adjustment policies, expenditure targets, and sectoralreforms, and negotiations are likely to be stretched out over several months inobtaining further financial support from the IMF, bilateral creditors and othersources of assistance. Thus, while the report has established the thrust andpriorities of the policy choices which face the Malagasy authorities and hasprovided an agreed framework for dialogue with them, the size and duration of theslowdown which is now being experienced and the path to economic recovery are stillmatters of considerable uncertainty. These aspects will be followed up closely inthe course of the program of economic work planned for 1982 and 1983, incooperation with the Malagasy Government.

1/ The mission comprised Mr. J. McGibbon (chief of mission), Mrs. Z. Bozkurt(industry), Mr. M. Devaux (balance of payments and monetary sector), Mrs. P. Eap(statistical assistant), i4r. S. Rahim (macro-economic and public finance).

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

MADAGASCAR

COUNTRY ECONOMIC MEMORANDUM

TABLE OF CONTENTS

Page No.

BASIC DATA

MAP

SUMMARY AND CONCLUSIONS .............. .. ..................

I. INTRODUCTION ........................................... 1

II. RECENT ECONOMIC DEVELOPMENTS ......................... 2

General Review ..................................... 2Sector Developments ................................ 6Public Finance ..................................... 11Money, Credit and Prices ........................... 13Balance of Payments ................................ 14External Debt ...................................... 18

III.CURRENT POSITION AND DEVELOPMENT PROSPECTS .. ......... 20

Short-term Public Finance and Balance of Payments 22Medium-term Prospects and Policies .... ............. 25

ANNEXES

I. Industry Sector Policy ........................... 32II. Statistical Tables ............................... 41

LIST OF TEXT TABLES

Page No.

1. Growth of GDP and Components .......................... 2

2. Gross Domestic Expenditure, Savings and Resource Gap .. 3

3. Composition of Gross Fixed Capital Formation .... ...... 4

4. Agriculture Yields ........ ............................ 5

5. Producer Prices - Selected Agricultural Products ...... 5

6. Central Government Expenditures and Revenues .... ...... 12

7. Monetary Survey ......... .............................. 13

8. Balance of Payments ........ ........................... 15

9. Export Growth 1975-79 ................................. 16

10. Composition of Imports ................................ 17

11. External Public Debt Outstanding ...................... 19

12. Balance of Payments 1980, 1981 ........................ 23

13. Central Government Expenditures and Revenues,1980, 1981 .... ............. 24

14. Balance of Payments Projections ....................... 30

15. Use of Resources ......... ............................. 31

16. Growth of GDP 1982-86 ................................. 31

MADAGASCAR - SOCIAL INDICATORS DATA SHEET

MADAGASCAR REFERENCE GROUPS (WEIGHTED AVERAGESLAND AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE)-

TOTAL 587.0 MOST RECENT LOW INCOME MIDDLE INCOMEAGRICULTURAL 369.3 1960 /b 1970 /b ESTIMATE lb AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA

GNP PER CAPITA (US$) 130.0 190.0 290.0 238.3 794.2

ENERGY CONSUMPTION PER CAPITA(KILOGRAMS OF COAL EQUIVALENT) 40.4 72.5 93.8 70.5 707.5

POPULATION AND VITAL STATISTICSPOPULATION, MID-YEAR (THOUSANDS) 5474.0 6785.0 8480.0URBAN POPULATION (PERCENT OF TOTAL) 10.6 14.1 17.9 17.5 27.7

POPLLATION PROJECTIONSPOPULATION IN YEAR 2000 (MILLIONS) 15.5STATIONARY POPLLATION (MILLIONS) 45.0YEAR STATIONARY POPULATION ES REACHED 2110

POPULATION DENSITYPER SQ. KM. 9.3 11.6 14.4 27.7 55.0PER SQ. KM. AGRICULTURAL LAND 15.0 18.0 22.3 73.7 130.7

POPULATION AGE STRUCTURE (PERCENT)0-14 YRS. 41.6 42.8 43.6 44.8 46.0

15-64 YRS. 55.2 53.9 53.1 52.4 51.265 YRS. AND ABOVE 3.2 3.3 3.3 2.9 2.8

POPULATION GROWTH RATE (PERCENT)TOTAL 1.8 2.1 2.51e 2.6 2.8L'RBAN 4.9 5.0 5.i1 6.5 5.1

CRUDE BIRTH RATE (PER THOUSAND) 46.6 45.2 45.7 46.9 46.9CRUDE DEATH RATE (PER THOUSAND) 27.0 21.7 18.0 19.3 15.8GROSS REPRODUCTION RATE 3.0 3.0 3.2 3.1 3.2FAMILY PLANNING

ACCEPTORS, ANNUAL (THOUSANDS)USERS (PERCENT OF MIARRIED WOMEN) .. ..

FOOD AND NUTRITIONINDEX OF OOD PRODUCTION

PER CAPITA (1969-71=100) 89.0 102.0 96.0 89.5 89.9

PER CAPITA SUPPLY OFCALORIES (PERCENT OF

REQUIREMENTS) 106.0 108.0 115.0 90.2 92.3PROTEINS (GRAMS PER DAY) 60.0 60.0 60.0 52.7 52.8

OF WHICH ANIMAL AND PULSE 18.0 17.0 15.0 17.8 16.1

CHILD (AGES 1-4) MORTALITY RATE 41.0 31.3 25.4 27.3 20.2

HEALTHLIFE EXPECTANCY AT BIRTH (YEARS) 37.2 42.5 46.9 45.8 50.8INFANT MORTALITY RATE (PERTHOUSAND) .. 177.0/c

ACCESS TO SAFE WATER (PERCENT OFPOPULATION)

TOTAL 11.0 26.0 23.9 27.4URBAN .. 67.0 76.0 55.0 74.3RURAL .. 1.0 16.0 18.5 12.6

ACCESS TO EXCRETA DISPOSAL (PERCENTOF POPULATION)

rOTAL .. .. .. 26.2URBAN .. 88.0 .- 63.5RURAL t. .. 9.0 20.3

POPULATION PER PHYSICIAN 8901.1 10172.4 10242.3 31911.8 13844.1POPLLATION PER NURSING PERSON 3105.0 3353.9 3470.2 3674.9 2898.6POPULATION PER HOSPITAL BED

TOTAL 469.0 354.4 402.3 1238.8 1028.4URBAN 115.0 214.8 239.4 272.8 423.0RURAL 761.0 475.3 517.9 1745.2 3543.2

ADMISSIONS PER HOSPITAL BED .. ..

HOUSINGAVERAGE SIZE OF HOUSEHOLD

TOTAL .. 5.8 4.7URBAN .. 5.3 5.0RURAL *. 5.9 4.7

AVERAGE NUMBER OF PERSONS PER ROOMTOTAL .. ..URBAN .. ..RURAL .. ..

ACCESS TO ELECTRICITY (PERCENTOF DWELLINGS)

TOTAL *- 5.0URBAN .. ..RURAL .. ..

MADAGASCAR - SOCIAL INDICATORS DATA SHEET

MADAGASCAR REFERENCE GROUPS (WEIGHTED AVE7GES- MOST RECENT ZSTIMATE)I

MOST RECENT LOW INCOME MIDDLE INCOME1960 lb 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA

EDU CATIONADJUSTED ENROLLMENT RATIOS

PRIMARY: TOTAL 52.0 88.0 94.0 56.4 73.7MALE 58.0 95.0 100.0 70.7 96.8FEMALE 45.0 81.0 87.0 50.1 79.0

SECONDARY: TOTAL 4.0 11.0 12.0 10.0 16.2MALE 5.0 13.0 14.0 13.6 25.3FEMALE 3.0 9.0 10.0 6.6 14.8

VOCATIONAL ENROL. (% OF SECONDARY) 9.0 9.0 .. 8.0 5.3

1'UPIL-TEACHER RATIOPRIMARY 70.0 65.0 55.0 46.5 36.2SECONDARY 24.0 20.0 .. 25.5 23.6

ADULT LITERACY RATE (PERCENT) .. 39.0 50.0 25.5

CONS1UMPTIONPASSENGER CARS PER THOUSAND

POPULATION 4.0 6.8 7.1 2.9 32.3RADIO RECEIVERS PER THOUSAND

POPULATION 15.0 79.7 127.0 32.8 69.0TV RECEIVERS PER THOUSAND

POPULATION .. 0.5 1.5 1.9 8.0NEWSPAPER ("DAILY GENERALINTEREST") CIRCULATION PERTHOUSAND POPULATION 8.0 7.8 9.0 2.8 20.2CINEMA ANNUAL ATTENDANCE PER CAPITA 0.5 0.7 0.4 1.2 0.7

LABOR FORCET'TAL LABOR FORCE (THOUSANDS) 3046.1 3619.9 4321.3

FEMALE (PERCENT) 46.9 46.1 45.4 34.1 36.7AGRICULTURE (PERCENT) 92.8 90.0 87.4 80.0 56.6INDUSTRY (PERCENT) 2.0 3.0 3.9 8.6 17.5

PARTICIPATION RATE (PERCENT)TOTAL 55.6 53.4 51.0 41.7 37.2MALE 60.7 58.8 56.6 54.3 47.1FEMALE 50.9 48.2 45.5 29.2 27.5

ECONIOMIC DEPENDENCY RATIO 0.8 0.9 0.9 1.2 1.3

INCOME DISTRIBUTIONPERCENT OF PRIVATE INCOMERECEIVED BY

HIGHEST 5 PERCENT OF HOUSEHOLDS 41.0/dHIGHEST 20 PERCENT OF HOUSEHOLDS 60. i7 .LOWEST 20 PERCENT OF HOUSEHOLDS 5.2/d .LOWEST 40 PERCENT OF HOUSEHOLDS 13.0/d

POVERTY TARGET GROUPSESTIMATED ABSOLUTE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. 150.0 136.0 381.2RURAL .. .. 86.0 84.5 156.2

ESTIMATED RELATIVE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. ,, 135.0 99.1 334.3RURAL .. .. 86.0 61.2 137.6

ESTIMATED POPULATION BELOW ABSOLUTEPO'VERTY INCOME LEVEL (PERCENT)

URBAN .. .. 50.0 39.7RURAL ., .. 50.0 68.8

.Not availableNIot applicable.

NOTES

/a The group averages for each indicator are population-weighted arithmetic means. Coverage of countriesamong the indicators depends on availability of data and is not uniform.

/b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969and 1971; and for Most Recent Estimate, between 1976 and 1979.

/c 1965-66; /d Population; /e Recent population growth estimate is 2.8% for 1975-79.

May, 1981

lEfPGIiTIffONLF _SocIAL tODl-TpctE'

Ofarool AIthooh tho dot. ar donor door eot a ..oo-olY jadgod the moa r-1rasiren tblc, it otol oo- br nto0 thet cloy co not ba toas-euttooslp oopnuho ooot of tho lark of otaodoodtuad dof.itrioao and oo-pos reed hy diffoto..o co-otosit- oloco thi darn. The data sot .to..-clsiout, -oofo1le udoe..t. sob oc of ioj ed.gdln-t. tooodu, uod c.-oooesorot saro dtforooc..u coo- -toort-

Th. tofooroos groPs or (1> tto aur countY grop of rho sbh)at ooogy u-d (2) o oootfy gotop othtueonort- rigker .rorto tooo hno tbooonoto" group

of tho ehjoot orsa toy (-.soPt foo CaPital Si,opluedi Oil utu'g-op ah-o 'Middia (aoooo North Aoims rod Mitodlo lout is 00800. botoo of t-ogoruoi-ioa sff.tuioio). ts h, rofo...o. gosp data tho -rtgo. -o poys.iacto -aSootod .ortooa.tic ostr -o b(oion ood ho.- trip ot.o

sajoify ooh, teroeto in . ru hao doto a 1-:tatit or Sitro she -- oga of --. oot- orog thOo ....ror dodor. -thu coaiobilltto of datauad taao nofoi rors_-torua ho ou irad to relotig roosof -o iodtestor to -otho- oo aT otegon no orly aoof1 Orcrro tha rIuin ofro itodlo-to e0 a rh, uag tho oooopod -efo--ogoos

LAND AREA9 (choo...od aqikt.) too I,tc o _toapt-ul Hod-toon, -hoo, nod oco o.la-toc cociTotal - Totri .uof toe tro oompotiitg rod 0000 rod iod rutor. orbsn, oc root:) dirtdtd hy tOter ro-potti, rorba of hooptiol hodskortrl-ort . - atlsats of aiottrlaoo rod otuPosr-lly -o Puon.cooly u-11nbl.i.aj pblio atd poiraco g--orn od opotoliord hoopital aodto

for- oo puatroos, surht nod hitrhos g atuoat tu its fulioo 1976 data. ltoilitatfo-oocot.- (;t coo ootrbh -ooto por-ettlp atoff Pdby ut saac ot.- phyotiao.. hrtthltah-ros prodrgpirripolLp ott-

GNP Ff0 cAitTi foil_) - MP9 a P s -pg ta c. o too~ srtopia.rt dial o-rro 0000 to-l-do. (tr)- rytoo ho--o, tortdo hoatrooriotad by eam rovrir tehod toWorld arktiaa (i977-79 brolo); 1.960, toO ndirsi.. oatsa rot p-r -Irmlp tooffd by a pityrioto (boo hy1970, oud 1179 duos. -loioa outsat el., oofo o.) ofiok off,, ta-p attest .c.s

dustio ord prorido o l~ifetd ono, of modlot.f1 iiio.Pro etotlo-105010 COOSUHTI9t(t P00 CAPItTA - A-..-' roo-Poira of c-aoccei rotagy (coa tOnal po-pooeucofoo hoopctoio oclodo WHOlo poiooiptlfgs-sol hoaptolal,

usod ltgios, ptol, otoral goe -d hydro-, raruo rod goocos-a olo- nod ruro hbroytle,l foos or it.r hoopilcat -tt mdioul ro.d ratrsityrtoit tyf Or kilglrr of tol qcolotP..oopcto; 1950, t970, aod 1979 c-tooo. SP-oia-t-d hoaptotsl -- 1(oodd oy -odrr stn.l

from -houptnl diidod by totobso of hods.PCPGNI.gOO AP VITAL STATISTICS

S.too oplti ffd10-fu ~tt.....odo) - Aa of loly 1; 1960. 1970,. nd 19799 0O0S1NG

lo,b- ,, Ppolrlt rtcr ttl - atio, of nobor to total pop.otutfo; Ahouhold .o.ot. t ropo ldcdlerho rhuot itto I'ltlo

a og osrofor.; 1960, 1970, -r 99 or tho hot..sbo,ld for -tiootoni- ootcPylattor Poojeott... Aoorccotcr-crcourrc-cra.ohordrrl ooroe

Fooslottot ir yato 270 - loororo popooiactotp-jeotlto co brood oc 1980 boooisort ptro I ni s_bo.. nod trl- rryo rootostoalppootoby go otd rot nod thoto mortality aod fertility ,atoo. a-Ililgo -tptotoo Dluliogo ooo.od.ooo-pormaoot stor-O - ord

p.rjotr pa-mtto for or-tlity oao trpigo of Ohroo laoro- oor roof o pi ooOgif. ooysoooooy et hooch iorroosir slth rorotoy'. peto aPirato. o dootoco lootriotp ooc of dotllt. t.tosl. oshor..nd -ori1

loro .sd fo1.ul,if. a rpootaoy -tbilletog at 77.5 yu-re. The pure- Coomtra ollog oth octototty Io Ogiag q-tuos at porrootogomooefor f-rtiltor ltot also-too sbus, Ool- oesi d-1if- to of tonL1, sobatZ, od rood duttlirgo rupo-ti.oly.

trrh rootoy io th-r aootrodo thof boe riro ooogo t si fotulity EDUCATIONsod f-ottlicy t..odo f-o projocIoccutre Adjlnt.d tooil-nr Mali.e

S tafro ooaio-I ttroypplot 00,t ogro tr ror ool-tt:sl aod, f,nl - boor. ototl, ois rod foralthe bioth ots- iooqou or oh. donth ono, aud al.tobse ago ot-st-ors 0- orlotoftOoeathopsery 1-01 00 P prr.ootogstf roopotr-

ooto ottot.ina o ohurd roly aft- footility rut. dooIi-r 00 priray othool-aoypicoo oriyOrro hlrrae rho roplaromo lo-s of urictot-oprd t tert, hot rock gruaet.tor psaos hot odloord for diiff.tott ogoho of yoiary odo..tatto; for

of -00 Iattlno lot..f oratoy. Th. -taloruoy popolatti ues ra orootto ot- rot rot-d- ttroori-rr ray _tod 100 p-ea00otLirsood 00 tO, brags af ohe pojo_iod oh--astoeiol of the ouutOt ultra 000I popile u_ Orlr -o bho- ho offititi toho-l ago.Or ohs ye, 20(00 rod tOo -o,ofdrur-o f-otil (07 otsl or raptua-....r tbo - -oot. ru cod fe-nt - fo-pord at bho, oo-td-ry

rot tolodotorolso loofooyrsfapp'rrd prhauoy -trttrsro;'fea s-ttI.- optato it r-ochd - Tha Y..t ohco -toiOrery prroirsrrdtgrol,ootra.. 0 oooroao t-urstr.r. foe Lipt

otos but host -ahod. oual f 12 to 17 et y aoof'ogo; -- oop-rd.o... oo .r.go-sgly

Pst at. k.. - Mid-y-o populutio- Proet our- kidlo-tso flo hootto) of Goairo-ootco ...rrt rf ouorodar) Ooaiur coitotiaeu,tota af_o, 1960 , i9P roed 1979 data, told coocr,ldrotiol, 00 othor poograoesIhto oportot lod.pesd-Per og. fut sgrtoltoroi luad - Csopotod au ahor ftr agri-sltoro laud toly or so depotrorts of ororoduop i-otiotiore

orye90,IP ao 1978 dots. Pu_ji-t .. htbtroi-oreo.udo ray-Ttl tr,te ersold tnPooolaoioo AR. Stosoroforot)- Childoo 10-10 esa-u. ,ahrt o119- prtray r ardy .. loel dirdo he boot of tsoohoro ir oh,

4Py-e), ard retod (69 yrrono otut) no p-r..ttngoe of id-youo 9090-orsptdglrretattoo; 1900, 1070. sd 1990 Ott,. (d. fetyros(ors)-Ltsodisfhi, tr read .ad otta)

Goolrotiroh Rats.rrar - A.tl - Idoo gtothosrts of tota rid- ra o -sotsa oftotal dolotpopttiaoir g0 17 your aod _r0.y-r popnllei... OoOf- 1506, 1060.70. sod 1070-79.

jpoeslotlr Gooth Rato (poocoor) - othe - dArsal georh -aoo of osba p070- (0ffSOOPTIOf

erro iroth ORt, (000 tho....d) - A-tral-o birttle Pat tho-etd of itd-y-u taoesto i,oo obr ig t ;poro uoolodso laos hoeruesued1960aooo lt, 1979, rod 1979 Auto. s:icooy roh1oio.-

s_do troth Rats foot oh...a.d - Moral 1daooha pth . -htsds ef mod-pour Raio Roairor fostotor. ooltio All typo of ot..irets for audiopopsltiotto; .960, 1Sf70, ar 1979 Auto. b-tdoruto to 8t-orl Pellir P-o tho.....d of poyslotior; ouisdso out

GooseR Osrductiro Rtst- Aoe..go roho of dasght,ro a oa ill hear ir lioootosis, o otoi a uo .t yooru ohot roiotatiro rf sodiahts -ool ,rdsto poelod if oht,spsrlo.ra. proomot .go-oP..fifr eato .tosfo;dt frroo mruryrehtrsaa itoilitty r_tes: enoly fir-yao -y,rgoo sodiog ir 1960. 1970. sod 1979. .tto .ostotfo bhliahed lir_riog.

Partly Dlocnhooco. ettl(tooo -door -boo of oo-pooru TP Roosi-sofptcrso orolr TV rtooi-or for bt-dosot taof 11h-rr0.00tr dot.o t a ryto fotra aoippoot rou. gorotol pobic 5 bra,d_e ropolti-o; oore oioedT oor

Fail _inoie-sr (Itrerro ofa ridrot)-trr f -rrarri.d to r-srrioo aod io yauruohs sgortrof TV eat, ia.t offort.roo o hitd-horoto o8o (115-4 yoas) 'Or_ro birth-corool d_irs_t Nbarooto (lrol-cio (lro th ..... d -rool-Ooro h- oo tho u-osof ie-oi trld rout it orrea groa.P. -oatt f"olygrri oto-oto oopope", ,iouuprata

FOOD AND0 NtlTtTON to ho "daily" if itappoarue iruat fea toostausoic.rdot of trod Po-forti- ro Opita f19Or-71=ito) - Irdot of porreycita rorl art ota Ooaa pot, Oloocts a T oR d or tho setotr ofpoodootiro of all food -oordicti. Poodrotior otoIudro -ed 00 food ard tiohoto e.d dsolrg the yost, iootdtog udootio... to Argti-it, oio_io 0taodrY_a btia. loodctosto potrur grodo (e.. -tgar.... od tbilo a..tt..

iord of a9 hiok urs edhibe sod cotattrtirote (.g. coff.. erdtot too. rotisdod). dAfregat prodnotios of ouch cruotry Os, bhoIus oLABOR FOlCErotiotoalo_oro pedueo -P,rccreighte 1961-65 , 1971, ro 0990 dot. Toro L,aho PF.c (th-oerds) - Efoto.mi-11ly ocir, Po.r..... toi. dtogPsr .Pria ototo oatelo poro o tooiortt) -Crspsled Poor ard frtos a -,,uo Yir hut -ocldiog htoosodo-o tuadeoto,ot

or-gyoqor-lrot of rot fooe uople orileble is -orotp, poe -uOt r foto p,ooOs.f oil s,oo. -Osfirtt...t it rot-i- rrio r'ee day.nrtal soprlisu o-RfOto. do-oe-tit produotiro, tuporte iota 000 oropoOub; 1960, l70 ord 1979 Auta.

cuport, ord baogooIt Noef.Vt aorpiiau -lode sofoal feod, ooode, Pol roro) -Pra Lehot f-tc to -.rooooo of toro1 IbOo ro=.toct ruod io food p-_osiog,..sd I..... go diotrihsti.o. Ooquire- grolto9o tos) - Llahu foero io feoriog, frtutoy, hurtiag uodmoc tot -toclotd by P00 huron o, pheooicloods f- ot.-ro sor- I olto s p_oosmoge of tota 1Oor f00,; 1900, 1970 sod 1979 Auto,

eity ood htrlth craidarirg -ti-orootr trop-storo, lody ceighte. ago Godo-try (pornotot - Lbr ro Or otrlL otratoot.... amfaorooOrgord om da_ islo f popototi-o, ood sl1ietg 10 p-roor so- .t.s el sodaseotty, -so sod gos a ocottof total lobootor 1960,

..tuohrd Isre; 1961-65, 1970, tad 1977 date. 1970 t.'d 199 9 Outo.Ps=rito omttip o-f o tir(grao p,, Oar - Protaco con -st of pso -rpite yetlirto Rt alceoo) - total, -1i., sod f-s., - Pattoipotfro orort .. Pp Po od05dY N. fo topy of Good Iu doSfird 00 shor. Ra-.orortoaeroae atta,mb r onslhrOso0qoloso o i soro oohio.od by 00DA prorids for siltspuaro f oo,rl ro foalpponoe ofeall agos seProiayullr..... of 01 Stur of -rt1 osoostOr P0 doy sod 20 gr--- of-ioi sod 1960, 197f, sod 1979 dro,. Thosr hose..d 00 lO 'o paerfcpstto..r....polo, proosir, ef shOot 10 gStra shoosi bo rotee psotoir. se erard- ofioloti sog tot--tot of oh, popolatiso, uod log rims o-od. A

boroo I--thoothoto of 70 go- of totsl p-otoi rod 21 es-t o fat -osteor rot rE- -oo-1a ot-r-.arioa pototlo as so to-go Per tho cold. rorooso.d by lAO Or, rho Thiod Ooootoio lopoodoey Ratio - Ostir of popoloti-c ord- 11 aod 61 ord 0tOosi Prod rotoort 1961-OS, 199d sod 1177 dat- to rhe c-co loho oot.

Ps Moiorti opY fro Iora ood palse - Psortoi oupply of food do-cler 0 to mOsol 550poto ie gtuu pot doY; 1961-05, 1971 atd 1977 dora. INogeo IIOTtI9OITIO1

Gtild (sse 4-) Sor-lior Rat.otchrad - Aesosl dootho poth ..rs.ud 00 poetoss of Plit lorootooth irau sod cird) -. o,ood O, rit,oht

totto Auto d-rlyd foro lift tahl_; 1900, 70y atd 1979 data, of Orsh- - .

OOA)TG PoOWtFi TA000? GotorLife Ra.ootocy ota cotBltLsooro. - 0506 rooht tf yer- of lifo r-iaitgotThe fo1ioig onocraro etr royaerioooraoo 1Porertylooa

at. hi-th; 1960, 1970 "d 199 deto sd shoold ho stopotd `Oc croolleutleo-totf ar Oorsnlity pt.O (too thottord) -A.oon da-ths of irf.ote ondor,Ot POt f..,fEot rrd AOooltro P-ytry Oro- loro (tt) -o -apit) - orh and osral -

of ago portht.or (ira hithfo. Aburiolt p-tt00 afees too-) it rht ot lero hbtor haioh a iotldor _o otfao oterofcoitol to-sl otbo, androos -... roritotly adqordiet plo osootl o-(oood rt 7 it,ooot go ratroos syly fioolod,s itreatol nsfa t-or rr rorototd hot oso-tu -tratd tiEatdrltroPrtyIooolyi(ISrt00'0)-sht o oo

rotidos u toissftith hif-et s-sperohoaio-o I. tha huob- toruropl. uro eioo ooolreo_ heooPo ycco Otool ( etoot .. Pit.

dautu hto tr apor diootiruopset of tOo day ir fotohiog tSb_(~b_- ifamily' soaer resdt

dor,ss toicrt Dista., 0000 of oo tiat to-o"-l. rbur. or rrl-lt-oh- e people (ot-a,str oOorl ord Ib esetudootu

paroc for choir roprcot- popolati-ra Otr- diopr...l soy Otiodtho ' roihrior to dic,po-ul rok or oithout toot-too, o.f h-.a otorot f -csond troda Data fioniro,

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Population 8.5 million (mid 1979)GNP per capita: US$290 (1979)

MADAGASCAR - EXTERNAL TRADE

Amount Annual Growth Rates (%'

Indicators (million US$ at (at constant prices)current prices) Actual

1979 1975 1976 1977 1978 1979

.EXTERNAL TRADE

Merchandise Exports 394.1 9.0 -24.3 -14.3 17.3 -6.6Primary 383.9 8.6 -25.3 -14.5 18.7 -8.5Manufactures 10.2 22.3 43.0 - 8.3 -28.1 90.4

Merchandise Imports 636.1 7.5 -29.6 22.0 4.9 24.3Food 80.8 -15.7 - 9.9 61.6 31.5 21.2Petroleum 70.3 21.0 -27.3 -10.3 14.9 -13.6Machinery and equipment 198.7 12.8 -23.5 13.1 23.6 21.1Others 286.3 5.3 -35.5 31.3 -11.7 39.6

PRICES

Export Price Index 55.0 76.1 111.5 100.0 102.9Import Price Index 70.6 87.9 89.7 100.0 109.3Terms of Trade Index 77.9 86.6 124.3 100.0 94.1

Composition of Merchandise Trade (%)(at current prices) DO

1972 1975 1979

Exports 100.0 100.0 100.0Primary 99.5 97.9 97.4Manufactures 0.5 2.1 2.6

Imports 100.0 100.0 100.0Food 11.3 10.8 12.7Petroleum 8,6 20.1 11.1Machinery and equipment 31.3 19.8 31.2Others 48.8 49.3 45.0

'Share of Trade with / Share of Trade with Share of Trade withIndustrial countries (%) Developing Countries % Capital Surplus Oil Exporters (%)1975 1979 1975 1979 1975 1979

DIRECTION OF TRADE

Exports 62 67 38 33Primary ..Manufactures .. .. .-

Imports 67 73 24 25 9 2

Page 2

Ponultion: 8.5 million (mid t9791GNP oer capita: US$290 (1979) MADAGASCAR - Economic Indicators

Amount Annual Growth Rates (%)

Indicator (million USS atcurrent prices) 1975 1976 8/ 19778I 1978V/ 1 9 7 9 et 1980Ie

198097 17

NATIrNAL-ACCOUNTS

Grocs domestic product 3265 1.3 -3.1 2.4 -2.6 9.8 0.8Agriculture 1179 -0.5 -8.7 3.2 -6.6 7.2 2.5Industry 588 0.0 -9.1 3.0 4.2 12.8 -2.7Servicet i498 3.0 3.0 1.6 -2.8 10.1 13

Consumpticn 2987 -0.3 -1. 2.2 -2.6 8.6 1.6Gross inv,estment 677 -4.i -16.2 -1.3 -10.3 64.5 -5.0Exports ofv GNFS 496 17.5 -23.3 12.3 7.6 2.2 -4.7Imports oE GNFS 894 6.8 -27.6 10.4 4.5 30.4 -6.4

Gross national savings 299 9.3 -11.2 0.9 -3.1 114.8 -4.0

PRICES

GDP deflator (1970 100) 153.5 168.8 183.3 195.7 217.9 250.6Exchange iate 214.3 239.0 245.7 225.6 212.7 211.3

Share of GDP at market prices (°) Average Annual Increase (2)(at current prices) (at constant vrices)

1970 1975 1980 1970-75 1975-80

Gross domestic product 0.2 1.7Agriculture 29.4 41.1 36.1 2.4 -0.4Industry i8.6 17.9 18.0 1.9 2.8Services 52.0 41.0 45.9 -1.8 2.5

Consumption 88.0 91.5 91.5 -1.2 1.8Gross investment 15.6 12.8 20.7 -1.7 5.2,xport GNFS 17.4 18.9 15.2 5.2 0.5

Imports GNFS 21.0 23.1 27.4 -2.5 4.0

Gross national saving 11.4 9.7 9.2 11.7 0.3

As % of GDPPUBLIC FINANCE 1970 1975 1979 1980

Current revenues 15.6 13.6 19.2 18.3Current expenditures 123 130 21 216Surplus (+4 or deficit (-) +23 1o.6 -3.0 -3.3Capital expenditure 5.8 3.3 9.2 15.3Foreign financing 1.9 1.4 5.2 6.1

OTHER INDICATORS 1970-75 1975-80

5NIP growth rate (7) 0.9 1.7CGNP ner caoita growth rate (7.) -1.4 -1.1Energy consumption growth rate (7.) 16.42/ 4.0

I COR 25.8 9.7Marginal saving rate 1.3 0.2Import elasticity -13.6 2.4

PI Provisionale/ Est mates1' 1973-75

Page 3

Population: 8.5 million (mid-1979)GNP per capita: US$290 (1979)

MADAGASCAR - BALANCE OF PAYMENTS. EXTERNAL CAPTAL AND DEBT

(Millions US$ at Current Prices)

Indicator 1975 1976 1977 1978 1979 1980

BALANCE OF PAYMENTS

Exports of goods and services 376.1 332.2 385.9 444.5 465.9 478.5

Of which: Merchandise f.o.b. 319.6 288.7 350.9 405.5 411.8 420.7Imports of goods and services 497.8 412.1 456.3 587.6 976.4 1047.7Of which: Merchandise f.o.b. 331.7 261.5 311.8 404.2 674.1 723.1

Net transfers 59.7 52.3 52.1 60.7 70.0 72.9

Current account balance -62.0 -27.6 -18.3 -82.4 -440.5 -516.3

Private direct investment -L-4 -2.5 -4.1 -6.2 -6.6MLT loans (net) 26.1 16.3 29.3 57.9 252.5 269.7Official 25.2 17.1 18.3 22.6 145.3 199.2Private 0.9 -0.8 11.0 35.4 107.2 70.5

Other capital 3.7 7.1 5.3 23.6 -11.3 29.8Change in reserves (- increase) 33.6 6.7 -12.2 7.1 205.9 223.4

International reserves 35.6 42.2 68.9 59.2 5.0

Reserves as months imports 0.9 1.2 1.8 1.2 0.1

External Debt as of December 31, 1980US$ million

Public debt, including guaranteed 1035.1Non-guaranteed private debt ..

Total outstanding & disbursed 1035.1

Debt Service Ratio (%)-/1979 1980

Public debt, including guaranteed 7.4 12.4

IBRD/IDA Lending at September 30, 1981US$ million SDR millionIBRD IDA IBRD IDA

Outstanding & Disbursed 30.94 150.37 - -

Undisbursed 0.27 99.40 - 36.2Outstanding including undisbursed 31.21 249.77 - 36.2

e/ Estimates1/ Ratio of debt service to exports of goods and services.

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- i -

SUMMARY AND CONCLUSIONS

i) Madagascar has, to date, been unsuccessful in achieving an adequate orsustained rate of economic development. GDP growth has been sluggish and erraticand has failed to keep pace with population growth; per capita real income in 1980was about 12 percent below its 1970 level. It is estimated that around 50 percentof the population still subsists below the absolute poverty level.

ii) Domestic food production has lagged significantly behind populationgrowth and the country has become increasingly dependent on imports to meet foodrequirements. Production of the limited range of agricultural and mineral productson which the country depends for its foreign exchange earnings has stagnated. Thecountry's manufacturing sector generally operates well below capacity due in largemeasure to inadequate and erratic supply of domestic raw materials.

iii) Since the mid 1970's government has formally adopted a number of explicitobjectives for the country's medium and longer term economic and social developmentand has greatly extended its control and management of economic activity. Thefocus of growing state involvement, however, has tended to be on forms ofownership, administrative organization and increased fiscal control rather than onmeasures to promote increased productivity and greater production of goods andservices. The absence of a dynamic production base and consequent incomegeneration has frustrated the achievement of some objectives, such as increasedemployment, or meant that others, such as improved health and educationalstandards, require a growing and disproportionate share of scarce resources.

iv) Agricultural performance has been particularly disappointing given thecountry's relatively good natural resource endowment. The general tendency foraverage yields to stagnate or decline has continued over recent years despiterecent increased import of agricultural inputs (fertilizers, insecticides) and someincreases in government controlled producer prices. The producer price increaseshave generally been modest and lagged behind the general inflation rate in thecountry. Prices received by producers of export crops represent a small proportion(30-40 percent) of world market prices. The serious deterioration in the transportnetwork has greatly impeded the distribution of agricultural production. Extensionservices remain inadequate.

v) Improved agricultural performance is central to Madagascar's economic andsocial development. Its achievement requires concerted action in technical,organizational and financial policies. A pricing policy which provides a betterand assured incentive to producers is clearly a necessary condition forimprovement. Actual data on agricultural incomes is not available but a comparisonof output trends, producer price developments and the general inflation rate in thecountry indicates that real returns from agricultural production have probablydeclined by about 25 per cent between 1975 and 1979.

- ii -

vi) The poor performarnce in agriculture also affects the manufacturing sectorwhere inadequate and erratic supplies of raw materials are an important cause ofthe slow growth of industrial output. Capacity utilization in industry is low anddependence on imports high. The level of manufacturing exports is very low,textiles being the only industrial sector which exports more than ten percent ofits output. Existing financial incentives are strongly biased againstmanufacturing export and the general price control system provides manufacturerswith no defense against cost increases beyond their control. The Investment Codeof 1973 which sets out the fiscal and other incentives for manufacturing has notbeen effectively implemented; and cumbersome and protracted administrativeprocedures deter enterprises from taking advantage of its provisions. Planning ofindustrial projects remains weak; a large number of projects undertaken in recentyears have paid inadequate attention to the availability of domestic raw materials,qualified manpower or management capacity. A thorough reassessment of industrialstrategy and policies is required.

vii) Despite the problems of the economy there has been considerable progressin promoting a number of social objectives, such as the satisfaction of basicneeds, reduction of urban-rural income disparities and protection of livingstandards of low income urban groups. A notable achievement in social policies hasbeen the progress towards the democratization of education.

viii) Economic planning to which the government has made a major commitmentstill :Lacks material and human resources despite highly qualified leadership. Planobject-ives have been unrealistic and have not been effectively integrated in thedecision making process, which remains too loosely structured and overlypoliticized. Few plan objectives are being realized. There has indeed been littleattempt: to adhere to the priorities or programs envisaged in the Plan. Actualinvestment has borne little relation to the composition of the Plan program andinstead of the phased increase in investment which the Plan incorporated theincrease was largely concentrated in one year, 1979.

ix) The sudden upsurge in investment in 1979 and 1980 put serious strains onthe already weak underlying government budget and balance of payments positions.Similarly while the Plan had envisaged somewhat greater recourse to externalsources for the financing of investment, the sudden and sizeable increase inexternal borrowing which took place put considerable strain on the country'spayments capacity. While welcome progress is being made in decentralizing economicplanning, effective plan implementation requires a greater screening of investmentprojects in the light of realistic economic and financial returns, as well as aclose link between the phasing of the investment program and annual allocations andexpenditures in the government budget.

x) The critical deterioration in Madagascar's balance of payments andgovernment budget positions which took place in 1979 and 1980 has eroded the basefrom which the Plan for the years 1981-86 starts. The extent of adjustment neededto reduce the external deficit and the relatively poor prospects for world pricesand world trade expansion for Madagascar's principal exports over the next fewyears i-ndicate that there will be a very tight foreign exchange resourceconstraint. Even with a considerable improvement in external and domestic economicpolicies available resources are likely to limit the growth of GDP to around 3.0percent per annum for the next four or five years.

- iii -

xi) The report's assessment of medium term economic prospects points to theneed for significant changes in the strategy and policies which government haspursued over recent years. Foremost among these is the need for more productiveuse of investment capacity without any large increase in the rate of investment andalso the need to contain imports and restructure them to production purposes.Clear priority has to be accorded to investment in production sectors and a majoreffort has to be undertaken to rehabilitate the transport system. A considerableimprovement in investment planning and programming is required, particularly inensuring that the government's own investment program is incorporatedsystematically in the budget process. One key element in the containment andrestructuring of imports is to reduce the dependence on imported food, especiallyrice imports.

xii) A more vigorous development of the agricultural sector is paramount inthe suggested strategy. A clearly focused program for improving crop yields isrequired. There is strong evidence that the government's producer price policy has

been a disincentive to agricultural growth. In addition to technical and fiscalefforts to improve crop production there is a clear need to improve the efficiencyof the parastatal agencies through which a large proportion of agricultural outputin Madagascar is commercialized and distributed.

xiii) On industrial policy the general objective over the medium-term should bea fuller utilization of existing manufacturing capacity. There is a need to ensurea more regular and assured supply of inputs, both imported and domesticallyproduced, for the sector. Current financial incentives militate against expansionof manufacturing exports. Similarly import quotas and price controls discourageindustrial expansion. Generally the approach to industrial policy has to paygreater regard to real comparative advantage and the domestic resource costsinvolved. Continuing uncertainties with regard to the implementation of theCharter of Socialist enterprises and the role to be accorded to private enterpriseimpede the development of the industrial sector.

xiv) The development strategy suggested generally implies a loosening ofcontrols and a more effective use of pricing and monetary policies. At the sametime there is a need for a clearer role for the Planning administration incoordinating both the objectives and implementation of policy. The diffuse anduncoordinated way in which economic decision making has been undertaken in the pasthas been an important factor in the country's sluggish and erratic development.

xv) The urgency of undertaking policy reform is underlined most clearly bythe current and prospective financial situation, particularly as it is affected bythe foreign public indebtedness. External debt which had previously beenmaintained at a low level increased very rapidly over recent years, more thanquadrupling between 1977 and 1980. Almost half of the new external borrowing overthis period was from non--concessional sources so that there has been a significanthardening in average terms. Debt service payments obligations have increased veryrapidly, the debt services ratio increased from around 4 per cent in 1977 to about30 per cent in 1981 and is projected to rise to about 50 per cent in 1983. Therescheduling agreement reached with the Paris Club in April 1981 providedsignificant but very temporary relief. It is likely that Madagascar will have toseek further relief on its debt service obligations and, given the country'sbalance of payments prospects, it may need to be extended over a longer period oftime.

I. INTRODUCTION

1. Madagascar, with a population of 8.7 million and a per capita GNP of

about US$290 in 1979, is amongst the poorest countries in the world. It is asparsely populated country (about 14 persons per square kilometer) with less than20 percent of the population living in urban areas. Although generally wellendowed with natural resources and a variety of soils there are considerableregional variations in ecology and climate. The central plateau, the mosteconomically advanced region, has a subtropical to temperate climate, the south isthe poorest region with an arid climate and infertile soils, the eastern region hasa tropical climate and although rich agriculturally, crops are frequentlydevastated by cyclones. Agriculture accounts for about 35 percent of GDP; about 85percent of the national labor force is engaged in agricultural activity, andagricultural products account for about 80 percent of the country's exportearnings.

2. Despite a relatively advantageous endowment and diversity of resources,Madagascar's development over the longer term has been extremely disappointing.With a population growth around 2.8 percent per annum, real per capita GDP hasdecreased by about 1.5 percent per annum during the decade of the 1970s; in 1980per capita real income was probably about 14 percent below its 1970 level.Agricultural output has lagged conspicuously, growing in total by less than 0.5percent per annum between 1970 and 1980, and the country has become increasinglydependent on imports to meet food requirements while the volume of agriculturalexports has virtually stagnated. Mineral production has declined and in 1979 and1980 was only about two-thirds of its mid-1970s level. The growth of manufacturingoutput has been slow and erratic, the sector has remained heavily dependent onimported inputs and operated at low levels of capacity utilization. The transportsystem (roads and railways) has seriously deteriorated over recent years and nowconstitutes a major impediment to development.

3. The generally poor development performance has fairly uniformly prevailedthroughout the decade; there have been few consecutive years in which significantincreases in output, investment, consumption, etc. have been sustained. Therehave, nevertheless, been a number of important changes in the focus and thrust ofgovernment economic policy during the period. In the early 1970s emphasis wasgiven to the "indigenization" of the economy and lessening of foreign influence andcontrol. The role of the state, through nationalization of enterprises and generaleconomic controls, was greatly extended. This process was consolidated andfurthered by the present government, which came to power in 1975, through itsformal commitment to economic planning and the adoption of explicit medium andlonger term objectives for the development of the economy. Until 1978 the variouspolicy orientations were undertaken with continued cautious balance of payments andfiscal policies, and reasonable equilibria in external payments and governmentbudget accounts were maintained. In 1979 and 1980 government undertook a verylarge program of public investment with a marked shift to dependence on externalsources for its financing. The deterioration in the balance of payments and

- 2 -

government budget positions which ensued has been dramatic, and now as governmentis on the point of initiating its second medium term plan for the period 1981-86 itls confronted with the necessity of effecting sizeable corrective and stabilizingadjustments in the shorter term.

4. The last Bank Economic Reportl! covered developments to 1978 andevaluated prospects for the First Medium Term Plan (1978-80) which government hadjust adopted. The present report evaluates actual developments during the 1978-80Plan period and assesses the current (mid-1981) situation of the economy. It alsoexamines prospects for the 1981-86 Plan period and attempts to identify the changesor modifications in policies which seem to be called for if Madagascar is toachieve a more sustained and viable economic development.

II. RECENT ECONOMIC DEVELOPMENTS

A. General Review

5. The objectives and the general strategy for development over the 1977-80period were set out in the present government's First Medium Term Plan. The Planwas intended to provide an overall framework of resource use and availabilitywithin which the various institutional and economic sectors would establish theirdetai:Led programs and activities. Judged by previous experience, either of theimmediately preceding years or over the longer term, the plan's quantitativeobjectives were very ambitious (see Table 1 below):

Table 1. Growth of GDP and Components(Average annual percent change in volume)

1970-77 1974-77 1977-80Plan Targets Actual

Private Consumption -0.3 -0.4 3.6 0.7Public Consumption -1.0 2.5 3.9 8.2Gross Fixed Capital Formation -2.6 -5.0 14.2 13.3Exports of Goods and Services 2.1 0.4 7.5 1.6Imports of Goods and Services -3.7 -5.0 5.3 8.5Gross Domestic Product 03 0.2 5.5 1.9

of which:Agriculture 0.5 -2.0 4.3 0.9Industry 0.5 -2.3 10.7 4.6Services 1.1 2.0 4.8 1.5

1/ Madagascar Recent Economic Developments and Future Prospects, World Bank,November 1980.

-3 -

6. Broadly, the Plan proposed a strategy in which rapidly expandinginvestment expenditures would provide the impetus to growth. All the mainproducing sectors were expected to achieve a significant acceleration in outputgrowth with the industry sector achieving a particularly rapid expansion. The Plananticipated that the increased investment and output would be obtained without anysignificant increase in the resource gap and that the investments would be largelyfinanced by a rapid growth in the domestic savings rate (see Table 2 below):

Table 2. Gross Domestic Expenditure, Savings and Resource Gap(Percent of GDP)

(current price data)

Average 1978 1979 19801974-77 Plan Actual Plan Actual Plan Actual

Consumption 89.7 88.6 89.5 86.8 89.9 84.9 91.5Private 74.1 72.8 72.7 71.4 72.6 69.8 74.4Public 15.6 15.8 16.8 15.4 17.3 15.1 17.1

Investment 13.0 13.2 14.1 15.1 22.1 17.1 20.7Gross Domes-tic Exp. 102.7 101.8 103.6 101.9 112.1 102.0 112.2Resource Gap -2.7 -1.8 -3.6 -1.9 -12.1 -2.0 -12.2Gross Domes-tic Sav. 10.3 11.4 10.5 13.2 10.1 15.1 8.5

7. As can be seen from Tables 1 and 2 actual developments over the 1977-80period differed very considerably from the Plan's expectations. Average GDP growthwas around 1.9 percent per annum for the three year period compared to the Planobjective of 5.5 percent per annum. GDP in fact declined by about 2.6 percent in1978, increased by around 10 percent in 1979 and by less than 1 percent in 1980,thus continuing the very erratic pattern which has characterized Madagascar'sdevelopment over the longer term. Gross Domestic Income, which makes allowance forthe effects of the terms of trade, grew by about 1.2 per cent per annum over the1977-80 period. Output growth in each of the main sectors (agriculture, industryand services) fell far short of Plan objectives and showed the same pattern oferratic development.

8. In general macro-economic terms the only objective of the Plan whichappears to have been substantially realized was the rapid increase in the volume ofinvestment. Gross fixed capital formation increased by over 13 percent per annum(in real terms) between 1977 and 1980 compared to a Plan objective of just over 14percent per annum. The investment thrust and its repercussions on the economy hasbeen the salient feature of developments over recent years; and although inaggregate terms corresponding to the Plan's strategy it has in terms of phasing,composition and financing deviated very significantly from Plan expectations.

9. The Plan had envisaged a rapid but fairly uniform expansion of investmentexpenditure during the three year period. In fact the volume of capital formationexpenditures declined by over 10 percent in 1978, increased by about 65 percent in1979 and decreased by about 5 percent in 1980. Even a measured progress to thehigher investment levels proposed in the Plan would have strained the economy'sabsorptive and financing capacity, but as it happened the sudden and dramaticupsurge had pervasive disruptive effects.

- 4 -

10. Although only preliminary information for 1979 is available on thecomposition of fixed capital expenditures it ind-icates significant departures fromPlan estimates.

Table 36 Composition of Gross Fixed Capital Formation(percent of total)

Plan 1979 Actual

Agriculture 18.6 14.0Industry 33.0 28.7Transport & Communication 27.6 32.2Commerce 4.3 1.9Administrative and Social Services 13.5 21.8Other Services 3.0 1.4

Total 100.0 100.0

The share of the agricultural and industrial sectors in realized investment appearsto have been below Plan objectives. Investment in transport and communicationsexceeded Plan estimates, largely due to the purchase of a Boeing 747 aircraft and anumber of coastal transport vessels none of which were included in the Plan'sproposed investment program. The share of investment in administrative and socialservices also greatly exceeded the Plan program. A major part of theseexpenditures was accounted for by the construction and equipment of RegionalUniversity Centers again expenditures which had not been anticipated in the Planinvestment programi/. The actual pattern of investment in 1979 not only deviatedfrom Plan expectations in the significantly smaller share of directly productivesectors, it also resulted in the general government sector accounting for over 51percent of total investment compared to around 42 percent anticipated in the Plan.This resulted in an additional financing burden on the Government budget.

11. The objectives set out in the 1978-80 Plan document were not supported bya systematic and explicit assessment of domestic resource mobilization and overallfinancing requirements. As can be seen from Table 2 above it was, however,generally anticipated that they could be achieved without any significant increasein t1he resource gap and that a rapid increase in the domestic savings rate wouldobviate any need for significantly greater reliance on external financing sources.A nunber of factors, dealt with more fully below, contributed to the very differentsavings and resource gap developments which actually took place. They werenevertheless to a very important extent due to the direct and indirect consequencesof the "investment boom".

2/ Investment expenditure on Regional University Centers in 1979 accounted forapproximately 85 percent of investment in social services and for about 9.5 percentof total fixed investment expenditures. Preliminary information for 1980 indicatesthat further investment in the Regional University Centers accounted for about 13percent of total fixed capital formation.

-5-

12. First the value of capital goods imports increased by about 23 percent in1978 and by 60 percent in 1979. Capital goods imports accounted for over half ofthe increase in the import bill in 1978 and for about 45 percent of the increase in1979. The share of capital goods imports in the total merchandise import billincreased from about 22 percent (average 1975-77) to about 32 percent in 1979 andaccording to preliminary estimates was still about 30 percent in 1980. The growthin the capital goods import bill was due not only to an increase in the volume ofcapital imports (about 50 percent between 1977 and 1979), but also to a relativelymuch more rapid increase in the unit values of capital goods imports whichincreased by about 47 percent between 1977 and 1979, compared to an average unitvalue increase for non-capital goods imports of about 13 percent.

13. The Plan underestimated the growth of investment goods prices, havingassumed an average annual increase of about 12 percent between 1977 and 1980compared to the actual increase in the implicit deflator for capital formation ofabout 20 percent per annum over the three years. The share of investment incurrent price GDP was, therefore, significantly higher than anticipated and thefinancing requirement correspondingly greater.

14. Contrary to Plan expectations domestic savings did not increase.Domestic savings as a proportion of GDP actually decreased from about 10.5 percentin 1978 to about 8.5 percent in 1980 compared to the Plan's expectations of anincrease from 11.4 percent in 1978 to about 15 percent in 1980. The volume ofdomestic savings (i.e. savings deflated by the investment price index) in 1980 wasabout one third below its 1977 level.

15. Government budget developments, which had only been very superficiallyintegrated in the Plan's macro-economic framework, were a major cause of theinadequate savings performance. Government total expenditures (current pluscapital) increased by about 145 percent between 1977 and 1980 while totalGovernment revenues increased by just over 30 percent. Government capitalexpenditures, which increased almost seven-fold between 1977 and 1980, accountedfor about 60 percent of the absolute growth in total government expenditures duringthe period. The overall government deficit which was equivalent to about 1.5percent of GDP in 1977 increased dramatically, in 1979 to about 12 percent of GDPand in 1980 to about 18.5 percent.

16. Contrary to the strategy envisaged by the Plan the investment thrust had,therefore, to be largely financed from external sources. Total external publicdebt (outstanding and disbursed) which was about US$260 million at end-1977 reachedabout US$625 million at end 1979 and US$1,035 million at end-1980. Much of thisdebt was contracted on non-concessionary commercial terms so that there has been adramatic increase in debt service payments obligations. The debt service ratiorose from about 3 percent in 1976 to about 10 percent in 1979, about 17 percentin 1980 and is estimated to be over 30 percent in 1981. It is a striking exampleof how rapidly a country's external debt position can deteriorate.

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17. The above general review underlines the dominant and pervasive influencewhich the policy of "investir c outrance" had on the course of economic andfinancial developments in Madagascar over recent years. Such a broad explanationrisks oversimplification. There were, of course, many more specific factors andinfluences at work. These are dealt with in the more detailed review ofdevelopments which follows.

B. Recent Developments in Production, Public Finance and Balance of Payments

(i) Production Sector Developments

18. Agriculture. The volume of total agricultural output grew on average byabout 1 percent per annum between 1977 and 1980 thus continuing the very sluggishdevelopment which has characterized Madagascar's agriculture since the early1970s. Output in 1978 was seriously affected by the prolonged drought conditionswhich had prevailed since 1976 and declined by about 6.5 percent. With improvedweather conditions output in 1979 increased by about 7 percent but in 1980 isestimated to have grown by only about 2.5 percent, and preliminary indications arethat in 1981 output is likely to show virtually no expansion. Detailed cropproduction data (see Annex Table 7.1) is not available beyond 1979 but it appearsthat in 1980 and 1981 most crops have been generally affected by reduced suppliesof seed and fertilizer inputs and by renewed drought conditions in a number ofregions.

19. Production of rice, the principal staple food, has virtually stagnatedover recent years. The increase registered in 1979 left production about 5percent below its 1977 level and only about 7 percent above the level of the early1970s. Rice has traditionally been a subsistence crop in Madagascar with onlyabout 10-12 percent of production marketed, primarily for urban consumption. Untilabout 1972 the country was self-sufficient in rice and indeed had a small, 10,000to 20,000 tons per year export of high quality rice. Imports of rice have,howevier, increased rapidly over recent years, from about 60,000 tons in 1975 toabout 250,000 tons in 1980. Rice imports in 1980 correspond very closely to theestimated urban requirement which is considered to have grown very much in linewith the urban population growth of about 5.5 percent per annum.

20. Domestic rice production has, therefore, not only failed to keep pacewith the overall population growth of about 2.8 percent per annum3 /, but hasfailed to supply the rapidly growing urban market. A number of factors underlythis. First, in a number of major rice producing areas (e.g. Hauts Plateaux) thereare serious limits on the extent to which the area under cultivation can beextended. Second, due to poor extension services, inadequate supplies of inputs,

3/ With an estimated average consumption of about 400 grams per person per dayMadagascar, nevertheless, remains amongst the highest rice consumers in the world.

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and poor maintenance, average yields have fallen. Generally, the government'sproducer prices policy has provided scant incentive to increased production; theproducer price was only increased by 4 percent between 1977 and 1979 and althoughincreases of 10 percent were introduced in 1980 and 1981 the producer price haslagged very far behind the general inflation rate. Furthermore, the seriousdeterioration which has taken place over recent years in Madagascar's transportsystem (roads, rail, trucks) is an important bottleneck to domestic supply andmarketing.

21. Government has also maintained a low fixed consumer price for rice,financed by a rapidly growing subsidy burden on the budget (see para. 36 below).There have been increasing shortages and the development of parallel markets and in1981 government relaxed its policy somewhat with a 17 percent increase in theofficial consumer price.

22. Production of cassava, the second most important staple appears to havegrown more regularly over recent years although there is again some evidence ofdecreasing yields. The increase in cassava production reflects some switch fromrice consumption. Industrial processing of cassava has decreased in recent years.The official producer price for cassava has remained unchanged since 1975.

23. Production of coffee, Madagascar's major export commodity, rose steadilyduring the first half of the 1970s, from about 67,000 tons in 1970 to about 84,000tons in 1975. Due mainly to unfavorable climatic conditions production declined in1976 and 1977 to about 68,000 tons. In 1978 and 1979 production increased reachingabout 81,000 tons in 1979; the increased production is likely to have been duemainly to improved weather conditions. Although producer prices were increasedgradually from 1977-79 the small extent of the increase--about 12 percent--isunlikely to have produced a significant response. In 1979 the producer price wasequivalent to less than a quarter of the world market price4 /. The replantingprogram which government initiated in recent years also appears to have fallensignificantly behind schedule.

24. Clove production, Madagascar's second most important export, is subjectto a three to four year production cycle. From a previous peak of about 18,000tons in 1974 clove production declined to about 4.5 thousand tons in 1975 thenincreased over the next four years to about 18,000 tons. Producer prices have beenraised from FMG 340/kilo in 1977 to FMG 430/kilo in 1981. The producer price in1979 was equivalent to about 38 percent of the world market price. World demandfor natural vanilla has been affected over recent years by competition fromsynthetic substitutes. This may have contributed somewhat to the significant dropin Madagascar's vanilla production which occurred between 1977 and 1979 but this isconsidered to have been due mainly to the effects of prolonged poor maintenance andunfavorable weather conditions.

4/ Government increased the producer price by 16 percent in each of the crop years1980 and 1981 so that with the recent fall in world prices the producer price iscurrently equivalent to about one-third of the world price.

25. Madagascar's other cash crops (pepper, sugarcane, cotton, tobacco andgroundnuts) have also been at depressed or declining production levels over recentyears (see Annex Table 7.1). For most of these crops there is evidence ofstagnating or decreasing yields (Table 4 below).

Table 4. Agriculture Yields(tons per hectare)

Crop 1977 1978 1979

Rice (paddy) 1.96 1.75 1.74Cassava 6.62 5.84 5.98Groundnuts 1.12 0.98 1.01Sugarcane 38.81 38.23 36.51Cotton 1.85 1.55 1.71Tobacco 0.75 0.67 0.89Coffee 0.32 0.35 0.38Vanilla 0.17 0.20 0.17Cloves 0.22 0.19 0.20Peppers 0.50 0.51 0.55

Inadequate supplies of required inputs (seeds, fertilizers) and weak extensionserviLces have apparently contributed to the poor production and productivityperformance. The disincentive effect of low and only slowly increasing officialproducer prices has, however, been another major factor. Producer prices wereincreased only very modestly from 1977 to 1979 and although increases in 1980 and1981 have been significantly higher they have still lagged substantially below thegeneral inflation rate of the economy (see Table 5). Contrary to the strategyenvisaged in the 1978-80 Plan, the terms of trade have moved against agriculture;average agricultural prices having increased by about 30 percent between 1977 and1980 compared to around 45 percent for the other sectors of the economy.

Table 5. Producer Prices - Selected Agricultural Products(1977 = 100)

1978 1979 1980 1981Rice 100 111 123 134Groundnuts 107 113 122 144Sugarcane 100 100 100 100Cotton 100 107 110 128Coffee 102 103 i19 139Cloves 100 113 116 129Vanilla 109 179 214 250

26. Information on livestock sector developments is very fragmentary. Cattlerearing is the principal activity and available information points to a decliningcattle population since 1975. Registered cattle slaughtering, which decreased from

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about 380,000 in 1970 to about 215, 000 in 1976, subsequently increased to about295,000 in 1978e The rate of registered off-take, about 5 percent, remains low.The low level of controlled meat prices is likely to be a disincentive to increased

and improved livestock marketing. The fishery sector has also shown littleexpansion; the catch from traditional fishing for local consumption has remained

around 6,000 tons per year; despite relatively high and stable world prices thevolume of exports of commercial fishing has decreased from about 7,000 tons in 1975

to about 3,700 tons in 1978.

27. In the mining sector production of chromite, graphite and mica, the three

principal mineral products, have all declined over recent years. With the

introduction of increasted capacity in the early 1970s chromite production reached a

peak of about 211,000 tons in 1976. Due to a softening in world demand, outputdropped to about 128,000 tons by 1979 but picked up in 1980 to about 147,000 tons.Similarly graphite production has declined from a peak production of about 18,000tons in 1975 to about 10,000 tons in 1980. Mica production which had increased

regularly from 1972-1975 was subsequently affected by synthetic substitutes and

production fell from about 2,000 tons in 1975 to about 1,200 tons in 1979. Totalmineral output in 1980 is estimated to have been only about two thirds of its 1975level (see Annex Tables 8.2 and 8.4).

28. The manufacturing sector was, according to Plan objectives, expected togive major stimulus to growth in the 1977-80 period. As already stated (para. 6

above) manufacturing output fell far short of Plan objectives and developed veryunevenly over the period. The official national accounts estimates indicate an

increase in the volume of industrial value added of about 4 percent in 1978 andabout 13 percent in 1979 and a subsequent decline of around 3 percent in 19805/.Allowing for statistical uncertainties it appears that the share of manufacturingin total value added has remained fairly constant at around 17 percent. Foodprocessing (including beverages) and textile production are the dominantactivities, accounting respectively for about 35 percent and 21 percent of thesector's value added.

29. The output of food and beverage industries grew on average by about 2

percent over the 1977-80 period but growth was largely attributable to beerproduction which grew by about 6 percent per annum. Output of edible oils declinedover the period reflecting the poor groundnut harvests. Production of refinedsugar which was about 116,000 tons in 1978 declined to 109,000 tons in 1980 duemainly to reduced deliveries of sugarcane for processing. Processed beefproduction in 1979 was less than half its 1977 level. Poor transport facilities aswell as management deficiencies in the two meat companies are considered to havebeen largely responsible for the poor performance. Government has recentlyacquired a controlling interest in the two companies.

5/ The national accotnts estimates differ significantly from the industrialproduction indices (see Annex Tables 8.1 and 8.4) which indicate a much less rapidgrowth in 1979.

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30. Textile production which increased by about 9 percent in 1979 decreasedby about 5 percent in 1980. The increase in 1979 was due mainly to improved rawcotton supply from higher domestic production in 1976 and 1977. The major increasewas iin production of cotton fabrics which are principally consumed on the domesticmarket. In 1980 cotton production was affected by reduced raw material suppliesand by machinery maintenance problems. Output of construction materials increasedover the period and in 1979 was about 15 percent above the 1977 level. Cementproduction has varied considerably from year to year but in 1979 production ofabout 63,000 tons was still below the near 70,000 tons produced in 1973.Corrugated sheet production has expanded rapidly since 1976 and by 1979 reached apeak production of over 15,000 tons, the previous high production having been in1974 with production just over 11,000 tons.

31. Production of petroleum products has declined sharply over recent years,volume of output in 1980 being about half its 1972 level. Production of butane,motor spirit, kerosene and gasoil all showed significant production drops (seeAnnex Table 8.1)> The drop in output of these products reflects a shift to fueloilproduction for use in thermal electricity production. The drought conditions ofrecent years have necessitated a switch from hydroelectric sources of energy supplyto an increasing use of fueloil for electricity generation. Domestic oil refiningcapacity, of which some 40 percent was exported in 1975, has had to be diverted toproducing diesel fuels for domestic electricity production, so that by 1978 onlyabout 11 percent of oil-refining capacity was exported. Receipts from exports ofpetroLeum products in 1979 were less than half the 1975 level.

32. The only industries which have shown a regular growth of output aretobacco, leather goods (mainly shoes) and paper products. The combined share ofthese industries in total manufacturing value added in 1979 was just over 13percent.

33. The disappointing record of the manufacturing sector in achieving a moredynamic and sustained expansion has to be viewed against the background of sluggishand erratic production of raw material inputs from the agricultural sector and anextensive and growing governmental control and intervention in industrialactivities. The latter is dealt with more fully in the Annex I.

34. Transportation. The inadequacy of Madagascar's road and rail networkconstitutes a serious and growing obstacle to development. The road system ofaround 48,000 km of primary and secondary roads includes about 9,000 km which wereasphalted. Road maintenance is extremely poor and the road from Antananarivo andthe central plateau, where much agricultural and most industrial production takesplace, to Toamasina the principal seaport has been virtually impassable for thelast y,ear or two. The rail link from Toamasina to the capital and central plateauhas also deteriorated due to poor maintenance and derailments and delays arefrequent. Rail freight traffic (in terms of ton/km) has decreased by about 8percentL between 1975 and 1979.

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(ii) Public Finance

35. Up to the mid-1970s the central government budgetary position remainedremarkably stable, small surpluses were registered on current account and theoverall budget deficit fluctuated slightly around 2.5 percent of GDP. Althoughrecurrent expenditures increased rapidly from 1975-77 overall budget revenues,including transfers of earnings of stabilization funds 6 /, increased even morerapidly so that the overall deficit in 1977 was equivalent to only about 1.5percent of GDP. From 1978 to 1980 the government budgetary position deteriorateddramatically, the overall deficit increased from about FMG 21 billion in 1978(about 4.5 percent of GDP) to about FMG 128 billion in 1980 (18.5 percent of GDP).

36. The rapid growth of recurrent expenditures which began about 1975reflects the process of administrative and economic reform which the government hasundertaken. This included the take-over of most large businesses and involvedgovernment directly in their operations including the provision of subsidies tomany enterprises making losses. The economic reforms also included theintroduction of an income re-distribution policy through measures to increase thesalaries of lower level government employees and the imposition of price controlson a number of consumer goods. The fixing of the consumer price for rice hasinvolved a particularly rapid growth in budget outlay; rice subsidies to consumersincreased from about FMG 4 billion in 1975 to about FMG 12 billion in 1980.

37. The value of recurrent expenditures increased by about 19.5 percent perannum between 1977 and 1980 compared to a growth in budget revenues of about 10percent per annum. The growth of budget revenues is likely to have beensignificantly affected by the policy of decentralization in public finances whichgovernment introduced in 1978. This aims at giving greater revenue raisingauthority to the local governments (Fokonolonas). Although detailed information isstill not available on the effects of these budgetary changes, the data availableindicates a drop in total budgetary revenues in 1978, despite a continuing growthin tax revenues (see Annex Table 5.2). With the very disparate growth in currentrevenues and expenditures the deficit on current account increased from about FMG 3billion in 1977 to about FMG 38 billion in 1980.

38. The deterioration in the current account budget position between 1977 and1980 was accompanied by an unprecedentedly rapid expansion in budget capitalexpenditures. Capital expenditures were increased from about FMG 16 billion in1977, the level which they had fluctuated around since the early 1970s, to aboutFMG 55 billion in 1979 and FMG 105 billion in 1980. In 1980 capital expendituresalone were equivalent to about 95 percent of total budget revenues. As has alreadybeen stated (para. 10 above) detailed information on the composition of budget

6/ Stabilization Funds for main export crops deposit earnings, except for smallamounts to cover operating expenses, to a common account at the Central Bank calledthe Fonds National Unifie de la Perequation (FNUP). Beginning in 1977 these fundshave been transferred to the general budget account and used to financeexpenditures, especially rice subsidies and capital expenditures on the RegionalUniversity centres.

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capital expenditures in the 1978-80 period is still lacking; from availableinformation it appears that a considerable proportion of actual capitalexpenditures had not been foreseen in the 1978-80 Plan investment program and thatamonig the unforeseen elements, investment in the Regional University centres was amajor element. In 1980 capital expenditures on the Regional University centresaccounted for just under 25 percent of total budget capital expenditures. Amongother major capital expenditures which had not figured in the original 1978-80 Planprogram were: the purchase of a Boeing 747 aircraft, the purchase of a number ofmarine vessels for coastal traffic and considerable equipment purchases for a largescale rice project undertaken by the military authorities7 /.

Table 6. Central Government Expenditures and Revenues, 1977-80(FMG Billions)

1977 1978 1979 1980 a/

Recurrent Expenditures 87.7 98.9 131.8 148.8Capital Expenditures b/ 15.6 20.7 55.0 105.7Total Expenditures b/ 103.3 119.6 186.8 254.5

Budgetary Revenues 84.5 80.9 94.6 110.8FNUE' Receipts 11.8 18.1 19.5 15.5Total Revenues 96.3 99.0 114.1 126.3

Overall Deficits 7.0 20.6 72.7 128.2

Source: Ministry of Finance

a/ Estimatesb/ Including expenditures from extra-budgetary accounts of FNUP, Treasury and theCentral Bank.

39. The combined effect of the rapid upsurge in capital and current budgetexpenditures has been the dramatic increase in the deficit on government budgetaccount and unprecedented levels of government borrowing both from the Central Bankand from external sources. Borrowing from the Central Bank increased from aboutFMG 8 billion in 1977 to about FMG 42 billion in 1979 and about FMG 86 billion in1980. The government's net foreign borrowing which had averaged around FMG 4 to 5billion up to 1977 increased to about FMG 30 billion in 1979 and FMG 42 billion in1980.

40. The "investment boom" of 1978-80 coinciding as it did with a period whengovernment finances would in any event have come under increasing strain has,therefore, resulted in considerable disruption to the country's domestic monetaryand price stability and a sudden and dramatic increase in its externalindebtedness.

7/ OMIPRA - Office Militaire de la Production Agricole.

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(iii) Money, Credit a,nd Price Developments

41. Recent monetary and credit developments are summarized in Table 7 belowand shown in more detail in Annex Tables 6.1 and 6.2. The most salient featureslargely reflect the rising Government budget deficits and the resort to CentralBank borrowing for their finance. Net domestic credit which had grown by about 18percent per annum from 1975 to 1977 increased by about 40 percent per annum between1977 and 1980. The expansion was primarily attributable to general governmentborrowing mainly from the Central Bank. Net claims on government by the bankingsystem increased from about FMG 30 billion in 1977 to about FMG 180 billion in1980. At end 1980 claims on government accounted for about 55 percent of total netdomestic credit compared to about 23 percent in 1977. Since a large proportion ofcredit advanced to the private and enterprise sectors was in fact borrowing bystate enterprises and agencies it is likely that credit to the private sector perse has shown very little expansion.

Table 7: MONETARY SURVEY, 1975-81(Billion FMG, end of year)

March

1975 1976 1977 1978 1979 1980 1980 1981

Foreign Assets (net) 15.4 14.8 17.7 16.1 -32.5 -85.7 -42.1 -86.8Domestic Credit (net)a/ 90.6 101.8 125.8 151.6 221.1 329.3 235.3 345.3

Claims on Government 12.1 19.5 29.0 49.9 100.5 180.3 121.0 191.3Claims on Private Sector ^

and State Enterprises 78.5 87.3 95.8 100.7 120.6 149.0 114.3 154.0

Money Supply 86.8 100.2 122.0 143.0 175.5 208.0 169.7 213.5Currency outside Banka 34.0 35.3 41.6 48.2 53.5 70.3 51.7 67.7Demand Deposits 35.3 44.2 58.0 64.6 84.2 94.5 78.3 105.3Quasi Money 17.5 20.7 22.4 30.2 37.8 43.2 39.7 40.5

Long Tern Foreign Borrowing 3.4 2.8 3.3 3.0 _2.9 11.1 5.9 12.1Other (net)b/ 15.8 13.6 18.2 21.7 10.8 24.9 17.6 33.1

a/ Including onlending

.b Including counterpart rund.

42. The net foreign asset position of the banking system which had improvedin 1977 and 1978 as a result of favorable export developments deteriorated sharplyin 1979 and 1980 with the run-down of foreign exchange reserves to meet importpayments. Money supply has grown at about 20 percent per annum between 1977 and1980 compared to a growth in nominal GDP of around 13 percent per annum, suggestinga continued decline in velocity and increased cash holding on the part of thepopulation.

43. While government generally has been absorbing a significantly increasedshare of domestic credit this has not resulted in a more appropriate allocation tothe economic sectors. As Annex Table 6.2 shows, the share of credit to agriculturecontinued to decline and in 1979 was about 15 percent compared to almost 25 percentin 1977. The passive role accorded to interest rates in regulating bank credit ormobilizing savings continued up to 1981. Until then there had been no change in

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the interest rate structure since 1974 and most rates had remained at the samelevel as in 1969. The Central Bank's rediscount rate for short-term paper hadremained at 5.5 percent since 1969. Bank lending rates ranged from 6.75 to 9.25percent and interest rates on time deposits varied between 4.9 and 5.8 percent. InFebruary of 1981 a new interest rate structure was adopted; the Central Bank'srediscount rate was raised to 8 percent, bank lending rates and interest rates ontime deposits were raised on average by about 2 percentage points (see Annex Table6.3).

44. Available information on general price developments indicatesaccelerating inflation in 1979 and 1980. The official cost of living index forAntananarivo which had shown an average increase of around 4.5 percent per annumbetween 1975 and 1978 rose by about 14 percent in 1979 and by about 18 percent in1980. The information indicates that the price increase was relatively higher forlow income groups (traditional households) than for modern households. A widerange of commodities is formally subject to government price controls althoughthere is evidence that the controlled prices have become increasingly inoperativeover the last few years and that many goods are diverted to parallel markets. Theofficial cost of living statistics are, therefore, likely to considerablyunderstate the actual rate of inflation. Since the beginning of 1981 governmenthas adopted a somewhat more flexible price policy and increases in the controlledprices of a range of goods (e.g. meat, sugar, rice) and services (postal andtelephone charges, water rates, rail freight rates) have been announced.

(iv) Balance of Payments

Overall Developments

45. Madagascar's balance of payments position deteriorated dramatically overthe 1977-80 period. The current account deficit, which had averaged around FMG 8billion (US$33 million) from 1975 to 1977, rapidly increased to about FMG 109billion (US$515 million) in 1980, i.e., from less than 2 percent of GDP to around16 percent of GDP. From 1977 to 1980 the import bill virtually doubled whileexport earnings increased by around 3 percent. The overall balance which had beenin surplus by about FMG 3 billion in 1977 was in deficit by about FMG 59 billion in1980. Transactions with the rest of the world have been financed by a totalexhaustion of reserves, an unprecedented increase in foreign borrowing and byincurring substantial arrears on external payments obligations.

46. The increased import bill has been the most striking feature of recentbalance of payments developments. Average import prices increased substantially(over 40 percent) during the 1977-80 period and import volume showed approximatelythe same proportionate increase. While nearly all categories of imports increased,imports of capital goods grew at a particularly rapid rate and accounted forapproximately half of the increase in the import bill between 1977 and 1980.

47. The very modest growth in export earnings between 1977 and 1980 reflectscontinued inertia in export volume and fairly stationary world prices forMadagascar's principal exports (see Annex Table 3.11).

48. The deficit on services account more than doubled between 1977 and 1980primarily due to rising freight and insurance payments associated with rapidlyrising imports. Investment income payments also increased sharply from 1977 to

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1980 (from about FMG 2 billion in 1977 to about FMG 9 billion in 1980) reflecting

the increased volume of external borrowing and the rising share ofnon-concessionary finance in it.

Table 8. Balance of Payments(Billion of FMG)

1975 1976 1977 1978 1979 1980

Current Account

1. Merchandise Exp.(f.o.b.) 68.5 69.0 86.2 91.5 87.6 88.9

2. Merchandise Imp.(f.o.b.) 71.1 62.5 76.6 91.2 143.4 152.8

3. Trade Balance -2.6 6.5 9.6 0.3 -55.8 -63.9

4. Services (net) -23.5 -25.6 -26.9 -32.6 -52.8 -60.6

5. Current Transfers(net) 12.8 12.5 12.8 13.7 14.9 15.4

(i) Private -0.7 0.8 0.2 1.9 1.5 1.5(ii) Public 13.5 11.7 12.6 11.8 13.4 13.9

6. Current Balance -13.3 -6.6 -4.5 -18.6 -93.7 -109.1

Capital Movements

7. Direct Invest-ment (net) -0.3 -0.6 -1.0 -1.4 -1.4 -1.4

8. Government (net) 6.6 4.8 4.4 5.0 31.8 35.29. Private a/ 0.2 -0.2 2.7 8.0 22.8 14.910.Other capital (net) -0.4 1.0 1.4 5.4 -4.2 1.5

Reserve Changes(- = increase) 7.2 1.6 -3.0 1.6 44.7 58.9 b/

a/ Including government enterprisesb/ Including increase in payments arrears.

Merchandise Exports

49. Virtually all of Madagascar's major export products have shown astagnating or declining export volume trend over recent years.

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Table 9. Export Growth 1975-79Average Annualpercent change Structure of Exports 1979

Volume Value (%)

Coffee -1.6 28.2 45.4Vanilla -16.2 0.9 3.7Cloves -13.0 3.6 17.9Cotton 14.5 12.4 2.3Fish Products -18.0 11.3 4.4Chromite -12.5 -12.0 2.2Meat and Meat Products 2.8 10.0 4.0Petroleum -3.1 -25.9 2.7Other Exports - -3.2 16.0

Total Merchandise Exports -8.0 7.4 100.0

50. The volume of coffee exports which had shown a fairly consistent upwardtrend from 1972 to 1976 dropped sharply, by over 30 percent, in 1977 due mainly tothe effects of drought conditions on domestic production but also to some extentdue to increasing domestic consumption. Coffee export volume picked up moderatelyin 1978 and 1979 but in 1979 was still about 13 percent below the 1976 level. Theexport of cloves, the country's second most important export earner, is stronglyaffected by a three to four year domestic production cycle. From a peak export ofabout 22,000 tons in 1975 clove export declined to under 4,000 tons in 1977 andincreased again to about 13,000 tons in 1979. Natural vanilla, of which Madagascaris tide world's leading producer, was adversely affected up to the mid-1970s bycompetition from synthetic substitutes. With a shift back in preferences to thenatural product vanilla exports increased between 1976 and 1978 due mainly to thesizeable stocks which had been accumulated. Domestic production has been at verylow :Levels in recent years and with the exhaustion of stocks the volume of vanillaexports dropped sharply again in 1979. Similarly the decline in the volume ofsisal exports from 1975-79 has been due to a falling domestic production. Thevolurne of chromite exports has been significantly affected by port congestion, amajor reason for the decline in exports in 1979. Exports of cotton yarn andtextiles, although still accounting for a relatively low share of Madagascar'sexport earnings have shown a significant volume increase over recent years, thequantity exported in 1979 being over 70 percent above the 1975 level. The volumeof meat exports also increased somewhat over recent years although the volume ofmeat product exports has declined.

51. The generally declining export volumes were accompanied by ratherunfavorable movements in world prices. Average unit values for Madagascar'sexports declined in 1978 and although they picked up moderately in 1979 and 1980,at the end of the period they were still below the 1977 level. The world coffeeprice decreased by over 30 percent in 1978, increased somewhat in 1979 and declinedagain in 1980, in which year it was about 35 percent below its 1977 level. Thedecline in the world coffee price has continued during the first half of 1981. Theclove price also decreased; in 1979 it was about 20 percent below its 1977 level.On the other hand the vanilla price has shown a continued upward movement; in 1979

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it was almost 40 percent above the 1977 level. Most of Madagascar's other main

exports, especially chrome and cotton, showed price decreases over the period.

Merchandise Imports

52. The increase in import volume from 1977 to 1980 was primarily due torapidly growing imports of capital goods, intermediate goods and rice. Othercategories of imports, including fuel imports, showed little volume increase overthe period. Although the volume of non-food consumer goods imports remained atabout the same level, their share in the import bill continues to be relativelyhigh compared to countries at a similar income level. The growth of capital goodsimports was especially marked, increasing in volume by about 50 percent between1977 and 1979.

53. Average import prices also increased substantially, the most rapidincreases having been for capital goods imports and for imports of fuels. Riceimport prices also increased from 1977-80 during which period the official domesticconsumer price for rice remained unchanged.

54. The most conspicuous results of these volume and price movements havebeen the sharp rise in the shares of capital goods imports and rice in the totalimport bill.

Table 10. Composition of Imports(percent of current value)

1977 1978 1979

Rice 5.1 9.0 8.1Food and Beverages 6.5 5.4 4.6Other Consumer Goods 15.9 12.8 13.3Mineral Fuels 15.4 14.4 11.0Other Intermediate Goods 34.5 31.4 31.8Capital Goods 22.6 27.0 31.2

Total Merchandise Imports 100.0 100.0 100.0

55. Madagascar's terms of trade showed a continuous deterioration beteen 1977and 1980, decreasing by about 30 percent over the period.

56. The deficit on services account has increased significantly over recentyears, from about FMG 27 billion in 1977 to about FMG 60 billion in 1980. This wasprincipally due to rapidlly expanding freight and insurance payments associated withthe growing volume of imports (see Annex Table 3.2). Higher interest payments onthe growing external debt and the increased recourse to non-concessional sourcesalso resulted in a significantly increased deficit on investment income account.Madagascar's net receipts of transfers have increased moderately from around FMG 13billion in 1977 to about FMG 15 billion in 1980, due in large part to the reductionin outward remittances following from the increased "Malagasization" of the laborforce.

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57. On capital account the most significant development has been the growingvolume of external borrowing both by general government and by enterprises, mainlystate enterprises. The net inflow of non-monetary capital from 1975 to 1977 wasfairly stable averaging about FMG 6 billion (US$26 million). The major element wasthe inflow of medium and long-term loans to the central government although theinflow of loans to the enterprise sector increased significantly in 1977. Ondirect investment account there was a growing net outflow from 1975 following thenationalization of a number of private foreign enterprises.

58. With the liberalization in government policy on foreign borrowing the netcaDital inflow increased more than sevenfold from 1977 to 1980. Medium andlong-term loans to the central government increased from about FMG 4.5 billion(US$18 million) in 1977 to FMG 35.0 billion (US$165 million) in 1980. The netinflow to state and private enterprises also increased sharply from FMG 3 billionin 1977 to FMG 23 billion in 1979 but decreased to around FMG 15 billion in 1980.

59. Since 1977 when Madagascar's gross gold and foreign exchange reserves(about FMG 12 billion) were equivalent to about two months' import cover reserveshave been rapidly depleted and by end 1980 the gross reserve position (FMG 100million) was equivalent to less than one day's cover of current imports. The netforeign asset position of the country deteriorated even more seriously withexceptional borrowing by government in 1978, 1979 and 1980 to finance the balanceof payments deficit and by a rapid build up of arrears on current import payments.Payments arrears at end-1979 amounted to about FMG 3.5 billion and was almostentirely due to arrears on dividend payments. By end 1980 payments arrears hadgrown to about FMG 51 billion (US$240 million), the increase being entirely due toarrears on current trade payments. The net foreign asset position decreased fromaround FMG 9 billion in 1977 to a negative FMG 36 billion at end-1979 and negativeFMG 90 billion (US$425 million) at end 1980.

(v) External Debt

60. The level and composition of Madagascar's external public debt changeddramatically between 1977 and 1980. Prior to 1978 external debt grew very slowlyand at end-1977 the ratio of external public debt (outstanding and disbursed) toGDP was about 13 percent compared to an average of about 22 percent for low incomedeveloping countries. By end-1980 the ratio had risen to around 32 percent.

61. External public debt outstanding and disbursed which at end-1977 wasabout US$245 million more than quadrupled over three years and at end-1980 amountedto US$1,035 million. Most of the increase occurred in 1979 and 1980 whendisbursements reached US$335 million and US$437 million respectively, compared toan average annual disbursement of about US$45 million for the 1975-78 period.

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Table 11. External Public Debt Outstanding and Disbursed (end year)(US$ million)

PercentComposition

1977 1978 1979 1980 1977 1980

Suppliers Credits 17.9 34.7 105.8 156.3 7.3 15.1Financial Institutions 5.9 9.2 98.6 235.3 2.4 22.7Bonds 2.4 2.3 2.0 1.3 1.0 0.1Multilateral Loans 118.6 142.5 167.6 225.2 48.6 21.8of which: World Bank a/ (113.3) (122.3) (137.0) (161.6) (46.4) (15.6)Bilateral Loans 99.2 118.9 251.1 417.0 40.7 40.3

Total 244.0 307.5 625.1 1035.1 100.0 100.0

[Total including undisb. 456.4 803.9 1282.2 1551.9]

a/ IBRD, IDA and IFC

62. The structure of Madagascar's external debt has also changed radically.While borrowing from all sources increased significantly the growth in supplierscredit finance and in borrowing from financial institutions was particularlyrapid. At end-1980 debt to financial institutions and to suppliers credit sourcesaccounted for about 38 percent of total external debt compared to about 10 percentat end-1977. Bilateral loans also increased rapidly; loans from traditionalbilateral sources, e.g. China, France, Germany (F.R.), Japan, USSR, all increasedbut the increase in bilateral lending was mainly due to new sources - Algeria,Canada, Iraq, Kuwait and Saudi Arabia.

63. The change in debt structure was accompanied by a significant hardeningin borrowing terms. In 1977 new commitments had averaged terms of 4.6 percentinterest, 23 years maturity and about 5 years grace - a grant element of about 38percent. The average terms8 / of new commitments in 1980 were, interest 7.5percent, maturity 17 years and grace period 3.8 years - a grant element of about24 percent.

64. Debt service payments obligations have, therefore, shown a sharp increasefrom about US$14 million in 1977 to about US$60 million in 1980, i.e. an increasein the debt service ratio from around 4 percent in 1977 to about 12 percent in1980. The main burden of debt servicing from the greatly increased borrowing ofthe 1978-80 period, however, falls in the years 1981-84. Debt service due on end-1980 external debt is likely to represent a projected debt service ratio of about30 percent in 1981 rising to about 50 percent in 1983 and still around 40 percentin 1984.

65. These projections take account of the debt relief already granted toMadagascar under the terms of the agreement with the Paris Club in April 1981.

8/ Average terms are calculated as of the date of commitment. Since many loansare on variable terms, e.g. LIBOR plus, the average terms may understate the actualinterest rates payable.

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This agreement provided debt relief on certain maturities falling due in theeighteen month period January 1981 to June 1982 but with increased paymentsbecoming due from 1983 onwards:

Debt Service: 1981 1982 1983 1984 1985(US$ millions)

Before debt relief 168.6 213.0 211.4 190.4 145.7After debt relief 115.9 187.8 237.7 215.3 164.0

The agreement has, therefore provided only temporary relief with a significantlygrowing burden in the immediately succeeding years. It is likely that Madagascarwill have to seek further relief on its debt service obligations and given thecountry's balance of payments prospects, it may need to be extended over a longerperiod of time.

(vi) Summary - Recent Economic Developments

66. In the 1977-80 period Madagascar's economic and financial situation has,therefore, undergone traumatic changes. By end 1980 the country's problems onbalance of payments and public finances had reached critical proportions. At thesame time virtually no progress had been made in securing a broader and moredynamic production base for development and the real income of the population hadcontinued to decline. It would, of course, be unfair and artificial to ascribe thecurrent critical situation solely to policies and developments in the 1977-80period. The lack of adequate production growth has characterized Madagascar'seconomy over the longer term. Furthermore domestic development efforts have had tocontend with a substantially more difficult international environment. The termsof trade moved significantly against Madagascar and the international climate, withgeneral recessionary conditions in developed country markets, has been unfavorablefor growth of Madagascar's primary product exports. Also while much of the abovehas contrasted actual developments with the general parameters of the 1978-80 Planit must be admitted that the Plan had never been supported by effective measuresand resources for its implementation. As has been shown above, actual developmentshave departed very significantly from the Plan's profile. It, nevertheless,remains true that the general strategy of a vigorous investment thrust which waspursued in the 1978-80 period had been devised without due regard to realisticresource availabilities and was implemented in a way which revealed very seriousshortcomings in the management and deployment of the nation's resources.

III. CURRENT POSITION AND DEVELOPMENT PROSPECTS

67. Madagascar is currently in process of preparing its second medium-termPlan covering the years 1981-86. This is being undertaken at a time when theeconomy faces very critical short-term problems. The public finance, monetary andexternal payments positions of 1980 clearly do not constitute a viable base from

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which development can proceed. The immediate and cardinal requirement for policy

maragement iAs therefore, to effect sizeable and lasting corrections to the presentdisequilibria. While this clearly should be done in a way which does notjeopardize the economy's medium and longer-term development potential, the focus ofpolicy action must initially be on the shorter term. It is, therefore, necessaryto review the extent of the adjustments which will be required in the next year ortwo to stabilize the economic and financial situation before consideringdevelopment prospects over the medium term.

68. During the past six months or so government has taken a number of actionsto correct some of the economy's underlying weaknesses. Reference has already beenmade to the increases in producer prices which were adopted for a range ofagricultural products in January 1981. The increases covered all of Madagascar'sagricultural exports and represented larger upward changes (average 16 percent)than had previously been made. This is a positive move to providing more realisticincentives to agricultural production and export. The government has also moved toa more realistic pricing of consumer goods and services; in December of 1980controlled prices for meat, flour and petrol as well as rates for postal,telephone, electricity and water services were increased. In May 1981, thecontrolled consumer price for rice, which has always been regarded as a verysensitive political issue and had remained unchanged since 1978, was increased by17 percent. In August of 1981 rail freight rates were raised by 17 percent. Therate increases for utility services should improve the financial position of thegovernment enterprises concerned.

69. The operations of the large number of parastatal agencies have generallyconstituted a bottleneck to the effective and economic supply of a wide range ofgoods and services. Government has recently initiated inquiries into theoperations, management and financial situation of these parastatals. World Bankassistance for a review of agricultural parastatals is already being provided.Again, with the help of a World Bank credit an innovative project to improvestandards and training for public accounting has recently been started. Althoughthe effects of most of these measures will take some time to work out theyrepresent an important change in policy attitude in acknowledging the role of theprice mechanism in the economy.

70. In April of 1981 relief on external debt payments was sought and obtainedfrom Paris Club creditors. The agreements provide for a rescheduling of about 35percent of amounts of debt service payments due in the 18-month period to June1982. A debt rescheduling agreement was also concluded with the Soviet Union inFebruary 1981. While Madagascar's debt servicing burden remains high, theagreements provided significant relief. Government has also been actively seekingexternal assistance for general balance of payments purposes from a number ofbilateral and multilateral sources. In May 1981, an interest free loan of US$10million was granted by OPEC; loans on concessionary terms have also recently beengranted by Algeria, France, Iraq and the Soviet Union. The Government has alsorecently submitted a request to the World Bank for a non-project assistance credit.

71. The action which was expected to have the most immediate and generaleffect on the economic and financial situation in the next year or so was the

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stand--by agreement concluded with the International Monetary Fund in April 1981.This provided SDRs 109 million to be drawn up to end June 1982. The stand-byagreeEment required limits on public expenditure and on government borrowing fromthe Central Bank, limits on new external borrowing and a reduction in externalpayments arrears. It also involved an obligation to consult with the IMF atsix-monthly intervals on exchange rate policy.

72. To August 1981 Madagascar made drawings of SDRs 39 million but by then ithad become clear that Madagascar would have difficulty fully complying with theStand--by performance conditions. This was in part due to unanticipated shortfallsin export earnings resulting from very weak world coffee prices and to a smallerthan expected inflow of new capital from international commercial banks.Madagascar has not, therefore, requested further drawings and negotiations with theIMF are still in process on the terms for a possible resumption of the Stand-byprogram. The original program aimed at achieving corrective adjustments on balanceof payments and public finances for 1981 of the orders of magnitude set out inTables 12 and 13 below. Lengthy time-lags in economic and financial statisticsbecoming available make it extremely difficult to judge the extent to which theadjustments are in fact being realized or to determine the additional measureswhich might be required to achieve them. Nevertheless adjustments of this orderare clearly required if the short-term position is to be stabilized and a moresecure basis laid for future economic development.

73. Balance of Payments. A substantial improvement in the balance ofpayments position is clearly necessary. Prospects for an increase in exportearnings are poor; coffee prices are projected to remain, at best, stationary andprices of other major exports to show little change. Export receipts are,therefore, likely to show little change between 1980 and 1981. The import bill canobviously be assessed on the basis of the minimum requirements for some modestdevelopment or as a residual determined by external payments possibilities. Anassessment according to the former criteria puts the 1981 merchandise import billat about 15 percent below its 1980 level, i.e. allowing for the likely import priceincrease, a reduction in the volume of imports of just over 20 percent between 1980and 1981, and a 1981 volume of imports more than 30 percent below the 1979 level.

74. As can be seen from the illustrative figures in Table 10 below, an importreduction of this order together with a consequent reduced outlay on servicesaccount would reduce the current deficit by about 25 percent. On capital accountdisbursement from existing and new commitments of medium and long term capital,together with the effects of debt rescheduling, should enable the net disbursementin 1981 to be maintained at just above its 1980 level. The overall deficit of FMG26 billion while substantially reduced would still require a large inflow ofadditional external financing. IMF resources could, subject to the effectiveimplementation of the program, provide around FMG 20 billion. However account hasalso to be taken of the need for a substantial reduction in trade payments arrearswhich amounted to over FMG 50 billion at end 1980. This will be necessary torestore Madagascar's access to international commercial capital. While a number ofthese elements are difficult to quantify, there is likely to be a significantexternal financing gap of FMG 12-15 billion. The import level in 1981 is,

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therefore, likely to have to be cut back significantly further than the figures inTable 12 suggest. Even with a large restructuring of imports to spare parts andraw materials, the level of economic activity in 1981 will inevitably beconsiderably reduced.

Table 12. Balance of Payments(FMG billion)

1980 1981Current Account:Exports (f.o.b.) 88.9 91.4Imports 152.8 131.6Trade Balance -63.9 -40.2Services (net) -60.6 -57.1Transfers (net) 15.4 15.3Current Balance -109.1 -82.0

Capital Account:Direct Invcestment -1.4 -1.4Government (net) 35.2 )Private 14.9 ) 54.6Other Capital (net) 1.5 )

Overall Balance -58.9 -25.8

75. In 1982 world coffee prices are likely to improve somewhat and thistogether with increased production and export of cloves could secure a moderateincrease (around 10 percent) in export receipts. External financing will, however,continue to impose a very tight constraint and it is unlikely that the volume ofimports in 1982 could rise much above its 1981 level.

76. Public Finances. The prospects for a substantially decreased deficit ongovernment account will depend essentially on the success in reducing governmentexpenditures. Reduced imports and a generally lower level of economic activitywill diminish the base of revenue raising so that even with higher rates oftaxation (e.g. on petroleum) and new tax measures (e.g. the turnover tax) budgetrevenues in 1981 are likely to be somewhat below their 1980 level. Governmentcurrent expenditures cannot be substantially reduced in the short-term but wouldhave to be contained at about their 1980 level in real terms. The immediateadjustment would, therefore, have to be a dramatic cutback in capitalexpenditures. Since a large proportion of budget capital expenditures in 1979 and1980 was in the social sectors (especially education), the cutback could beeffected initially with relatively less impact on production sectors. Theadjustment target would be an overall deficit about half its 1980 level. Withexternal finance in 1981 likely to be maintained at about its 1980 level, the netdomestic financing of the budget could fall from around FMG 85 billion in 1980 toabout FMG 27 billion in 1981.

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Table 13. Central Government Expenditures and Revenues(FMG billions)

1980 1981

Recurrent Expenditures 148.8 163.7Capital Expenditures 105.7 31.8Total Expenditures 254.5 195.5

Budgetary Revenues 110.8 107.2FNUP Receipts 15.5 19.6

Total Revenues 126.3 126.8OveraLl Deficits -128.2 -68.7

77. Prospects for 1982 indicate that budget revenues would be unlikely toshow any significant increase given a continued reduced import level and only amodest pick up in general economic activity. Capital expenditures could not bereduced further or even maintained at the low level of 1981 without adverseconsequences for future production capacity. In particular rehabilitation andrenovation of the transport system will require a rising volume of capitalexpenditures. An improved public finance position (the deficit foreseen for 1981would still be equivalent to around 10 percent of GDP) will, therefore, cruciallydepend on reducing recurrent expenditures. The government's own employment policyis a key element; the wage and salary component of total recurrent expenditures hasaveraged around 55-60 percent of recurrent expenditures over recent years and hasbeen one of the fastest growing components. Government has recently adopted apolicy of "freezing" public sector employment - this policy would have to bemaintained and extended with reductions in the volume of public sector employment.

78. The magnitude of the adjustments required will obviously have a seriousimpact on the level of economic activity in 1981 and 1982. There is alreadyevidence that acute shortages of imported raw materials and intermediate goods arecausing shutdowns and serious dislocations in the manufacturing sector and it isestimated that more than 30 percent of road haulage vehicles are out ofcommission. Preliminary estimates suggest that real GDP in 1981 may be about 8percent below its 1980 level and that only a modest growth of 1 or 2 percent islikely in 1982. Agricultural output in 1981 is not only being adversely affectedby shortages of inputs but also by a recurrence of drought conditions in a numberof regions.

79. The general disregard of realistic resource availabilities in thepolicies pursued over recent years has clearly precipitated a situation in whichdevelopment potential has to be subordinated, in the shorter term, to arrestingdecline and restoring more favorable development conditions. Current problemscannot, however, be solely ascribed to the policies and developments of most recentyears, they reflect also more long-standing weaknesses in the economy and thefailure of economic policy to address them adequately. Even with the correctiveadjustments successfully implemented over the next year or two a more rapid andviable development in the medium term will depend on vigorous efforts to correctthe underlying structural weaknesses.

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Medium Term Prospects and Policies

80. Preparation of a second Medium Term Plan for the period 1981-86 is stillin process. The general lines and objectives have been set out9 / but a detailedquantitative framework and supporting policy action program have not yet beenestablished. The general statement is, nevertheless, noteworthy in suggesting aconsiderable re-orientation in policy thinking. It acknowledges the major economicproblems to be: (i) an unsatisfactory supply situation; (ii) inadequate employmentgeneration; (iii) deterioration in production capacity and general economicinfrastructure. The overriding Plan objective is declared to be increasedproduction, especially to achieve greater self-sufficiency in meeting foodrequirements and in securing a more rapid growth in export earnings. Madagascar'spast development efforts have been strongly characterized by the inadequateattention paid to the stimulation of output growth and raising income levels and bya failure to appreciate the serious resource constraints imposed when per capitaincome is stagnating or declining. As has already been demonstrated the 1978-80Plan's expectations on the growth of domestic savings were quite unrealistic andunsupported by specific measures to promote them.

81. Effective attainment of increased domestic production and incomegeneration will, however, require a wide range of policy actions; to ensurenecessary supplies, to provide incentive to additional production effort, and toensure appropriate marketing and distribution services. Improved agriculturalperformance is a key element for the economy's development.

82. Agriculture. The effects of poor agricultural performance have beenpervasive: (i) in failing to meet domestic food requirements (especially rice);(ii) stagnant or declining exports of coffee, vanilla, cloves, the principal exportearners; (iii) inadequate and irregular supplies of raw materials to domesticindustries, e.g. sugarcane, groundnuts, cotton. Average yields have been generallydeclining over a fairly lengthy period and it is clear that improved extensionservices are needed to secure a wide range of improvements in cultivation methods.The sector has generally had an inadequate allocation of foreign exchange,budgetary and investment resources. The Government's policy of keeping producerprices low has been a major disincentive to improved practices and increasedoutput. While pricing policy has been made more flexible in the last year or two,better agricultural performance in the medium term will depend on keepingagricultural prices under review to ensure that an adequate production response isforthcoming. Furthermore, the agricultural parastatals through which nearly allsupplies are channeled and which are responsible for the marketing and distributionof most agricultural production generally operate very inefficiently. Wide rangingimprovements in the technical, managerial and financial operations of theseagencies are needed if the agricultural sector is to secure the supporting servicesit requires. Similarly effective improvement in agricultural production and supplywould depend on a substantial rehabilitation and upgrading of the country'stransport system.

9/ "Resume du Projet de Deuxieme Plan, 1981-86", April 1981.

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83. A wide ranging policy effort is, therefore, needed to improveagricultural developraent. This can only be achieved through a systematic and wellcoordinated plan or program for the sector as a whole. Government has onlyrecently begun to prepare such a plan and specific measures and action programshave yet to be established. However as already stated the general guidelines forthe 1981-86 Plan are noteworthy in identifying agricultural development, both forgreater food self-sufficiency and increased export earnings, as the key element inthe strategy to be pursued. A number of products (rice, groundnuts and coffee)have been designated for priority development including investment and foreignexchange allocation for import of seeds and fertilizers. A program for therehabilitation of the irrigation system is also being drawn up. The guidelines forthe 1981-86 Plan also explicitly recognize the need to provide more adequate priceincentiLves to producers and to greatly improve the efficiency and financialposition of the agricultural parastatals. Recent increases in agriculturalproducer prices (e.g. January 1981) have been more extensive in commodity coverageand in the amount of the increases established. Furthermore, Government has made astart, through a recent World Bank mission, in reviewing the activities ofagricultural parastatals and seeking recommendations for their more efficientfunctioning. While these actions and statements clearly testify to the shifttoward agriculture in policy orientation, a detailed action program for the sectoras a whole remains a most urgent priority.

84. Manufacturing. The manufacturing sector was expected to provide aleading stimulus to development in the first Medium Term Plan period. This failedto materialize; the sector showed very erratic development and over the most recentperiod has been experiencing acute supply problems and serious difficulties inassuring continued production even at low levels of capacity utilization. Annex 1presents a general review of Government's industrial policy over recent years andindicates the policy changes which would be required for a more rapid and viabledevelopment of the sector.

85. The sector has suffered from an inadequate and erratic supply of domesticand imported raw materials and inputs. Price controls and import quotas have haddetrimental effects on industrial expansion. Similarly export quotas have resultedin higher prices being charged to domestic consumers to compensate for losses onexports. Generally industrial policy has paid little regard to effectivecomparative advantage and domestic resource costs. The Government's ambivalentattitude to the private sector and continuing uncertainties on the implementationof the Charter of Socialist Enterprises which Government promulgated in 1978 havenot been conducive to an orderly development of the sector. As in the case ofagricu:Lture the large number of industrial parastatal agencies generally haveserious deficiencies in their technical, managerial and financial operations.

86. Policy for manufacturing in the medium term has to be directed towards afuller and more efficient use of existing capacity. Too much emphasis in the pasthas been placed on new investment and new capacity without regard to rates ofreturn or emnployment effects. The serious resource constraints which confront theeconomy over the medium term preclude a continuation of such policies. Theguidelines for the 1981-86 Plan propose a strategy in which priority will be given

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to domestically self-sufficient industries such as metals, construction materialsand energy. It also clearly states that priority will be given to rehabilitationand maintenance of existing plant and infrastructure rather than to newinvestment. It also recognizes the need to encourage medium and small scaleenterprises more in accord with realistic demand and cost considerations.

87. Transport. The urgent need to rehabilitate the transport system has beenemphasized at various points above. Transport infrastructure poses difficultproblems in Madagascar because of the size of the country and the sparseness of thepopulation, but it is also where Government policy has been weakest. Many areasare difficult of access, especially in the rainy season, so that marketing produceand delivering inputs are costly and erratic. The only solution is a long termprogram for developing and maintaining rural roads. The Government has preferredto construct trunk roads, but has to date been unable to provide a reliable linkbetween the main port of Toamasina and the highland areas, where the'capital cityand most industry are located. M4oreover the parallel railway link is plagued withproblems of management and equipment. The Government realizes the urgency of theproper functioning of the railway and has recently accepted technical assistance.In the medium term it must concentrate on the rehabilitation of the most importantparts of the existing transport network.

88. Experience of the past few years has not only revealed serious weaknessesin policies and programs for particular sectors it has also demonstrated criticalshortcomings in the general management and control of economic resources. DespiteGovernment's general commitment to economic planning, economic management andcontrol has lacked coordination and failed to establish adequate institutional andadministrative arrangements for the implementation of programs and policies.Developments in the 1977-80 period bore little relation to Plan prescriptions anddeteriorating situations on balance of payments and public finances were allowed toreach virtually critical proportions before corrective action was initiated.Government has recently introduced procedures to ensure a more systematic andcoordinated assessment of import needs and allocation of foreign exchangeresources. It has also created an External Debt Committee charged with monitoringthe incurrence of external debt and maintaining comprehensive and up to daterecords. A UNDP sponsored scheme for the training of economic planners andmanagers is at an advanced stage of preparation.

89. Medium term prospects depend on more effective and responsive managementand use of resources. This will generally require a strengthening of economicmanagement and planning procedures and a much greater degree of inter- ministry andagency coordination in establishing and implementing programs. Specifically thereis a need to establish new or improved administrative procedures for:

(i) Foreign exchange budgeting and allocation of foreign exchangeresources to priority import and payments needs.

(ii) Establishment of a Two to Three Year Public Investment Program, whichis specific as to project content, timing and phasing of investmentsand agreed means of financing. This would require a strengthening of

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project appraisal capability and a coordination of public investmentdecisions.

(iii) Procedures for ensuring integration of the public investment programin annual budget preparation and expenditure allocation.

(iv) Coordination of external debt management especially in controllingand monitoring the incurrence of external debt obligations.

90. Government has already announced its intention to create specialcommittees for Public Investment and for External Debt Management. It is alsomaking arrangements to establish formal training courses in economic management andplanning for staff at various levels in the public administration.

91. Prospects for the coming years will depend crucially on early andtangiblLe success in improving the institutional and administrative framework.This, as recent Government actions and statements appear to recognize, is not sothat Government control and direction of the economy can be extended further butrather that with a clearer and more realistic statement of its objectives and animprovement in the efficiency of its own operations, Government will be able tocreate an environment which provides real incentive to increased economic effort.

92. These policy reorientations which are a necessary condition for improvedeconomic performance will have to be effected under tight resource constraints forthe economy. The extent of the balance of payments and public finance adjustmentsrequired in 1981 and 1982 have already been discussed. These constraints willcontinue over the medium term with foreign exchange availability exercising analmost dominant role on the possibilities for development. The medium termprojections in Tables 14-16 below illustrate the likely parameters of developmentand also the general strategy which will have to be pursued.

93. Balance of Payments Prospects. Export earnings are likely to show only amoderate growth in the medium term. The volume of coffee exports will be containedby the time required for replanting and improved crop maintenance programs to havean effect on production. The volume of clove exports is likely to decrease after1981 w-ith the effects of the clove production cycle. Prospects for increasedvanilla exports are somewhat better; the trend towards natural vanilla and awayfrom synthetic substitutes has created favorable demand conditions and domesticproducrWion appears to be responding to the higher producer prices of recent years.Some ofE Madagascar's minor exports such as sugar and textiles could show a morerapid growth as problems of domestic and imported raw materials and inputs areresolved. Export price prospects are also only moderately favorable. World coffeeprices are projected to pick up after 1982 and then show an increase of about 7-8percent per annum. Clove and vanilla prices are projected to grow at around 6-7percent per annum. Merchandise export earnings on these assumptions would grow ataround 12 percent per annum from 1982-86.

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94. On merchandise imports the projections assume both a strict containmentand a significant restructuring compared with recent experience. Food imports areprojected to be progressively reduced over the period which, in particular, impliespositive results from intensive efforts to increase domestic rice production.Capital goods imports are projected to be cut back further in 1983 with allowancefor some increase only from 1984 on. Petroleum imports are projected to show onlya moderate growth as production from domestic sources comes into effect towards theend of the period. Most of the growth in imports would, therefore, be in importsof raw materials and spare parts. Import prices are projected to increase by morethan 10 percent per annum so that the terms of trade will continue to deteriorate.

95. The deficit on current account is therefore projected to show littleimprovement in 1983 and even to widen somewhat thereafter. Debt servicing willcontinue to claim a high share of foreign exchange resources over the medium term.External debt service payments obligations are, on the basis of provisional data,likely to amount to about US$200 million in 1981 and are projected to be aboutUS$240 million in 1985. Service on external debt incurred in the 1977-80 periodamounts to about US$180 million in 1981 and would still be about US$160 million in1985. The debt service ratio, which could be about 30 percent in 1981 would, onthe basis of the projections, be about 50 percent in 1983.

96. Madagascar's net external capital requirement on a disbursement basis isprojected to increase from about US$270 million in 1981 to about US$450 million in1986. This will require a very considerable growth in new external loan and creditcommitments. There are a number of sources which if utilized more fully couldincrease the inflow of capital. Among multilateral sources, BADEA, IFAD, and theOPEC Special Fund, have so far provided only one loan each, and assistance from theEEC, the AfDB, and the EIB has been very small. Similarly among concessionalbilateral sources, Arab OPEC members have been used remarkably little, with theexception of Iraq, and among OECD countries, assistance has come mainly fromFrance, Germany and Japan. The scope for increasing bilateral and multilateralinflows may therefore be substantial. The socialist countries have also emerged assources of considerable assistance to Madagascar, providing US$120 million during1978-80. It is difficult to predict their future lending, but the recent levels ofassistance and the rescheduling of some of the debt to the USSR are encouragingsigns.

97. Obtaining increased external assistance at the level projected,nevertheless, remains uncertain in the current and prospective internationalfinancial climate. A realistic and persuasive development policy program from theGovernment should help mobilize international support. However, even with vigorousdomestic policy actions the pace of development will be substantially governed byforeign exchange availability.

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Table 14. Balance of Payments Projections 10/(US$ Million)

1980 1981 1982 1983 1986

Exports of goods and services 478.5 387.6 420.0 474.9 646.7Of which: Merchandise f.o.b. 420.7 345.0 368.1 414.6 569.3

Imports of goods and services 1047.7 718.0 789.2 826.9 1172.5Of which: Merchandise f.o.b. 723.1 495.0 565.2 564.4 844.8

Net transfers 72.9 71.5 82.1 87.6 108.8

Current account balance -516.3 -258.9 -287.1 -264.5 -417.0

Private direct investment -6.6 -6.1 -6.1 0.0 6.7MLT loans (net) 269.7 199.9 241.4 227.7 377.0Other capital -25.6 71.1 71.8 76.8 76.8Change in reserves -278.8 +6.0 +20.0 +40.0 +36.0

International reserves .. 48.0 68.0 108.0 184.0

Reserves as month's imports .. 0.8 1.0 1.6 1.9

98. The Government budget account is likely to remain under tight constraintsand there is little prospect, over the medium term, of any surplus on Governmentaccount. With initially reduced and subsequent slow import growth and onlymoderate prospects for export expansion the tax base will not expandsignificantly. Even with tax rate increases Government revenues will not grow at asignificant rate. Since Government expenditures (current and capital) haverecently been over 50 percent higher than budget receipts even large cutbacks inbudget capital expenditure and a sharp deceleration in recurrent expenditure growthwill not result in Government current account savings. The position of theGovernment budget account will continue to be an important determinant of the trendof domestic savings and with the prospect of at best only moderate growth inoverall activity, the growth of incomes is unlikely to generate any increase in theoverall domestic savings rate.

99. Domestic Investment will, therefore, be largely determined by foreignexchange availabilities (export earnings and new external borrowing). As is clearfrom the balance of payments projections any significant increase in externalfinancing requirements would be very unlikely to be realized. However, as has beenstated above the economy has so far conspicuously failed to make adequate use ofthe capacity which already exists and there is, therefore, scope to stimulategrowth without substantial new investment. The development strategy which theprojections suggest depends crucially on a more effective utilization of existingproduction capacity and a limitation of new investment expenditures. Therehabilitation of the transport network, exploitation of oil resources and, to alesser extent, the irrigation of agricultural lands may require important newinvestments. However, generally for the manufacturing sector and for much of the

10/ See Statistical Annex Table 3.1 for retrospective balance of payments data inUS$.

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provision of social services (education, health, etc.), increased output and supplywill depend on the ability to use existing plant and infrastructure facilities morefully and effectively. The projections assume that such a strategy is pursued andthat a recurrence of the consequences of pushing investment expansion beyondeconomically useable resources, as happened in the 1978-80 period, will beavoided. The share of investment in GDP is projected to decrease sharply and by1986 to be about the same proportion as prevailed in the middle 1970s.

Table 15. Use of Resources(percent of GDP)

1981 1982 1983 1986

Consumption 92.2 94.1 95.3 93.5Investment 15.8 14.0 12.0 12.5Government Revenues 14.2 16.0 15.5 15.7Gross Domestic Savings 7.8 5.4 5.0 5.2Resource Gap 8.0 8.6 7.0 7.3

100. Consumption in real terms is assumed to grow at a somewhat more rapidrate than overall population. Public consumption expenditures would show verylittle growth - around 2 percent per annum - over the 1982-86 period and privateconsumption expenditures at around 4.5 percent compared to a projected populationgrowth of 2.7 percent per annum. In view of the low level and recent downwardtrend in per capita consumption, allowance for some growth is deemed to be anecessary condition of enlisting the support of the population in the developmenteffort.

Table 16. Growth of GDP(percent per annum)

1982-86

Consumption 3.5Gross Capital formation -0.2Exports Goods and NFS 6.2Imports Goods and NFS 3.1Gross Domestic Product: 3.3

Agriculture 3.1Industry 5.0Services 2.9

101. The projections indicate that GDP growth of around 3 to 3.5 percent overthe medium term is about as much as available resources will permit. Even this lowexpansion in activity would require fundamental structural adjustments in theeconomy which should, however, provide a stronger basis for development in thefuture, in line with Madagascar's endowment of physical and human resources.

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Annex 1. Industry Sector Policy

1. The level of industrial activities and the allocation of manufacturinginvestments have been increasingly subject to public planning and intervention.The Government's control over the sector has been achieved either through directnationalization or participation of the Industrial Development Bank (BNI). Threedifferent types of parastatals have emerged as a result of the Government's directinvolvement in industrial activities:

(a) Enterprises with private management in which Government holds themajority share. The major textile factories are in this categorywhich is the least affected by direct Government intervention;

(b) Public enterprises which operate under the close supervision of therelevant Ministry; and,

(c) Socialist Enterprises which fall under the legislation of the Charterof Socialist Enterprises promulgated in 1978 (see Attachment 1). Allenterprises in which the Government holds 51 percent or more of thecapital are intended to become, ultimately, Socialist Enterprises.The Socialist Enterprise is administered by a general manager and a"Comite de Gestion" which includes representatives from theGovernment, local communities and workers. The management isresponsible to a policy council "Conseil d'Orientation" whichsupervises all the Socialist Enterprises in a particular sector. Atpresent, the ad-hoc committees of the Conseil Supreme de laRevolution (CSR) function provisionally as "Conseils d'Orientation".

2. The Government has been cautious and pragmatic in the application of theCharter of Socialist Enterprises.l/ The deadline for the conversion ofenterprises - with 51 percent or over government capital participation intoSocialist Enterprises has been extended several times, mainly due to the lengthyand difficult process of establishing responsible and competent "Comites deGestion". There are at present only five industrial Socialist Enterprises engagedin mining (KRAOMA), naval construction (SECREN) manufacturing of jute bags (FITIM),agricultural machinery (TOLY) and confectionery (SOCOBIS). It is difficult todetermine the criteria for conversion to Socialist Enterprise. The Charter itselfdoes not provide any economic or social criteria to be used in its application.The conversion decisions do not seem to have been particularly influenced by thestrategic importance or the economic characteristics of the enterprises. Rather,

1/ A description of the Charter is given in Attachment 1.

- 33 -

the choice seems to have been limited, so far, to enterprises where the transitioncould be achieved without too much conflict.

3. It is also difficult, at this stage, to assess the effect ofnationalization on the efficiency of enterprises because: (i) mixed enterprisesunder private management are operating with minimal direct state interference; and,(ii) most of the industrial enterprises which have been totally nationalized and/orconverted to Socialist Enterprises were already virtually bankrupt. As theseenterprises suffered from initial weak capitalization, transfers from the Treasurywere inevitable and amounted to FM 1457.9 million during the period 1977 tomid-1980, roughly 10 percent of total Treasury transfers during the period. Themajor beneficiaries were SECREN2/ which absorbed over 50 percent of the totaltransfers to industrial parastatals - representing 20 percent of its turnover in1978-79 - and the sugar and match factories.

4. Uncertainty about the Government's attitude to the private sector has ledsome private entrepreneurs to seek State participation in their enterprises. Forinstance, the transport equipment industry - comprising three assembly plants -which reportedly stopped its activities because of non-availability of importedcomponents, is seeking Governmental participation and assistance in adapting itsexisting idle capital stock to alternative uses.

5. The main incentive accorded to manufacturing industry has been protectionagainst competition from imports. This has been provided partly through tariffsand related charges but more importantly through a quota system, even if domesticproduction is insufficient to meet local demand. Domestic competition is impededby a cost-plus pricing system and the allocation of imported and domestic inputsstrictly in proportion to installed capacity.

6. Fiscal and other incentives for both the public and private sector, whichinclude an abatement of customs duties on imported equipment and/or income orcorporation tax relief for up to five years and granting of priority in theallocation of foreign exchange and the sale of goods and services to public bodies,are spelled out in the Investment Code of 1973. The Code lacks automaticity andleaves a large degree of freedom to the Government in the selection of projects tobenefit from fiscal incentives. So far, few enterprises have taken advantage ofthese incentives because of the cumbersome, protracted and uncertain administrativeprocedures involved. There is a need to revise and clarify the conditionalities ofthe Investment Code, particularly to bring it more in line with the recent changesintroduced in economic policy which advocate greater State intervention in thesector and a close control of private and foreign capital.

2/ Soci6t6 d'Etudes de Construction et de Rgparation Navales.

- 34 -

7. The Government has not yet committed itself to the provision ofincentives to exporters of manufactures. The ordinance of 1973 (Ordinance no.73-059, Relative a la Promotion des Exportations) broadly defined the financialincentives likely to be accorded to exporters. These were to include: anabatement of customs duties on imported inputs as well as of taxes on locallyproduced inputs, relief from export tax, reduction in corporate or income taxes,priority in the allocation of foreign exchange, availability of credit facilities,and provision of technical assistance such as training of personnel, informationabout market prospects, marketing facilities, quality control, etc. The ordinancerequiress specific legislation and has never become operational.

8. The Government has not given high priority to financial incentives toexports or considers them as last resort measures. Instead of using the pricemechanism and fiscal incentives, it intends to increase exports by selectingenterprises potentially capable of exporting and setting export quotas that have tobe met. A circular sent to selected enterprises in 1980, stipulated that theseenterprises should finance their imports of raw materials from their own exportreceipts.

9. Indirect public control over the industrial sector has been throughimport quotas and price controls. Imports are grouped into two broad categories:inputs authorized within the framework of the annual import program and inputs thatare in principle prohibited. There are two categories of quotas, those open tomercharnts and those open to industrial enterprises and other importers who arefinal users of the product. As most of foreign trade and allocation of importlicences are controlled Government has a determining role in the composition andquantity of imports. In a few cases (e.g. batteries for household and automobileuse) the Government has used import regulation to compete with a high-priced or lowquality domestic output. The Government is in effect using its control of importquotas in a discriminatory way.

10. The price control system is mainly aimed at controlling the final priceof locElly manufactured products since importers can automatically pass their costincreases on the domestic sale price of imported products. Control is exercisedthrough a cumbersome procedure in which each enterprise has to submit a detailedfile, showing the elements of its cost increases, to the Ministry of Industry andCommerce. There are no explicit criteria relating the cost increase to the priceof the final product. A request must be submitted for each cost increaseregardless of the frequency with which it occurs. The delays in processing thesefiles h,ave been so protracted as to affect significantly the solvency of manyenterprises. The desired effects, however, e.g. low prices for wage goods, havenot always been achieved, since the discrepancy between supply and demand at thelow price has resulted in black market operations and high profit margins fortraders. The Government's policy of holding the prices of agricultural productsbelow world market prices to provide cheap inputs to manufacturing industry has notbeen successful either. Low prices for agricultural products, inter alia,

- 35 -

contributed to declining production. Therefore, the textile industry, had toincreasingly resort to higher priced imported cotton. Similarly, the concentratedmilk industry is facing a declining supply of milk since the farmers prefer to selltheir milk at a higher price to individual buyers or cheese manufacturers whoseprices are not controlled.

11. A salient feature of Malagasy manufacturing industry is its low level ofintegration with the agricultural sector. This is mainly due to productiondeficiencies in the agricultural sector but it also results, in part, from aninflexible import-substitution strategy which inadequately takes account ofdomestic input availabilities. Import dependence is especially high (above 50percent) in engineering industries such as metal products, transport and electricalequipment and substantial (above 40 percent) in chemicals and edible oils. Thereliance on imported inputs has resulted in pressures on the transportationalnetwork, problems of management of stocks and lengthening of the processing cycle,thus an increase in the working capital requirements of enterprises and acumbersome procedure of import allocations.

12. Related to this is the sectors' low level of capacity utilization. Thisarises mainly from: (i) a shortage of raw materials due to deficiencies inagricultural production, scarcity of foreign exchange earnings and transportationbottlenecks, the latter being particularly harmful for production planning sincetransport delays are unpredictable and frequently prolonged; (ii) the obsoletenature of machinery and equipment which results in considerable productioninterruptions in certain plants; and (iii) lack of adequately trained staff whichin turn stems from a tendency in Madagascar to think of technology transfer innarrow hardware terms.

13. The level of manufactured exports is very low. Only one industry(textiles) exports more than 10 percent of its output while the remainingindustries export very negligibly or not at all. A fundamental cause of poorexport performance is the choice of investment projects almost all of which, sofar, have been geared to supplying the domestic market. This policy has alsoresulted in uneconomically low plant size in a number of branches of manufacturingindustry.

14. It is very difficult, at present, to pass judgment on the productivity ofenterprises since in many of them production is deliberately slowed down toaccommodate the existing stock of inputs. This situation adversely affects theincentive systems introduced earlier, aiming at productivity increases throughpiece rate payments or special productivity bonuses. Production interruptions dueto external factors, beyond the management's and workers' control, not only causeuneasiness among workers who still claim their productivity bonuses but also imposean extra financial burden on the employer who has to consider wages as a fixed costsince layoff of workers is discouraged by Government policy.

- 36 -

15. Madagascar has considerable potential as a producer of manufactures withcomparatively abundant supplies of natural resources and readily trainablemanpower, both of which are at present far from fully exploited. In addition, thecountry has a well established industrial base and a capital stock which is, inmost sectors, heavily underutilized. On the other hand, Madagascar has a smalldomestic market, a distant location from the European and Middle Eastern marketsand lack of basic physical infrastructure such as roads, ports and railroads.

16. Madagascar's immediate need in the manufacturing sector is to achieve afuller utilization of existing capacity through a regular supply of inputs toindustries. There are no quick and simple solutions to this problem. Theelimination of major bottlenecks which involves agricultural reorganization andproductivity increases, the establishment of an improved transport network andincreased foreign exchange earnings can only be achieved gradually. Nevertheless,there are short and medium term measures, incentives and policy changes which couldbe beneficial to the operations and development of the manufacturing sector. As ashort term measure, transport priorities should be revised in terms of the economicand social costs of the delays involved in merchandise transportation. Financiallytroubled parastatals should be provided with sufficient funds to modernize theirequipment and continue their operations without constant recourse to budgetarysupport.

17. To develop the export potential of Malagasy manufacturing industry, itwould be necessary to create adequate financial incentives. The choice offinancial incentives should be made on the basis of budgetary cost, administrativefeasibility and acceptability by the domestic public. It is essential to ensurethat exporting is at least as profitable as production for the domestic market.Moreovesr exporters should be given access to imported inputs at world prices.3/Strict reliance on export quotas without any financial incentives should beabandoned since this results in increasing prices to domestic consumers tocompensate for losses incurred on exports.

18. Provision of the right financial incentives is a necessary but notsufficient condition for a successful export drive. It is also important for theState to publicize export promotion, promote the improvement and standardization ofproduct quality, and improve the provision of transport and marketing facilities.These objectives are already in the Ordinance for the promotion of exports, butneed to be made operational. It would seem desirable that closer links withforeign companies be established to improve the marketing potential of locallyproduced manufactured goods. This is also important for establishing a moreeconomic scale of operation since in many cases domestic demand alone would

3/ The Government has already made such an arrangement with a major textilefactory which will import tax-free denim to be processed exclusively for exports.

- 37 -

not justify the exploitation of certain natural resources. In spite of itsprevious cautious attitude towards foreign capital, government seems to haverealized the importance of foreign participation in financing development projects,transfer of technology and access to foreign markets. However, this "awareness"will have to be translated into concrete action through clearly defined industrialpolicies.

19. The existing price control system imposes an unnecessary and harmfulburden on the operations of industrial enterprises. Government must devise a newframework for its pricing policy which makes price adjustment more responsive tocost increases especially those cost increases outside the control of theenterprise.

20. The technical quality of industrial planning needs to be improved. Thisis partly a matter of broad sectoral allocation but mainly of a more judiciouschoice of projects within manufacturing sectors, including greater attention toeconomies of scale, availability of natural resources and export potential.Projects undertaken during recent years do not seem to have adequately reflectedthese concerns. A flour mill which is being constructed in Antsirabe is entirelybased on imported wheat; a new agricultural equipment factory at Toly isunderutilized due to lack of qualified manpower, a third major textile factoryunder construction is likely to compete for domestic cotton, a scarce naturalresource, and face an already saturated market unless export promotion measures areintroduced. On the other hand, the construction of a new cement factory seemsjustified given the shortage in the country. Of twenty eight industrial projectsfor which contracts were signed in early 1980, only seven were export oriented.Ten of these new projects were in the agro-industrial sector and required a morecareful analysis of natural resource availabilities. The construction of twocostly new tanneries, while existing plants have continuing difficulties inobtaining supplies of hides, needs reconsideration. The inappropriate selection ofprojects partly reflects a political aim to decentralize industrialization andachieve self-sufficiency but apparently with insufficient attention to the costinvolved.

- 38 -

Attachment 1

The Charter of Socialist Enterprises

1. The Charter of Socialist Enterprises, promulgated in May 1978, is aneffort to reorganize economic activities in accordance with the Charter ofSocialist Revolution, providing greater State control and participation of workersin the management of enterprises. All enterprises in which the State owns 51percent or more of the capital were supposed to become Socialist Enterprises withina year (mid-1979). But this deadline has been extended several times and currentlystands at end-1982.

2. All Socialist Enterprises are organized within a given economic sector(Decree no. 78-132 provides for 15 economic sectors) under the supervision of aPolicy Council (Conseil d'Orientation). The "Conseil d'Orientation" is composed ofthree government representatives, two members of the National Assembly, tworepresentatives of Managing Committees of the sector, and two workers' delegates.The Conseil d'Orientation is responsible not only for general sectoral policies inconformity with the Plan, but also for more specific decisions such as determiningthe targets and production programs for individual enterprises, changes in theirequity capital, their merger with other enterprises or liquidation and distributionof their profits. Socialist Enterprises are not subject to the audit of "Chambredes Comptes de la Cour Suprame" and will be controlled by other entities(preferably another socialist enterprise) on behalf of the "Conseild'Orientation". Pending the establishment of the "Conseil d'Orientation", a Decree(No. 79-011) enacted in 1979, provided as a transitory measure, that the powers ofthe "Conseil d'Orientation" would be exercised by the "Commission ad hoc du ConseilSupreme de la Revolution". Similarly, transitory provisions govern the banks.

3. The Socialist Enterprise is administered by a Managing Committee (Comitede Gestion) and a managing director. The "Comite de Gestion" includesrepresentatives of the State who in turn are selected by the "Conseild'Orientation", workers' delegates and eventually local community representatives,if the activities of the enterprise have significant social and economic impact onthe surrounding community. The non-delegable responsibilities of the "Comite deGestion" include among others, (i) proposals for changes in statutes, (ii)determining the level of wages and salaries and the amount of administrativeexpenditure, and (iii) approval of the investment and operating programs of theenterprise. The managing director is appointed by the Prime Minister on the basisof proposals by the "Comite de Gestion". His main responsibility is to execute thedecisions taken by the "Comite de Gestion".

4. The General Assembly of Workers (Assemblee Generale des Travailleurs)appoints the Workers' Committee (Comite des Travailleurs) of the Enterprise. TheWorkers' Committee in turn appoints the workers' representatives to the "Comite deGestion" and to the "Conseil d'Orientation".

- 39 -

5. A Socialist Enterprise can enter into partnership with a private investorwith the approval of the CSR and the Prime Minister. Likewise sale ofparticipations by the private shareholder is subject to the approval of the PrimeMinister. An agreement to be concluded by the State (represented by the Conseild'Orientation) and the private shareholder has to define the conditions of thelatter's participation. The delegation of the non-delegable powers accorded to the"Conseil d'Orientation" by the Charter to the managers of the enterprises - toensure its autonomy - needs to be approved by the legislature. Such approvalwould, however, depend on the strategic and economic importance of the project.

6. The Charter provides the general guidelines for the distribution ofprofits ("Resultats Distribuables"). These would usually have four claimants:(i) the entrepreneur, namely the shareholders; (ii) the workers; (iii) the State;and, (iv) the Nation. The workers' share would be used mainly to improve theworking conditions and establish various facilities for the employees. The Statewould claim its part through taxes while the contributions to the NationalInvestment Fund would constitute the Nation's share. However, detailed criteriafor profit distribution have not yet been provided for. Tax laws, as they willapply to Socialist Enterprises, are being reviewed to be put in line with theCharter guidelines.

7. The main problem encountered in the application of the Charter ofSocialist Enterprises has been the election of workers' representatives for the"Comite de Gestion". The workers' participation in the management of theenterprise which is of utmost importance in the Charter has been the delayingfactor in its application, mainly due to the excessive fragmentation of laborunions and the lack of readiness of the workers to assume important managerialresponsibility. An issue which is likely to arise with wider application of theCharter is the lack of autonomy in the management of these enterprises. Althoughthe Ordinance No. 78-006 (portant refonte de la Charte des Enterprises Socialistes)provides for managerial autonomy of Socialist Enterprises and non-intervention onthe part of the Government in their management, it is difficult to conceive howthis will be achieved since the Government - not the technocrats as in otherparastatals but politicians - is in full control of decision-making at every stage.

8. The Government has, however, adopted a pragmatic and cautious attitude inthe application of the Charter which consists of observing the operations of theexisting Socialist Enterprises and learning from their experience. The policymakers are quite willing to introduce new legislation or modifications of theexisting ones, if necessary.

- 40 -

LIST OF SOCIALIST ENTERPRISES

Transport Sector

Trans-SeptPort: of ToamasinaF IMA

Industrial Sector

SOCOBIS (Confectionery)KRAOMA (mining)SECREN (naval construction)FIT-[M (fabrication of jute bags)TOLY (agricultural machinery)Z-REN* (inorganic fertilizer)SU1ATEX* (textile)Cim(enterie d'Antirabe* (Cement)ZEMATAO* (organic fertilizer)MAMISOA* (soja refinery)

OthesrsSERD)I (Industrial Project Analysis)DINIKA (Public works' project analysis)RINDRA (Audit)

*under construction

- 41 -

MADAGASCAR

STATISTICAL TABLES

- 42 -

STATISTICAL TABLES

1]. Population and Employment

1.1 Population, 1966-801.2 Population by sex and age group, 1975 and 19801.3 Economically active population by sex and age group, 1975 and 19791.4 Economically active population by sector, 19791.5 Registration for employment by education level and length of

unemployment, 1978 and 19791.6 Registered unemployment by province, 1974-1979

II. National Accounts

2.1 Gross domestic product by industrial origin at current prices2.2 Gross domestic product by industrial origin at 1970 prices2.3 Gross domestic product by expenditure at current prices2.4 Gross domestic product by expenditure at 1970 prices2.5 Gross domestic product: Annual growth rates2.6 Gross domestic capital formation at current prices, 19792.7 Investment and savings2.8 Sectoral price deflators

III. Balance of Payments

3.1 Balance of payments - Summary, 1974-19793.2 Balance of payments, 1974-19793.3 Merchandise exports, f.o.b., 1972-19793.4 Major merchandise exports, 1972-19793.5 Exports of petroleum products, 1972-19793.6 Exports of petroleum products, 1972-19773.7 Merchandise imports, c.i.f., 1972-19793.8 Imports of food, beverages and related products, 1972-19793.9 Imports of mineral fuels, lubricants, and related

materials, 1972-19793.10 Imports of capital goods, 1972-19793.11 External trade indices3.12 Direction of trade: Exports, f.o.b., 1972-19793.13 Direction of trade: Imports, c.i.f., 1972-1979

IV. External Debt

4.1 External public debt outstanding including undisbursedas of December 31, 1980

4.2 Service payments, commitments, disbursements and outstandingamounts of external public debt

- 43 -

V. Public Finance

5.1 Overall government operations, 1975-19795.2 Tax revenues, 1975-19795.3 Recurrent budget expenditures5.4 Budgetary capital expenditures, 1975-19805.5 Treasury bills, 1977-19805.6 Sharing of dues, fees and taxes between decentralised

collectivities

VI. Monetary Statistics

6.1 Monetary survey, 1975-19806.2 Distribution of credit by economic activity6.3 Interest rate structure6.4 International liquidity, 1975-1980

VII. Agricultural Statistics

7.1 Crop production, 1972-19797.2 Producer prices of selected agricultural products, 1972-19797.3 Salt water fishing: Marketed catch, 1972-19787.4 Imports of inputs for agriculture, 1972-1979 (c.i.f.)7.5 Imports of inputs for agriculture, 1972-1979 (in metric tons)

VIII. Other Sectors

a. Industry

8.1 Industrial production, 1972-19798.2 Mineral production, 1972-19798.3 Electricity production and consumption, 1972-19798.4 Industrial production indices, 1972-1979

b. Transport

8.5 Selected indicators of rail transport, 1972-19798.6 Air transport, 1972-19798.7 Maritime freight traffic by port, 1972-19798.8 Motor fuel consumption, 1972-1979

c. Social Services

8.9 Educational indicators8.10 Public health care centers and physicians, 1978

IX. Prices

9.1 Cost of living indices in Antananarivo, 1972-19809.2 Wholesale prices for selected commodities in Antananarivo, 1972-1979

Table 1.1: POPULATION 1966-80

Total Population Urban Population 2/Population totale Population urbaine 2/

Population Annual Growth Rate Population Annual Growth RRteTaux annuel de croissance Taux annuel de croissance

('000) (%) ('000) (%)

1966 6200 2.20 820 5.51970 6785 1006 4.51971 6940 10501972 7100 11081973 7264 11451974 7432 11901975 7603 2.30 1240 4.01976 7815 12901977 8030 1341 4.01978 8250 14001979 8480 14701980 8714 2.75 1544 5.0

1/ Mid year/Milieu d'annge

2/ Towns over 5,000 inhabitants/Villes de 5.000,habitants

Sources: 1966 Population Census/Recensement general de la population, 19661975 Population Census/Recensement gengral de la population, 1975INSRE (Institut National de la Statistique et de la Recherche Economique)

Table 1.2: POPULATION BY SEX AND AGE GROUP, 1975 AND 1980

POPULATION PAR SEXE ET GROUPE D'AGE, 1975 ET 1980

(in thousands/effectifs en milliers)

1975 1980 I/

Male Female Total Male Female Total

Age Group Masculin F6minin Total Masculin Ffminin Total Groupe d'.ge

Under 15 1715 1661 3376 1998 1964 3962 Au-dessous de 15

15-19 400 414 814 450 424 874 15-19

20-29 546 592 1138 688 719 1407 20-29

30-39 353 394 747 385 439 824 30-39

40-49 311 315 626 322 346 668 40-49

50-59 246 218 464 254 248 502 50-59

60 and over 234 204 438 251 226 477 60 et plus

TOTAL 3805 3798 7603 4348 4366 8714 TOTAL >

1/ INSRE Estimates/Estimations de 1'INSRE

Sources: 1975 Population Census/Recensement general de la population, 1975

INSRE

Table 1.3: ECONOMICALLY ACTIVE POPULATION BY SEX AND AGE GROUP, 1975 AND 1979POPULATICN ACTIVE PAR SE'RE ET PAR AGE, 1975 ET 1979

1975 1979 l/Participation Rates Participation Rates

Active Population Taux d'activit6 Active Population Taux d'activitePopulation active (in % of age group) Population active (in % of age group)

('000) (en % du groupe d'age) ('000) (en % du groupe d'Age)Male Female Male Female Male Female Male Female

Age Group Masculin Feminin Total Masculin Feminin Total Masculin Feminin Total Masculin Feminin Total Groupe d'age

10-14 203 176 379 6b4 40 42 127 110 237 23 21 22 10-1415-19 305 259 564 76 60 68 354 272 626 76 59 68 15-1920-24 294 285 579 95 82 88 356 287 642 91 71 80 20-2425-44 751 655 1406 99 78 88 869 744 1615 99 78 88 25-4445-54 277 215 492 99 81 90 288 263 551 99 81 89 45-5455-64 178 119 297 94 75 85 202 189 390 94 75 84 55-6465 and over 112 51 163 82 45 65 124 82 206 82 45 62 65 et plus

40

TOTAL 2120 1760 3880 2320 1947 4267 TOTAL

1/ Provisional estimatesa/Evaluation provisoire

Sources: 1975 Population Census and ILO estimates for 1975 participation rates/Receasement gene'ral de la population, 1975 et estimation du BIT pour taux

d'activites en 1975.Ministry of Planning, Human Resources Department/Ministtre du Plan, Service des Ressources Humaines.

Table 1.4: ECONOMICALLY ACTIVE POPULATION BY SECTOR, 1979 -/POPULATION ACTIVE PAR SECTEUR, 1979 1/

(in thousands/en milliers)

Urban Area Rural AreaSector Milieu urbain Milieu rural Total Secteur

Agriculture 100.5 3691.5 3792.0 AgricultureIndustry 59.7 59.7 IndustrieConstruction 17.3 13.5 30.8 ConstructionHandicrafts 23.5 - 23.5 ArtisanalCommerce, Banking Commerce, Banqueand Insurance 46.0 48.0 94.0 et Assurance

Transport, Telecommunication 28.8 - 28.8 Transport, TelecommunicationHousehold Servants 35.5 - 35.5 DomesticitgUnallocated 25.0 46.9 71.9 Autres

Administration 108.8 22.2 131.0 Amtinistration

TOTAL 445.1 3822.1 4267.2 TOTAL

1/ Preliminary estimates/Evaluation provisoire

Source: Ministry of Planning, Human Resources Department/Ministare du Plan, Service des Ressources Humaines

Table 1.5: REGISTRATION FOR EMPLOYMENT BY EDUCATION LEVEL AND LENGTH OF UNEMPLOYMENT, 1978 AND 1979REPARTITION DES DEMANDEURS D'EMPLOI SELON LES DIPLOMES OBTENUS ET SUIVANT LA DUREE DU CHOMAGE.1978 ET -1979

1978 1979 -/

Male Female Male FemaleHommes Femi.es Total Hommes Femmes Total

I. Education Level I. .Dipl8mes obtenusA 6583 3253 9836 7204 4640 11844 AB 2591 1415 4006 2077 1307 3384 BC 428 231 659 479 289 768 CD 111 57 168 80 47 127 IDE 104 50 154 84 56 140 EF 19163 6094 25257 19449 8568 28017 F

Total 28980 11100 40080 29373 14907 44280 Total

II. Length of Unemployment II. Duree du ch6mage 0Less than 1 month 19710 7885 27595 25234 12549 37783 Moifs d'l mois1 to 6 months 4610 1486 6096 2188 1256 3444 1 a 6 mois6 to 12 months 1878 700 2578 728 352 1080 6 A 12 moisMore than 1 year 2782 _1029 3811 1223 750 1973 'Plus d'l an

Total 28980 11100 40080 29373 14907 44280 Total

1/ Preliminary estimates/Evaluation provisoire

A = Primary school Diploma/Dipl6mes de fin d'etudes de l'education de base et assimilesB = Junior High/Dipl6mes de fin d'etudes de la formation secondaire de base et assimilesC = High School Degree/Baccalaureat de 1'enseignement supgrieur et assimilesD = College degree/Dipldmes du ler cycle de l'enseignement superieur et assimilesE = Bachelor or Master degree/Dipl6mes du 2eme cycle de 1'enseignement superieur (license et mattrise)F = No degree/Sans diplome

Source: Ministry of Employment and Civil Service/Minist6re de la Fonction Publique du Travail et des Lois Sociales

- 49 -

Table 1.6: REGISTERED UNEMPLOYMENT BY PROVINCE, 1974-1979CHOMAGE DECLARE PAR PROVINCE, 1974-1979

1974 1975 1976 1977 1978 1979

Antananarivo 6835 8453 20633 30601 18690 21764

Pianarantsoa 785 864 1814 4439 4093 - 4260

Toamasina 1104 1404 1508 3514 4428 5085

Mahajanga 3127 1703 1911 6206 3090 2833

Toliara 1135 433 1447 3178 3507 3191

Antseranana 429 441 871 1800 1776 2810

13415 13298 28184 46580 35584 39943

Source: Ministry of Employment/Minist4re de la Fonction Publique, duTravail et des Lois Sociales

TABiLE 2.1GROS,S DOMIESTIC PRODUCT BY INDUSTRIAL ORIGIN AiT CURRENT PRICES

FMUG DILL-IONS

1 972 1.9 73 1974 1 975 1 9 7 1.9 77 1970 1 9 79 1.98 0

A GR IC UL.LTUR E FO0R E STFRY & FlI5F SI NG 8 2.4 9 6 2 1 54.0 1 62 4 16 9.2 18.5.7 1.87.6 I2125 2 49:.1 SECTEUR PRIMAIRE

.,N D LI ST R Y 52.3 60.2 66.7 70.6 7 6 .2 09.9 93.6 1 1 4.5 1 24.3 SECTEUJR SECONDAIRE

SERVICES I/ 03.6 80).8 97.1. 104.9 110.3 116.7 1.22 .1 163.5 1 97. 7 SECTEUR TERTIAIR.E if

PUBLIC A)DMINISTRATlION 40 .9 4 0. 41 .0 42.4 40.9 52~. 5 59.6 72 .6 83.6 SALAIRES VERSES PAR

LES ADMITNISTRATIONSliMPORT DULTIES 13.9 1 1. 8 1 3.7. 14.9 1 6 . 5 23.3 23.7 32.0 35 .1. RISE AE

L'IMPWORTATION

GROSS DiOMESTIC PRODUICTAT MlARKET P'RICES 2.73.1 297 .6 372.0G 395. 2 42-1.1 468.1 4 86. 6 595.1 689.0 PRODUIT INTERIEUR

~ ~ ~ ~ ~ ------- ~~~~~~~~~~~~~~BRUT, AUIX PRIX DE

MARCHE

NOTE: PROVISIONAL- F'ROM 1974 TO 1970 PROVISOTRE 1974-1978ESTIMIATES) FOR 1979 AND 1980/ESTIMATIONS POUR 1979 ET 19800

1/INCLUDE'S DOMlESTIC SE-RVICES OF: HOUSEHOLDS IY COMPRIS SALAIRES GENS DE MIAISON

SOOR(A... FL-ANNINGO DI1RECT URAT F / DIRECTION DU FLAN

11A1 I(:] F: /AG2/

TABLE 2.2GROSS DOMESTIC FRODUCT BY INDUSTRIAL ORIGIN AT 1970 PRICES

( FMG BILLIONS )

1972 1973 1974 1975 1976 1977 1978 1979 1980

AGRICULTURE,FORESTRY & FISHING 73.7 74.5 81.3 80.9 73.9 76.3 71.3 76.4 78.3 SECTEUR PRIMAIRE

INDUSTRY 49.2 48.2 51.4 51.4 46.7 48.1 50.1 56.5 55.0 SECTEUR SECONDAIRE

SERVICES 1/ 81.8 80.0 80.7 83.9 85.1 85.6 80.7 90.1 90.7 SECTEUR TERTIAIRE 1/

PUBLIC ADMINISTRATION 38.2 36.3 32.6 32.2 35.3 35.5 37.3 40.0 41.7 SALAIRES VERSES PARLES ADMINISTRATIONS

IMPORT DUTIES 13.0 10.2 8.2 9.0 8.5 9.9 9.3 10.1 9.6 DROITS ET TAXES A

L' IMPORTATION

GROSS DOMESTIC PRODUCTAT MARKET FRICES 255.9 249.2 254.2 257.4 249.5 255.4 248.7 273.1 275.3 PRODUIT INTERIEUR

BRUT AUX PRIX DEMARCHE

…__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _NOTE: PROVISIONAL FROM 1974 TO 1978 / PROVISOIRE 1974-1978

FRELIMINARY ESTIMATES FOR 1979 AND 1980/ESTIMATIONS PRELIMINAIRES POUR 1979 ET 1980 H1/ INCLUDES DOMESTIC SERVICES OF HOUSEHOLDS/y COMPRIS SALAIRES GENS DE MAISON

SOURCE: PLANNING DIRECTORATE/DIRECTION DU PLAN

DATA FILE: D/MAG/25/D.

TABLE 2.3GROSS DOMESTIC F'RODIUCT BY EXF'ENDIITURE AT CURRENT FPRICES

FMG BILLIONS

1972 1973 1974 1975 1976 1977 1978 1979 1980

'TOTAL CONSUMFPTION 244 .3 2 66. 8 33 6 .6 36 1 5 37 3 .0 4 1 5.9 435.6 535.2 63 1.1 CONSOMMATION TOTALE

PR I VA TE 1 91 .7 215.4 277.7 301.1 306,4 3 43, 1 354.0 4 32. 2 513. 3 SECTEUR PRIVE

GOVERNMENT 5 2. 6 51 .4 58 .9 60 .4 66.6 7 2 .8 81I. 6 10 3 .0 1 1 7.8 ADMINISTRATION

GROSS 1DOM. CAPITAL FORMATION 3 7 .9 4 2. 6 5 0 .8 50 .6 53. 9 60 .2 68 .4 131 .7 143.0 FORMATION BRUTE DE

GROSS FIXEDI CAP. FORMAT. 36. 0 40.1 4 4 .0 4 8 .4 52.1 5 8 .0 66 .4 125.7 143.0 FORMATION DE CAPITAL FIXE

INCREASE IN STOCKS 1.9 2 .5 6.8B 2.. 2 1.8 2 .2 2 .0 6.0 0.0 VARIATION DlU STOCK

EXP'ORTS OF GOODIS & NFS 1/ 4 6. 3 5 0 .4 68.8 74.5 75.9 9 7 .6 1 02 .6 10 2 .6 1 04 .7 EXPORTATIONS DE BIENSET SNF

IMP'ORTS OF GOODS & NFS I/ -55,4 -6 2 .2 -83.4 -91.4 -81.7 -105.6 --120.0 -174.4 -189.0 iMPORTATIONS DE BIENSET SNF

G D P' AT MARKET P'RICES 273.1 297.6 372.8 395.2 421.1 468.1 486.6 595.1 689.8 PIB AUX PRIX DlU MARCHE'

NET FACTOR INC. FROM ABROAD -.8. 1 -6.5 -5.1 -5.9 -5.5 --. 7 -7.9 -9.6 -11.0 REVENUS NETS DES FACTEURS

VERS L'EXTERIEUR

O N P AT MARKET PRICES 265.0 291,1 367.7 389.3 415.6 460.4 478.7 585.5 678.8 PNB AUX PRIX DU MARCHE

NOTE: P'ROVISIONAL FROM 1974 TO 1978/ PROVISOIRE DE 1974 A 1978

PRELIMINARY ESTIMATES FOR 1979 AND 1980 I ESTIMATIONS PRELIMINAIRES POUR 1979 ET 1980I/ BASED ON CUSTOMS DIATA EXCEP'T FOR 1979 WHEN ADJUSTMENT IN

NATI'ONAL ACCOUINTS WAS MADE FOR IMP'ORTS OF AIRCRAFT AND I,f BASEES SUR LES DONNEES DES DOUANES SAUF POUR 1979 OU UN AJUSTEMENT

SHITPS. EXPORTS OF' GOODS AND NON-FACTOR SERVICES DIlFFER BY A ETE FAIT DANS LA CONPTABILITE NATIONALE POUR L'TMPORTATION D'UN

ABOUT 4 PERCENT FROM THOSE SHOWN IN THE BALANCE OP PAYMENTS AVION ET DE BATEAUX. LES DIFFERENCES ENTRE LES STATISTIQUES DE LA

WHIICH PROBABLY ARE MORE RECENT.. DIFFERENCES IN IMP'ORTS OF COMPTABILITE NATIONALE ET CELLES DE LA BALANCE DES PAIENENTS, SONT

GOODS ANED NON-FACTOR SERVICES ARE EVE'N HIGHER (ABOLJT 10 P'ERCE NT) DE L'ORDRE DE 4 POUR CENT POUR LES EXPORTATIONS OR BIENS ET

PARTICULARLY FOR 1979 FOR WHICH A DIFFERENT ADiJUSTMENT WAS SERVICES NON-FACTERUS (S.N.F.) ET OR 10 POUR CENT POUR LES

MADE BY THE I M F IN IMPORTS OF GOODS1~. I1PORTATIONS DE BIENS ET S.N.F., EN PARTICULIER LA DIFFERENCE EST

PLUJS GRANDE EN 1979 POUR LEQUEL LE FMI A FAIT UN AUTRE AJUSTENENTSOURCE' 1PLANNING DIRECTORATE /DIRECTION DU PLAN POUR LES IMPORTATIONS DE MARCHIANDISES.

DATA FILE: D/MAG/-!S/ll.

TABLE 2.4GROSS DOMESTIC PRODUCT BY EXPENDITURE AT 1970 PRICES

( FMG BILLIONS )

1972 1973 1974 1975 1976 1977 1978 1979 1980------------------------------------------------------------------- __--------__-----------------------------------

TOTAL CONSUMPTION 227,7 218.5 212.5 211.8 209.7 214.3 208.8 226.8 230.4 CONSGizJ.ION TOTALE

PRIVATE 178.3 172.9 168.8 167.2 162.9 167.2 159.0 169.7 170.8 SECTEUR PRIVE

GOVERNMENT 49.4 45.6 43.7 44.6 46.8 47.1 49.8 57.1 59,6 ADMINISTRATION

GROSS DOMESTIC CAPITAL FORMAT 35.4 36.9 39.2 37.6 31.5 31.1 27.9 45.9 43.6 FORMATION BRUTE DE

------------- -------- -------- -------- CAPITALGROSS FIXED CAP. FORMATION 33.6 34.8 35.1 36.0 30.5 30.0 26.9 45.9 43.6 FORMATION DE CAPITAL .:.

INCREASE IN STOCKS 1.8 2.1 4.1 1.6 1.0 1.1 1.0 0.0 0.0 VARIATION DU STOCK

EXPORTS OF GOODS & NFS 44.9 46.9 49.7 58.4 44.8 50.3 54.1 55.3 52.7 EXPORTATIONS DE BIENSET SNF

IMPORTS OF GOODS & NFS -52.1 -53.1 -47.2 -50.4 -36.5 -40.3 -42.1 -54.9 -51.4 Im ORT'TIONS DE BIENSET SNF

G D P AT MARKET PRICES 255.9 249.2 254.2 257.4 249.5 255.4 248.7 273.1 275.3 PIB AUX PRIX DU MARCHL

NET FACTOR INC. FROM ABROAD 1/ -7.6 -5.5 -2.9 -3.3 -2.5 -2.9 -2.8 -3.0 -3.0 REVENUS NETS DES FACT E6.

VERS L'EXTERIEURG N P AT MARKET PRICES 248.3 243.7 251.3 254.1 247.0 252.5 245.9 270.1 272.3 PNB AUX PRIX DU MARCHE

- .- - - - - - - - - - - - - - - - - - - - - - - - _- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _ _- - - - - - - - - - - - - - - - _ _- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

NOTE: PROVISIONAL FROM 1974 TO 1978/ PROVISOIRE DE 1974 A 1978PRELIMINARY ESTIMATES FOR 1979 AND 1980 /ESTIMATIONS POUR 1979 ET 1980

1/ DEFLATED BY IMPORT PRICE INDEX/ AJUSTE PAR L'INDICE DES PRIX A L'IMPORTATION

SOURCE: PLANNING DIRECTORATE/DIRECTION DU PLAN

DATA FILE: D/MAG/2S/D.

TABLE 2.5GROSS DOMESTIC PRODUCT: ANNUAL GROWTH RATES

PERCENT

1972 1973 1974 1975 1976 1977 1978 1979 1980

PAR GENRE D'ACTIVITE

BY INDUSTRIAL ORIGIN ECONOMIQUEAGRICULTURE 2.1 1.1 9.1 -0.5 -8.7 3.2 -6.6 7.2 2.5 SECTEUR PRIMAIREINDiUSTRY 1.0 -2.0 6.6 0.0 -9.1 3.0 4.2 12.8 -2.7 SECTEUR SECONDAIRESERVICES -3.7 -2.2 0.9 4.0 1.4 0.6 -5.7 11.6 0.7 SECTEUR TERTIAIREPUBLIC ADMINISTRATION 1.6 -5.0 -10.2 -1.2 9.6 0.6 5.1 7.2 4.3 SALAIRES VERSES PAR ADMIN.IMPORT DUTIES -17.7 -21.5 -19.6 9.8 -5.6 16.5 -6.1 8.6 -5.0 DROITS ET TAXES A

L'IMPORTATIONG D P AT MARKET PRICES -1.3 -2.6 2.0 1.3 -3.1 2.4 -2.6 9.8 0.8 PIB AUX PRIX DU MARCHE

BY EXPENDITURE EMPLOIS DU PIBTOTAL CONSUMPTION -0.0 -4.0 -2.7 -0.3 -1.0 2.2 -2.6 8.6 1.6 CONSOMMATION TOTALEPRIVATE CONSUMPTION 2.7 -3.0 -2.4 -0.9 -2.6 2.6 -4.9 6.7 0.6 CONSOMMATION PRIVEEGOV'T CONSUMPTION -8.9 -7.7 -4.2 2.1 4.9 0.6 5.7 14.7 4.4 CONS.DE L'ADMINISTRATIONGROSS DOM, CAP. FORM. -22.9 4.2 6.2 -4.1 -16.2 -1.3 -10.3 64.5 -5.0 FORMATION BRUTE DU CAP.EXPORTS OF GOODS & NFS -1.3 4.5 6.0 17.5 -23.3 12.3 7.6 2.2 -4.7 EXPORT.DES BIENS & SNFIMPORTS OF GOODS & NFS -13.2 1.9 -11.1 6.8 -27.6 10.4 4.5 30.4 -6.4 IMPORT.DES BIENS & SNF

G N P AT MARKET PRICES -0.2 -1.9 3.1 1.1 -2.8 2.2 -2.6 9.8 0.8 PNB AUX PRIX DU MARCHE

4.

SOURCE: TABLES 2S/02 AND 2S/04

DATA FILE: D/MAG/25/D

Table 2.6 CROSS DOMESTIC CAPITAL FORMATION AT CURRENT PRICES, 1979INVESTISSJEMtNTS AUX PRIX COURANTS, 1979

(FXC billion/en milliards de FMG)

Government Enterprises Households TotalAdminis- Entreprises MKnagestration _ _

_n

Construction and public works 36.5 14.8 . 11.5 62.8 Batiments et travaux publics

Machinery and equipment 12.3 17.6 - 29.9 Machines et equipements

Transport equipment 5.5 23.5 29.0 Mat6riel de transport

Studies 4.0 - - 4.0 Etudes

Gross domestic fixed capitalformation 58.3 55.9 11.5 125.7 Formation brute du capital fixe

Change in stocks - - 6.0 Variation de stocks,

Gross domestic capital formation - - - 131.7 Formation brute du papital

Source: Planning Directorate/Direction du Plan.

Table 2.7INVESTMENT AND SAVINGS

1972 1973 1974 1975 1976 1977 1978 1979 1980

IN BILLIONS OF FMG )

GROSS DOMESTIC CAP. FORMATION 37.9 42.6 50.8 50.6 53.9 60.2 68.4 131.7 143.0 FORMATION BRUTE DUCAPITAL

EXPORTS OF GOODS & NFS 46.3 50.4 68.8 74.5 75.9 97.6 102.6 102.6 104.7 EXPORTATIONS DE BIENS

ET SNF

IMPORTS OF B0OODS & NFS -55.4 -62.2 -83.4 -91.4 -81.7 -105.6 -120.0 -174.4 -19.0 IMPORTATIONS DE BIENS

ET SNF

RESOURCE BALANCE -9.1 -11.8 -14.6 -16.9 -5.8 -8.0 -17.4 -71.8 -84.3 BALANCE DES RESSOURCES

DOMESTIC SAVINGS 28.8 30.8 36.2 33.7 48.1 52.2 51.0 59.9 58.7 EPARGNE INTERIEURE

NET FACT. INC. FROM ABROAD 1/ -8.1 -6.5 -5.1 -5.9 -5.5 -7.7 -7.9 -9.6 -11.0 REVENUS NETS DES PACTEURSVERS L'EXTERIEUR

NET CURRENT TRANSFERS 1/ 9.2 7.4 9.2 10.5 12.0 13.0 13.2 15.0 15.4 TRANSFERS COURANTS NETSVERS L'EXTERIEUR

NATIONAL SAVINGS 29.9 31.7 40.3 38.3 54.6 57.5 56.3 65.3 63.1 EPARGNE NATIONALE

(PER CENT) OS

MEMO ITEMS POUR MEMOIRE

FIXED INVESTMENT AS X OF GDP 13.2 13.5 11.8 12.2 12.4 12.4 13.6 21.1 20.7 FBCF EN % DU PIB

TOTAL INVESTMENT AS % OF GDP 13.9 14.3 13.6 12.8 12.8 12.9 14.1 22.1 20.7 INVESTISSEBNT TOTAL EN% DlU PIB

DOMESTIC SAVINGS AS % OF GDP 10.5 10.3 9.7 8.5 11.4 11.2 10.5 10.1 8.5 EPARGNE INTERIEUR EN

% DU PIB

RESOURCE GAP AS Z OF GDF -3.3 -4.0 -3.9 -4.3 -1.4 -1.7 -3.6 -12.1 --12.2 BALANCE DES RESSOURCES

EN X DU PIB

RESOURCE GAP AS % TOT.INVEST. -24.0 -27.7 -28.7 -33.4 -10.8 -13.3 -25.4 -54.5 -59.0 BALANCE DES RESSOURCES

EN % DES INVESTISSE-MENTS TOTAUX

l/ DATA DIFFER FROM THOSE OF THE BALANCE OF PAYMENTS/DONNEES SONT DIFFERENTES DE CELLES DE LA

BALANCE DES PAIEMENTS

SOURCE: TABLE 2S/03DATA FILE D/MAG/25/D

Table 2.8SECTORAL PRICE DEFLAIOR!.

( 1970 = 100

1972 1973 1974 1975 1976 1977 1978 1979 1980

G D FP BY INDUSTRIAL ORIGIN PIB PAR GENRE D'ACTIVITE

ECONOMIQUE

AGRICULTURE 111,8 129.1 189.4 200.7 229.0 243.4 263.1 278,1 318.1 SECTEUR PRIMAIRE

INDUSTRY 106.3 124.9 129.8 137.4 163.2 186.9 186.8 202e7 226.0 SECTEUR SECONDAIRE

SERVICES 102.2 111.0 120.3 125.0 129.6 136,3 151,3 181.5 218.0 SECTEUR TERTIAIRE

PUBLIC ADMINISTRATION 107.1 111.8 128.2 131.7 138.5 147.9 159,8 181,5 200.5 SALAIRES VERSES PAR LES

ADMINISTRATIONS

G D P BY EXFENDITURE EMPLOIS DU PIB

TOTAL. COMSUMPTION 107.3 122.1 158.4 170.7 177.9 194.1 208.6 236,0 273.9 CONSOMKATION TOTALE

PRIVATE CONSUMPTION 107.5 124,6 164.5 180.1 188.1 205.2 222.6 254.7 300.5 CONSOMMATION PRIVEE

GOV'T CONSUMPTION 106.5 112,7 134.8 135.4 142.3 154.6 163.9 180.4 197.7 CONS.DE L'ADMINISTRATION

GROSS DOM. CAP. FORMATION 107.1 115.4 129.6 134.6 171.1 193.6 245.2 286.9 328.0 FORMATION BRUTE DU CAPITAL

EXPORTS OF GOODS,NFS 103.1 107.5 138.4 127.6 169.4 194.0 189.6 185.5 198.7 EXPORTATIONS DES BIENS & SW

IMPORTS OF GOODS,NFS 106.3 117.1 176.7 181.3 223.8 262.0 285,0 317.7 367.7 IMPORTATIONS DES BIENS& SNF

G D P IMF'LICIT DEFLATOR 106.7 119.4 146.7 153.5 168.8 183.3 195.7 217.9 250.6 PIB INDICE D'AJUSTEMENT

SOURCE. PLANNING DIRECTORATE AND MISSION ESTIMATES/DIRECTION DU PLAN ET ESTIMATIONS DE LA MISSION

DATA FILE: D/MAG/25/D

Table 3.1: BALANCE OF PAYMENTS - SUMMARY, 1974-1979BALANCE DES PAIEMENTS - RECAPITULATION, 1974-1979

(US$ million; en millions de $E.U)

1974 1975 1976 1977 1978 1979 198 (

Trade balance 8.7 -12.1 27.2 39.1 1.3 -262.3 -302.4 Balance commerciale

Exports of goods, f.o.b. 247.4 319.6 288.7 350.9 405.5 411.8 420.7 Exportations de biens, f.o.b.Imports of goods, f.o.b. -238.7 -331.7 -261.5 -311.8 -404.2 -674,1 -723.1 Importations de biens, f.o.b,

Services (net) -80.7 -109.6 -107.1 -109.5 -144.4 -248.2 -286.8 Services (net)

Freight and insurance -42.0 -60.2 -46.4 -68.0 -81.1 -137.7 -144.3 Fret et assurancesTransportation - 7.9 -7.9 -13.8 -6.9 -11.5 -12.2 -16.6 Autres transportsTravel -13.7 -15.9 -15.5 -15.9 -19.9 -23.5 -27.9 VoyagesInvestment income -4.6 -5.1 -5.0 -5.3 -8.9 -22.6 -39.8 Revenus des investissementsOther services -12.5 -20.5 -26.4 -13.4 -23.0 -52.2 -58.2 Autres services

Current transfers (net) 40.3 59.7 52.3 52.1 60.7 70.0 72.9 Transferts courants (net)

Private 7.5 -3.3 3.3 0.8 8.4 7.0 7.1 PrivEsPublic 32.8 63.0 49.0 51.3 52.3 63.0 65.8 Publics

Current account balance -31.7 -62.0 -27.6 -18.3 -82.4 -440.5 -516.3 Balance de biens, services, ettransferts courants I

Capital movements (net) -4.6 28.4 20.9 30.5 75.3 229.9 288.2 Mouvements de capitaux (get)

Direct investment 13.7 -1.4 -2.5 -4.1 -6.2 -6.6 -6.6 Investissements directsGovernment long term loans 14.1 25.2 17.1 18.3 22.6 145.3 199.2 Dettes a long-terme de l'EtatOther public debts - 5.6 2.9 -0.4 -0.4 -0.5 - Autres dettes publiquesState and private enterprises -2.9 0.9 -0.8 11.0 35.4 107.2 70.5 Entreprises publiques et priveesTrust fund - - - - 13.7 - 18.9 Fonds fiduciaireOther -29.5 -1.9 4.2 5.7 10.2 -15.5 6.2 Autres

SDR allocation - - - - - 4.7 4.7 Allocation de DTS

Reserve changes (- - increase) 36.3 33.6 6.7 -12.2 7.1 205.9 223.4 Changizaments des rgserves (- =augmentation)

Memo items Pour mEmoire

Exchange rates, FMG per US$ 240.50 224.32 238.98 245.67 225.64 212.72 211.30 Taux de change, FMG par $E.U.

1/ Provisional/Provisoire2/ Includes short-term capital and errors and omissions/Y cdmpris capitaux a court terme et erreurs et omissions.

Sources: Central Bank of Madagascar and IMF estimates/Banque centrale de Madagascar et estimations du FMI.

Table 3.2: BALANCE OF PAYMENTS, 1974-1979BALANCE DF3 FAEMENTS,S 1974-1979(FMG billion/en milliards de TMG)

Trade 1974 1975 1976 1977 1978' 1979 19801 CTraof fobde.5 6. 8. Commerce

Exports of goods, f.o.b. 59.5 68,5 69.0 86.2 91.5 87.6 88.9 Exportations de marchandises, f.o.b.Imports of goods, f.o.b. -57.4 -71.1 -62.5 -76.6 -91.2 -143.4 -152.8 Importations de marchandises, f.o.b.

Trade balance 2.1 -2.6 6.5 9.6 0.3 -55.8 -63.9 Balance commercialeServices Services

Freight and Insurance (net) -10.1 -12.9 -11,1 -16.7 -18.3 -29.3 -30.5 Fret et assurances (net)

Receipts (-) (0.8) (0.7) (0.2) (0.3) (0.2) (0.9) RecettesPayments (-10.1) (-13.7) (-11.8) (-16.9) (-18.6) (-29.5) (-31.4) Paiements

Transportation (net) -1.9 -1.7 -3.3 -1.7 -2.6) -2.6 -3.5 Autres transports (net)Receipts (5.0) (4.9) (5.1) (3.2) (2.7) (4.0) (4.0) RecettesPayments (-6.9) (-6.6) (-8.4) (-4.9) (-5.3) (-6.6) (-7.5) Paiements

Travel (net) -3.3 -3.4 -3.7 -3.9 -4.5 -5.0 -5.9 Voyages (net)Receipts (0.5) (0.8) (0.8) (0.6) (0.6) (1.1) (1.1) RecettesPayments (-3.8) (-4.2) (-4.5) (-4.5) (-5.1) (-6.1) (-7.0) Paiements

Investment income (net) -1.1 -1.1 -1.2 -1.3 -2.0 -4.8 -8.4 Revenu des investissements (net)

Receipts (1.7) (1.1) (0.7) (0.5) (1.0) (0.5) (0.5) RecettesPayments (-2.8) (-2.2) (-1.9) (-1.8) (-3.0) (-5.3) (-8.9) Paiements

Other services (net) -3.0 -4.4 -6.3 -3.3 -5.2 -11.1 -12.3 Autres services (net)Receipts (5.5) (4.5) (3.1) (4.1) (4,2) (5.7) (5.7) RecettesPayments (-8.5) (-8.9) (-9.4) (-7.4) (-9.4) (-16.8) (-18.0) Paiements

Services (net) -19.4 -23.5 -25.6 -26.9 -32.6 -52,8 -60.6 Services (net)Current transfers Transfe ts Geurents

Private transfers (net) 1.8 -0.7 0.8 0.2 1.9 1.5 1.5 Transferts privgs (net)Receipts (6.5) (6.7) (8.1) (6.8) (811) (7.8) . RecettesPayments (-4.7) (-7.4) (-7.3) (-6.6) (-6.2) (-6.3) ,- Paiements

Public transfers (net) 7.9 13.5 11.7 12.6 11.8 13,4 13.9 Transferts publicsReceipts (8.8) (14.4) (12.6) (13.0) (13.2) (14.0) Recettes

Payments (-0.9) (-0.9) (-0.9) (-0.4) (-1.4) (-0.6) PaiementsCurrent transfers (net) 9.7 12.8 12.5 12.8 13.7 14,9 15.4 Transferts courants (net)

Current account balance -7.6 -13.3 -6.6 -4.5 -18.6 -93.7 -109.1 Balance de biens, services et transferts courants

Capital movements tMouvements de capitauxLong-term capital (net) 6,0 6,5 4,0 6,1 14.7 52.2 59.6 Capitaux a long-terme (net)

Direct investment 3.3 -0.3 -0.6 -1.0 -1.4 -1.4 -1.4 Investissements directsGovernment long-term loans 3'4 5.4 4.1 4.5 5.1 30.9 42.1 Dettes a long-tense de l'EtatDigbursements (4.0) (6.0) (4.7) (5.3) (6.2) (33.0) (45.1) DgcaissementsAmaortization (-0.6) (-0.6) (-0.6) (-0.8) (-1.1) (-2.1) (-3.0) AmortissementOther public - 1.2 0.7 -0.l -0.1 -0.1 - Autre dettes publiques

State and private enterprises -0.7 0.2 -0.2 2.7 8.0 22.8 14.9 Entreprises publiques et priveesTrust Fund - - - - 3.1 - 4.0 Fonds fiduciaiieOther (net) 2/ -7.1 -0.4 1.0 1.4 2.3 - 1.3 Autres (net) 2,

SDR allocation - - - - 1.0 1.0 Allocation de DTS

Reserve changes (- 2 increase) 8.7 7.2 1.6 - 3.0 1.6 43.8 47.2 Changements des riserves (- - aumentation)

1/ Provisional/Provisoires

2/ Includes short-term capital and errors and omissions/Y compris capitaux a court-terme et erreurs et omissions,

Sources: Central Bank of Madagascar and IMF estimates/Banque centrale de Madagascar et estimations du FMI

Table 3.3: MERCHANDISE EXPORTS. f.o.b.. 1972-1979iEPORTATIONS DES MARCh'ANDISES. f.o.b., 1972-1979

(FMC Million/en millions de FMO)

1972 1973 1974 1975 1976 1977 1978 1979 3980

8 onitho

A. Agricultural products A, Produits asricoles

Food crops 23.926 727875 28,734 38.413 41_742 59.241 66,_359 60.468 Produits aliaentaires

Coffee 11,645 13,300 15,600 14,073 28,326 40,456 36,583 38,074 33,360 Cafe

Vanilla 3,918 27217 4,476 2,966 4,733 8,752 8,645 3,114 3,457 Vasille

Cloves 4,207 4,058 4,008 17,345 4,304 4,930 17,223 14,979 5,266 Girofle (clous)

Pepper 1,004 1,025 1,047 1,362 1,520 1,826 1,070 971 808 Poi-re

Cocoa 141 238 418 332 561 1,130 757 1,116 4MR Cacao

Rice 1,651 560 1,071 565 499 377 171 157 187 Riz

Lima beans 776 815 1,643 1,225 1,134 1,105 1,157 672 552 Pois do cap

Buas..s 101 227 249 200 302 247 337 252 93 Bananes

Others 483 435 262 345 363 418 416 1,024 Autres

Other crcps 2.905 3,789 4.220 3,468 2,842 2.966 2.598 2.854 Autres produits agricoles

Sisal 921 1,552 2,546 2,134 1,242 1,497 1,209 1,774 1,267 Sisal

Raffia 473 473 610 787 631 397 433 488 364 Raphia

Medicinal & perfumery plants 358 223 355 513 580 565 313 341 721 Plantes pour parfumerie etmedecine

Others 1,153 1,541 709 34 389 507 643 251 Autres

Livestock & fishing products 7,197 7.938 8.852 5_29 5.345 7.045 5.865 8.057 Pruduits d'elevage et de la p'che

Fish 1,731 2,216 3,534 2,380 3,087 4,554 3,116 3,686 2,714 Poisosos et eruataces

Meat & meat products 4,291 4,667 4,274 2,272 1,597 1,777 2,149 3,326 1,683 Viandes et preparation de viasdea

Others 1,175 1,055 1,044 377 661 714 600 1,045 . Autres

B. Manufactured goods 6 mineral products B. Produits manufactures` et mineraux

Food 1,921 1.947 2.424 5.193 2,852 2,188 2_029 1,945 Alimentation

Sugar 1,475 1,574 1,728 4,770 2,218 1,703 1,434 1,365 24 Sucre

Molasses 92 58 388 129 194 152 262 308 167 Melasses

Tapioca 226 207 139 145 330 163 228 147 98 Tapioca

Others 128 108 169 149 110 170 105 125 .. Autres

Other processed agricultural products 1,369 2.229 2_744 628 1.782 1,958 1_742 1.428 .. Autres produits agricoles transformes

Cloves oil 755 1,296 2,004 225 1,240 1,094 1,157 1,004 548 Essence de girofle

Ylang ylang oil 113 131 145 106 129 200 144 125 61 Esse-ce de ylang ylang

Oil-cake 256 451 224 166 234 378 243 163 129 Tourteaua

Others 245 351 371 131 179 286 198 136 Autres

Textiles 4 shoes 202 588 1575 _320 2,069 2,352 1,662 2,165 Matieres textiles et chaussures

Cotton thread and fabrics 86 464 1,395 1,221 1,915 2,198 1,530 1,917 839 Fils at tissus de coton

Shoes 34 36 56 35 51 38 35 13 15 Chaussures

Others 82 88 124 64 103 116 97 235 .. Autres

Hood and naper products 177 309 483 186 237 300 269 181 .. Bois et ouvrages en papier

Mi-eral Yroducts 1.932 1.772 2.968 2,668 3.825 4.088 4,765 3,545 .. Produits mineraux

Chronite 843 572 1,601 1,267 2,408 2,538 3,146 1,834 1,428 Minerais de chrone

Graphite 663 648 825 1,059 1,061 1,129 1,277 1,283 994 Graphite naturel

Mica 283 383 369 169 158 302 215 256 301 Mica

Prec:os . ad semi-precious stoses 104 .122 119 161 184 118 127 140 106 Pierces precieuses ou fines

Others 39 47 54 12 14 1 - - Autres

Petroleum products 1,671 2,281 5.44 5_546 43_23 2.346 1 2,235 1,194 P-duits

All other products 564 003 820 593 1. 018 444 559 947 Autres produits

Total eaports 41,864 44,751 58R504 63,044 66 035 829927 87,214 83,82= 60s490 Exportations totales

1/ See details in table3.5/Voir details dans tableao 3,5, .. Not acoilhbli/N-n dispo-ible

Soorce: INSRE, Statistigues do Comserce Eateteor de Madagascar

Table 3.4 . - MAJOR MERCHANDISE EXPORTS. 1972-1979EXPORTATIONS DES MARCHANDISES PRINCIPALES. 1972-1979

(quantities in metric tons/quantites en tonnes}

1972 1973 1974 1975 1976 1977 1978 1979 1980(8 months/

A. Agricultural Products A. Produits a_ricoles

Coffee 56,245 65,402 65,381 67,437 72,960 50,189 55,157 63,057 49.002 Cafe

Vanilla 1,215 720 1,353 858 1,101 1,713 1,459 437 361 Vanille

Cloves 6,116 6,240 5,070 22,254 4,399 3,598 14,767 13,493 3,495 Girofle (clous)

Pepper 4,187 3,740 2,898 4,095 3,943 3,748 2,153 2,570 2,128 Poivre

Cocoa 1,060 1,046 1,139 1,246 1,653 1,572 1.208 1,834 814 Cacao

Rice 26,039 6,276 6,532 4,547 4,397 2,483 1,127 1,059 1,263 Riz

Lima beans 17,190 19,097 19,790 16,476 14,865 12,078 8,608 7,635 2,883 Pois du cap

Bananas 4,156 6,557 7,015 4,487 5,767 4,196 5,501 4,360 1,736 Bananes

Sisal 24,445 22,814 21,057 23,086 16,271 17,010 15,228 15,423 9,462 Sisal

Raffia 4,677 4,076 3,818 4,125 3,394 2,115 2,342 2,546 1,853 Raphia

Medicinal & perfumery plants 2,043 1,272 1,496 1,596 1,492 1,363 690 878 643 Plantes pour parfumerie et me'decine

Fish 3,738 7,027 14,337 6,762 3,300 4,315 3,489 3,563 2,451 Poissons et crustaces

Meat & meat products 14,131 12,825 10,855 5,351 3,857 4,126 4,544 5,977 2,868 Viandes et preparation de viandes

B. Manufactured goods & mineral products B. Produits manufactures et mineraux

Sugar 36,901 37,286 13,612 39,897 29,953 26,350 23,240 19,580 200 Sucre

Molasses 18,934 8,850 36,000 21,500 17,009 21,350 22,300 17,730 9,100 Melasses

Tapioca 4,045 3,205 1,790 1,620 3,592 1,568 2,510 1,128 744 Tapioca

Cloves oil 996 1,346 1,128 261 1,316 948 1,056 929 603 Essence de girofle

Ylang ylang oil 28 28 24 19 21 26 18 17 8 Essence de ylang ylang

Oil-cake 10,009 13,032 6,772 8,173 9,059 10,487 7,775 5,285 4,378 Tourteaux

Cotton thread and fabrics 139 812 2,508 3,200 4,579 4,240 3,004 5,506 1,434 Fils et tissus de coton

Shoes 55 51 72 32 32 28 20 8 11 Chaussures

Rosewood 421 1,108 2,794 385 891 - 2 219 - Bois brut des palissandres

Chromite 117,885 97,952 180,320 85,498 117,414 116,232 144,662 109,147 95,535 Minerais de chrome

Graphite 18,334 17,568 17,451 17,021 16,370 17,003 16,861 14,588 8,153 Graphite naturel

Mica 1,149 1,805 1,876 1,318 845 2,046 1,317 1,207 1,114 Mica

Precious & semi-precious stones 182 205 238 426 489 253 202 104 67 Pierres precieuses ou fines

1/ 1/

Petroleum products 300,176 347,207 312,803 276,367 208,904 126,959 73,931 94,877 36,090 Produits petroliers

1/ See details in table 3.6 /Voir details dans tableau 3.6.

Source: INSRE, Statistiques du Commerce Exterieur de Madagascar.

Table 3.5 EXPORTS OF PETROLEUM PRODUCTS, 1972-1979EXPORTATIONS DES PRODUITS PETROLIERS, 1972-1979

(Value f.o.b. in million of FMG/Valeur f.o.b.

en millions de FMG)

1972 1973 1974 1975 1976 1977 1978 1979 1980

(8 mths/8 mois)

Jet fuel - 1.2 42.0 13.9 8.4 11.2 18.3 4.6 - Essence d'aviation

Gasoline, super 109.5 205.4 216.5 727.4 509.0 27.9 - - _ Super carburant

Gasoline, regular 262.4 305.2 812.2 1120.4 680.2 114.0 64.0 13.9 * Essence de tourisme

White spirit 2.4 1.0 9.1 4.7 3.2 - - - * White spirit

Kerosene 139.6 239.6 864.4 995.3 498.9 53.3 64.5 19.8 * Petrole lampant kerosene a

Gas oil 363.1 634.2 1216.8 1123.4 623.8 50.5 74.8 109.4 8.0 Gas-oil

Fuel oil 526.9 660.4 2182.7 1542.3 1974.5 2086.2 1142.9 2087.6 1186.2 Fuel oil

Lubricating oil 1.6 0.7 28.8 12.6 - 2.1 0.5 0.1 0.3 Lubrifiant

Others 265.8 232.9 271.1 5.9 24.5 - - - - Autres

Total 1671.3 2280.6 5643.6 5545.9 4322.5 2345.2 1365.0 2235.4 1194.5 Total

Source: INSRE, Statistique du Commerce Exterietrr de Madagascar.

* Negligible

Table 3.6 - EXPORTS OF PETROLEUM PRODUCTS, 1972-1977EXPORTATIONS DES PRODUITS PETROLIERS. 1972-1977(quantities in tons/quantites en tonnes)

1972 1973 1974 1975 1976 1977 1978 1979 1980(8 months/8 mois)

Jet Fuel - 30 1,478 278 142 156 258 65 - Essence d'aviationGasoline,super 9,685 17,874 7,488 22,640 13,940 726 - - Super carburantGasoline, regular 26,879 30,478 33,359 34,978 18,975 3,042 1,504 294 * Essence de tourismeWhite spirit 72 41 163 78 47 - - - * White spirit

Kerosene 13,712 23,241 36,046 35,672 15,657 1,505 1,643 426 * Petrole lampant keroseneGas oil 44,001 65,073 59,023 48,344 23,147 1,627 2,230 2,074 81 Gas-oilFuel oil 178,217 190,371 164,550 134,021 136,508 119,889 68,293 92,018 36,007 Fuel OilLubricating oil 12 8 269 352 - 10 3 1 2 Lubrifiant

Source: INSRE, Statistiques du Commerce Exterieur de Madagascar.

* negligible

Table 3.7 : MERCHANDISE IMPORTS, c.i.f., 1972-1979IMPORTATIONS DES MARCHANDISES. c.a.f. 1972-1979

(FMG million/en millions de FMG)

1972 1973 1974 1975 1976 1977 1978 1979 1980(8 months/

8 mois)

Food & beverages 5_827 7,245 12,638 8. 429 6,976 9.947 14,393 17,192 .. Aliments & boissons

Rice 1,223 2,869 9,259 4,893 4,360 4,325 8,930 10,989 2,421 RizOther cereals & cereal products i,148 1,059 881 968 1,045 2,866 2,994 2,869 1,915 Autres cereales et preparations de cerealesDairy products 1,417 919 1,041 988 835 1,255 1,205 1,747 896 Produits laitiersProcessed food 868 1,030 708 801 369 752 529 825 367 Produits alimentaires transformesBeverages 958 1,159 518 553 211 508 458 440 247 BoissonsOther 213 209 231 226 156 241 277 322 ,, Autres

Other consumer goods 9,172 8_725 9,401 11,844 10,901 13,546 12,796 17_946 ,, Autres denrees de consommsation

Tobacco & tobacco products 490 256 201 363 258 255 922 1,102 430 Tabacs et produits de tabacSoap & cosmetics 260 251 145 188 127 107 124 303 134 Savons & produits cosmntiquesPharmaceuticals 1,623 1,636 2,398 2,467 3,235 3,665 4,065 4,698 2,717 Produits pharmaceutiquesBooks & periodicals 358 306 456 603 626 830 945 1,062 880 Livres & journauxTextile 1,287 1,004 945 978 1,082 1,248 850 1,471 629 V4etements et ouvrages en textilesRubber products 1,028 893 1,072 2,529 2,282 1,567 1,389 2,993 2,100 Produits en caoutchoucCutlery & household tools 202 132 236 202 272 717 456 1,066 854 Coutellerie & outillageElectrical equipment 1,192 1,539 1,825 1,880 513 1,080 876 1,419 1,600 Appareils electriquesAutomobiles, motocyclettes, etc. 363 349 331 596 576 1,887 640 1,130 1,251 Automobiles, motocyclettes, etc.other 2,910 2,360 1,793 4,260 1,930 2,190 2,529 2,916 Autres

1 / ,, 1/ a'Mineral fuels & lubricants 4,454 4,311 / 12,119 15_697 13,647 13_107 14,300 14,954 14,006 Combustibles & lubrifiants mineraux -

Crude petroleum 3,089 3,315 10,751 14,601 12,468 10,851 11,293 8,729 5,948 Huiles brutes de p'etrole -

Petroleum products 1,249 929 1,266 919 942 2,062 2,811 5,793 7,811 Produits petroliers raffinesOther 116 67 102 177 237 194 196 432 247 Autres

Other intermediate goods 15,560 13,489 21,613 26,63 5 22.035 29.373 31,242 42,950 Autres produits iotermediaires

oil & fats (animal & vegetable) 729 762 2,092 2,309 2,508 2,384 2,173 4,288 2,492 Huiles & graisses (animales & vegetales)Textile fibers & tissues 3,002 2,065 2,539 3,010 3,206 4,693 4,637 7,117 4,115 Fibres, fils & tissus textilesPlastics 2/ 721 692 1,340 1,318 1,308 2,075 2,020 2,923 2,258 Mati;res 2 plastiquesFertilizer- 137 348 405 839 559 481 1,892 1,005 728 Engrais -Paper & pulp 820 742 1,308 1,718 1,226 1,858 1,668 2,096 Papier & pates a papierCement 471 393 334 766 600 844 918 1,342 996 CimentIron & steel products 3,693 3,206 5,748 6,205 4,175 6,657 6,626 9,864 8,773 Produits en fonte, fer & acierParts for cars, etc. 971 761 958 1,538 1,016 1,553 1,530 2,464 1,491 Parties et pieces des automobiles, etc.Animal feed 71 61 32 42 40 43 37 69 52 Aliments pour animauxother 4,845 4,460 6,257 9,564 7,317 8,785 9,741 12,382 Autres

3/ 3/Capital goods 16,202 11,386 11,486 14,448 14_877 19,244 26. 901 42,278 21,894 Biens d'equipement

Machinery 7,012 4,163 5,183 8,086 6,808 8,342 15,717 14,469 11,953 Machines, appareils, engins mecaniquesElectrical equipment 2,865 2,161 2,210 2,276 2,507 3,295 3,595 4,178 3,068 Machines & appareils electriquesTransport equipment 5,211 4,392 3,260 3,831 4,583 5,755 6,076 21,454 5,130 Materiel de transportTools & instruments 1,102 663 822 625 975 1,842 1,505 2,146 1 ,725 Outils, instruments et appareilsLive animals 21 7 11 5 4 10 8 31 18 Animaux vivants

Total merchandise imports 6__ 62,… …047 68 434 85,217 99J632 35,319 21,894 Importations de archandises, total

Not available/Non disponible1/ See details in table 3.9 /Voir details dans tableau 3.9.2/ See details in table 7.4 /Voir details dans tableau 7.4.3/ See details in table 3.10 /Voir details dans tableau 3.10.

Source: INSRE, Statistiques do Cosercc Exteriour do Madagascar.

Table 3.8: IMPORTS OF FOOD, BEVERAGES AND RELATED PRODUCTS, 1972-1979IMPORTATIONS DES PRODUITS ALIMENTAIRES BOISSONS ET .RODUITS SIMILAIRES 1972_1979

(in metric tons/em tonnes)

1)72 1573 3q74 1975 1076 1977 1078 1979 1980(8 months/

8 mois)

I.Foo,' I. Produits aligrentaires

Unpr-cesse,' & Semiprocessed Non transformes ou semi-transformes

Of -,nimal orig in d1origine animale

Meat 21.6 21.9 8.7 n.2 9.5 - - - Viandes et abats comestibles

Fish & shellfish 33,3 16.7 64.2 15.2 0.1 5.0 26.5 37.5 * Poissons, crustaces, mollusques

Con0ensed milk 5,611.6 2,158.2 1,897.n 1,470.0 1,659.8 2,182.7 2,217.0 3,120.6 1,869,0 Lait concentre

Butter 695.3 934.0 964.9 951.3 701.6 1,276.4 867.3 1,765.2 253.0 Beurre

Cheese 437.8 501.2 137.0 114.8 60.3 147.1 114.0 66.5 112.5 Fromage

Of vegetable origin d-origine vegetale

Rice 48,719.3 70,964.3 99,396.2 57,311.9 62,826.6 76,929.1 135,663.4 175,442.8 43,807.6 Riz

Wheat flour 34,653.6 24,904,9 10,581.^ 10,273.9 10,498.1 41,076.1 42,307.5 41,578.6 20,334.5 Farine de froment

Malt 1,288.0 1,916.3 1,949.1 2,766.1 3,866.5 2,'47.6 5,291.1 ',477.4 1,874.5 Malt

Other cereal products 1,475.5 1,357.9 800.8 547.6 658.8 734.7 616.6 567.0 241,5 Autres produits cerealiers

Tea 63.5 99.7 35.8 80.9 17.6 10.9 0.3 0.5 * The

Hops 15.0 30.5 30.0 - 21.3 23-5 42.8 17.0 - Houblon

Other 2,511.7 2,174.0 1,017.0 - 2,008.7 1,755.5 1,786.2 1,858.1 1,190.3 Autres a

Processed Transformes

Meat preparations 391.0 409.9 73.1 23.2 5.7 3,273.5 3.2 47.6 58,5 Pre'parations de viandes

fish & shellfish 511.6 787.2 488.0 751.9 162.1 308.1 1.6 24.4 60,7 Preparations de poissons, crustaces, etc.

preparationssugar 994.8 923.0 1,072.9 74n.4 442.6 845.5 781.0 1,091.2 422.8 Sucreries

Cereal preparations 523.6 645.2 656.2 683.9 375.3 321.C 1,009.1 2,302.4 214,4 Pre'parations a base de cereales

Veretable & fruitpreparations 852.1 742.1 329.5 293.5 22.6 13.1 i8.7 45.6 16.9 Preparations de legumes et fruits

Other 680.7 1 ,108.9 424.0 - 168.8 284.7 303.8 416.5 218,0 Autres preparations alimentaires

II. 8everger eII. Boissons

Wine 0,16A.1 10,q05.0 ",392.2 3,877.8 114.0 1,215.2 747.0 517.6 709.2 Vin

Othe- alcoholic beverages 1,132.' 7979.4 271.5 238.3 362.8 723.1 314.4 297.7 203,8 Autres boissons alcooliques

Vinega 228.0 376.9 391.1 191.3 24.0 1c.1 67.5 63.5 * Vinaigre

Other 1,781.q 2,160.3 1,1Q3.l 1,964.5 26.5 0.4 1,285.7 4.0 * Autres

III. Tvbncco Products TI1. Tabac & nroduits de tabac

Unmanufacturer' 1,366.4 424.3 164.6 409.1 2,5.O 335.8 1,600.6 1,592.6 709.5 Tabacs bruts

Manufacturedl 231.9 114.5 65.7 135.0 116.1 59.6 112.9 154.7 79.4 Cigares, cigarettes, etc.

IV. Oils & fats (animol & 8,755.5 8,087.8 11,572.6 14,651.0 15,979.7 13,410.9 14,098.5 23,555.7 13,548.0 IV.Jliles & graisses (animales & vegetalea)

vegetable)

V. Live animals- 16.4 1.0 1.1 0.6 0.6 2.0 1.1 8.6 3,0 V. Animaux vivants-'

VI. Animal feee 827.5 485.9 163.? 221.0 213.5 185.2 148.7 265.7 217.4 VI. Aliments pour animaux

/1 Cattle, pits, sheep, poats and poultry/Bovins, porcins, ovins, caprins et volailles. * Negligible

Source: INSRE, Statistiques du Commerce Extcrieur de Madagascar.

Table 3_9: IMPORTS OF MINERAL FRUELS, LUBRICAITS, AND RELA1ED MATERIALS, 1972-1979IMPORTATIONS DE CARBURAN7S MINERAUX, LUBRIFIANTS ET NATIERES SIMIIAIRES, 1972-1979

(value c.i.f., In million of MFG,)(valeur c.a.f., en millions de FMG)

1972 1973 1974 1975 1976 1977 1978 1979 (8 aths/Snoi)

Houille, derive de la houille, goudrons mingraluxCoal and derivatives tar 115.7 68.9 101.8 177,6 237.1 192.4 196.1 432.2 247.3

Houille et dErive de la houilleCoal 105.3 58.7 83.9 101.0 197.5 160.4 167.0 379.8 221.7 Cokes et Semi-cokeCoke and semi-coke 2.2 4.4 2.3 5.7 7.2 8.8 19.7 9.9 3.0 Goudrons mindrauxMineral tars 4.4 3.3 6.8 3.5 3.6 6.9 0.4 30.5 9,5 Benzol, toluol, xylol, etc.Benzole, toluole, zylole, etc. 2.8 0.9 2.7 3.1 10.7 7.4 6.5 4.4 10,5 Autres produits provenant des goudronsOther products of mineral tar 0.8 0.2 5.3 3.2 2.0 3.8 1.5 3.0 I,i Brai et coke de braiPitch and gas carbon 0.2 1.2 0.8 1.1 16.1 5.1 1.0 4,6 1,5

Petrole, carburants et lubrifiants petroliersPetroleum, fuels and lubricants 3808.3 3928.7 11414.9 15100.1 12778.1 11848.9 13359.1 13778.1 12,117,4

Nuiles brutes de petroleCrude petroleum 3089.1 3315.1 10750.5 14601.2 12468.0 10850.5 11293.2 8728.7 5,948.7 Essence d'aviationAviation spirit 103.9 104.0 54.7 110.7 88.4 85.9 70.1 62.3 69.7 Super carburantMotor spirit, super 7.6 2.8 - - 0.5 78.7 30.7 374.5 3,5 Essence de tourismeMotor spirit, normal 1.5 - 6.3 3.3 9.5 128.5 1.2 425.5 823.9 White spiritWhite spirit 0.8 3.3 2.4 3.9 - 0.1 23.4 - 1.9 P6trole lampantrkerozBneKerosene 7.9 5.0 19.3 0.1 1.8 114.7 224.4 474.0 1,735,9 Carburant obtenu par mglangeMotor spirit, mixed 0.4 0.1 - - 0.7 0.9 - 0.7 0,5 Autres produits petroliers legersOther light petroleum oils 0.1 0.7 0.4 9.7 - 2.2 1.9 0.8 0,1

Gas oil 107.6 14.5 141.8 3.1 10.7 182.4 806.2 3388.6 2,904.6 Fuel-oilFuel oil 0.7 - 46.6 8.1 - - 2.2 - - Huile de graissage et lubrifiantLubricating oil 475.4 481.5 379.8 336.7 194.3 177.2 204.7 302.7 178.9 Autres huiles lourdes de petroleOther heavy petroleum oil 1.6 1.0 8.7 22.7 3.9 216.4 681.9 16.8 340,5

Gaz de p8trole aPetroleum gases and coke 11.7 0.8 4.3 0.6 0.3 11.4 19.2 3.5 109.2 Maz de pgtrole

Residual petroleum products 530.0 313.2 602.1 419.8 631.9 1065.4 745.6 Y 43.1 ,614.9 atires bitumeuses, cires de ptrole

VaselinePetroleum jelly 3.4 10.1 10.7 18.3 16.6 10.8 26.1 8.0 9,1 ParaffineParaffine wax 303.1 214.7 322.3 264.0 301.5 356.8 510.1 475.5 861,9 Autres cires de petroleOther petroleum waxes 6.1 3.8 8.7 10.3 6.0 261.6 35.8 148.1 143,8 Bitume de pgtrolePetroleum bitumen 141.0 70.2 243.2 109.7 178.5 423.2 99.1 93.0 538,7 Mastics bitumeuxBituminous mastics 5,1 6.3 3.2 4.4 3.3 22.0 4.5 12.5 8,8 Bitumes fluxes et emulsionsBitumen cut-backs and emulsions 67,4 7.6 11.5 12.1 122.4 5.7 54.6 0.1 11,3 Autres melanges bitumeuxother bituminous mixtures 3,8 0.5 2.5 1.0 3,6 5.3 15.4 5.9 41,3

TotalTotal 4454.0 4310.8 12118.7 15697.5 13647.1 13106.7 14300.8 14953.4 _33979.6

Source: INSRE, S

Table 3.10: IMPORTS OF CAPITAL GOODS, 1972-1979IMPORTATIONS DE BIENS D'EQUIPEMENT, 1972-1979(FMG million/en millions de FMG)

19801972 1973 1974 1975 1976 1977 1978 1979 (8 months/8 mois)

In(current prices Aux prix courants(c.i.f.) (c.a.f.)

Live animals 20.8 7.1 11.3 4.9 3.5 9.7 7.4 30.9 18.2 Animaux vivantsMachinery /l 7,011.6 4,162.6 5,182.5 8,086.1 6,808.0 8,341.7 15,716.8 14,469.3 11,953.4 MachinerieElectrical equipment-l 2,856.1 2,161.0 2,210.2 2,275.8 2,507.0 3,294.5 3,595.0 4,178.0 3,637.4 Equipement

Tools Z1 390.3 271.5 226.9 591.2 321.3 659.8 490.5 803.4 695,3 Outils_Instruments & apparatus/l 711.7 392.1 594.9 659.3 653.5 1,182.9 1,014.8 1,342.1 1,029,8 Instrumenil et

appareils_Transport equipment 5,211.2 4,391.8 3,260.4 3,830.8 4,583.7 5,755.3 6,076.1 21,454.0 5,130,3 MatEriel de

transportRail (234.8) (228.3) (518.9) (222.6) (327.6) (689.1) (31.0) (617.1) (161,2) Voies ferreesRoad/

2(3,736.6) (2,241.5) (2,619.5) (3,469.7) (3,590.5) (4,580.2) (5,027.4) (9,168.9) (4,581,8) Routier 2/

Air (254.9) (1,405.9) (62.5) (116.4) (662.2) (117.8) (579.7)(11,078.6) (234.7) Aerien -Maritime & fluvial (984.8) (516.0) (53.4) (22.1) (3.4) (368.2) (438.0) (589.4) (152,7) Maritime et

fluvial 3

Total 16,201.7 11,386.0 11,486.3 15,448.1 14,877.0 19,243.9 26,900.6 42,277.7 22,464.4 i

1l Excluding consumer durables/Non compris les biens de consommation durables.12 Excluding passenger cars, motorcycles, etc., and spare parts for such vehicles/non compris automobiles, motocyclettes, etc.

et leurs pieces dEtachees.Source: INSRE, Statistiques du Commerce Exterieur de Madagascar

Table 3.11: EXTERNAL TRADE INDICESINDICES DU COMMERCE EXTERIEUR

(1978 = 100)

1972 1973 1974 1975 1976 1977 1978 1979 1980

Price index Indice des prix

Exports 46.1 46.5 55.5 55.0 76.1 111.5 100.0 102.9 (110.0) Exportations

Imports 33.5 38.4 65.4 70.6 87.9 89.7 100.0 109.3 (126.5) Importations

Quantum index ITdice des quantites

Exports 104.2 110.4 120.9 131.3 99.4 85.2 100.0 93.3 ( 88.6) Exportations

Imports 154.9 118.2 103.3 110.9 78.1 95.4 100.0 138.8 (127.7) Importations

Terms of Trade 137.6 121.1 84.9 77.9 86.6 124.3 100.0 94.1 ( 87.0) Termes de 1'echange

Source: Mission estimates/Estimations de la mission.

Table 3.12: DIRECTION OF TRADE: EXPORTS, f.o.b., 1972-1979

EXPORTATIONS DE MARCHANDISES PAR PAYS DE DESTINATION. f.o.b., 1972-1979(FMG million/en millions de FMG)

1972 1973 1974 1975 £976 1977 t978 1979 1980

(8 mths/8 mois)

Total Merchandise Exports 41,864.1 44,750.7 58.503.9 63. 043.6 66.034.9 82,926.7 872 83.825,6 56,526.9 Total des exportations de marchandises

France 16,050.7 16,679.0 19,802.5 12,646.8 19,367.3 21,976.7 20,150.6 21,656.0 11,000,2 France

USA 8,572.6 7,819.9 12,060.3 7,346.6 10,962.5 18,500.3 21,879.7 12,284.8 11,813.0 Etats-Unis

Reunion 3,183.6 3,803.5 4,724.4 6,617.8 4,000.2 2 359.9 2,447.5 2,714.0 2,279.3 La Reunion

Japan 1,934.5 2,877.0 3,463.5 2,240.6 4,958.3 7,b08.3 3,211.8 4,384.8 7,131,9 Japon

Germany, Fed. Rep. of 1,447.9 1,770.2 2,695.0 4,269.2 4,909.3 6,986.2 6,552.3 6,369.2 4,983,5 Allemagne, Rep. Fed. d'

United Kingdom 690.9 881.2 1,911.7 2,199.0 1,576.0 2,095.5 1,426.3 1,166.9 2,632.6 Royaume-Uni

Malaysia 1,762.7 2,748.6 1,720.1 2,421.5 1,826.8 765.6 - 451.1 224.6 Malaisie

Netherlands 735.4 1,019.7 1,546.5 804.8 1,493.2 664.4 1,095.6 2,528.9 2,391,1 Pays-Bas

Italy 900.8 843.0 1,301.9 1,463.6 2,680.6 1,806.6 1,181.0 2,846.0 1,582,3 Italie

Mauritius, Rodriguez, Diego Garcia 276.4 322.1 1,179.2 582.4 200.9 70.2 264.2 332.5 155,0 Maurice, Rodriguez, Diego Garcia

Comoro Islands 663.5 534.0 748.9 594.8 654.0 458.6 351.4 442.1 63,6 Comores

Yugoslavia 23.0 164.9 706.6 1,149.0 1,607.8 - 414.4 1,603.4 1,505,2 Yougoslavie

Belgium/Luxembourg 259.2 392.5 514.3 1,018.6 551.6 6,986.2 681.3 689.4 542.6 Belgique/Luxembourg

Poland 255.7 64.8 383.9 65.2 524.9 474.1 7.9 14.4 5,2 Pologne

USSR 562.5 47.7 372.2 138.6 996.6 3,898.7 721.5 220.6 808.3 URSS o'

Bulgaria 5.1 - 308.5 - 9.9 - - - - Bulgarie

Gibraltar - - 258.2 - - - - - 754.6 Gibraltar

Sweden 6.8 8.3 204.1 278.3 14.1 47.1 363.7 178.9 337,9 Suede

China, People's Republic of - 108.5 196.0 37.4 24.7 1,300.6 1,218.0 24.6 - Chine, Rep. Pop. de

Spain 48.0 144.5 172.9 451.6 384.5 676.4 4,195.5 2,331.3 3,181.6 Espagne

French Polynesia 80.4 95.7 171.0 35.5 46.0 11.3 2.6 1.7 - Polynesie Fransaise

Canada 126.7 62.5 123.0 161.0 734,3 328.4 38.3 146.1 129.4 Canada

Australia 65.7 84.1 75.3 24.3 27.0 15.7 16.1 14.1 8,8 Australie

Nigeria - 17.3 72.7 - - 51.9 - - - Nigeria -

New Caledonia 32., 30.2 72.5 50.1 19.2 15.7 14.9 6.8 - Nouvelle Caledonie

Morocco 40.2 40.1 69.6 583.0 54.0 117.1 90.5 125.0 52,0 Maroc

Switzerland/Lichtenstein 26.3 121.3 63.5 85.4 412,4 883.0 833.0 364.8 71.0 Suisse/Lichstenstein

Senegal 110.3 114.9 57.0 112.3 42.0 50.4 14.6 397.6 1,8 Se`negal

Denmark 108.7 35.6 55.9 102.8 146.4 224.3 51.8 161.0 168,9 Danemark

Greece 76.7 141.2 55.2 122.8 133.7 126.5 32.7 4.9 0,1 Grece

Algeria 286.1 212.8 50.8 244.0 268.4 3,685.0 1,197,5 4,521.1 1,742,2 Algerie

Martinique/Guadeloupe 53.9 65.6 39.6 34.3 17.0 - - - - Martinique/Guadeloupe

India 43.9 70.7 35.5 14.8 14.4 15.9 39.4 55.4 65,1 Inde

Kenya 5.4 8.4 33.6 0.8 3.4 0.2 3.9 244.0 1,0 Kenya

Pakistan - 1.6 14.6 0.9 - - - - 0,9 Pakistan

Hong Kong 69.7 51.9 7.0 14.8 149.0 26.1 745,3 1,265.6 758,2 Hong Kong

Tunisia 0.3 - 1.7 672.0 - 3.2 - 248.6 - Tunisie

Finland 1,3 131.8 0.7 - 0.4 2.3 0,2 0.9 - Finlande

Ivory Coast 724.4 882.2 0.3 20.7 0.2 0.3 0.3 0.6 4,9 Ctte J'Ivoire

Indonesia 886.9 225.7 - 13,479.3 1,878.0 1;003.9 11,950.9 10,844.0 2,026,3 Indonesie

Romania 151.2 131.8 - - - 12.5 - 89.9 - Roumanie

Niger 173.0 93.9 - - - Niger

China, RKp. of 62.0 76.7 - - Chine, Rep. de

Cameroon 0.5 65.6 - 8.9 7.5 11,9 Cameroun

Kuwait 13.8 - - - - - 22.1 - - Kowait

Ships: Malagasy 111.3 248.6 550.5 - - 46.1 24.1 77.1 92,0 Navires: Malgaches

French 173.2 178.1 850.1 - - 13.5 43,3 221.6 * Francais

Other 274.3 457.7 1,025.8 - - 7.5 0.4 8.2 a Autres

Source: INSRE, Statistiques do Commerce Extersor de Madagascar * Negligible

Table 3.13 : DIRECTION OF TRADE: MPORTS. c.i,f., 1972-1979

IMPORTATIONS DE MARCHANDISES PAR PAYS DE PROVENANCE, c.a.if, 1972-1979(FMG million/en millions de FIlG)

1972 1973 1974 1975 1976 1977 1978 1979 1980

(8 mths/8 mois)

Total Merchandise Insects 51.754.5 45.155.3 67.256,9 78,046.6 684.434.3 85,216.8 99,632.2 135.319.4 :'9,24',3 Total des io

France 28,645.1 22,138.4 24,094.4 31,953.6 25,523.0 33,549.6 34,730.6 43,586.0 33,321.0 France

Qatar 2,635.0 2,308.5 7,976.5 6,931.2 6,317.7 2,609.2 1,115.7 - - Qatar

China, People's Rep. of . 2,431.7 7,041.4 2,524.9 2,521.7 3,449.4 6,215.7 6,461.0 1,464,4 Chine, Rep. Pop. deGermany, Federal Rep. of 4,922.3 3,483.0 5,879.7 6,538.7 6,189.0 7,069.9 13,882.5 12,516.3 7,729,5 Allema-nee, Rep. Fed. d'United States 2,023.6 3,408.0 4,734.1 3,082.9 3,040.3 2,816.4 3,382.1 14,538.4 2,250,3 Etats-Unin

Japan 2,301.6 2,034.8 3,323.4 3,025.8 2,508.7 4,414.0 4,723.7 7,741.3 5,072,9 JaponItaly 2,002.1 1,380.6 1,579.2 2,169.6 2,143.0 4,059.4 2,991.1 5,159.2 2,984.1 ItalieIraq -_ 1,443.1 30.9 167.6 7,241.3 5,774,5 8,800.9 5,948,7 IrakNetherlands 1,224.6 1,020.2 1,413.6 1,386.9 1,479.0 2,113.1 2,145.3 2,909.4 1,729.3 Pays-Ba-

Saudi Arabia 213.5 862.5 1,340.5 7,171.4 2,874.6 - 980.7 - 375,2 Arabia Saoudite

United Kingdom 895.4 719.6 1,136.1 1,149.4 1,549.3 1,931.8 2,097.6 2,694.2 2,809.6 Royaune-UniBelgium/LuxembourR 560.4 696.9 1,032.6 1,461.8 1,236.4 1,480.1 1,660.1 2,180.9 2,263,1 Beligque/Lu"emboorgSwitzerland/Liechstentein 508.5 198.0 457.7 641.6 940.3 997.6 1,377.0 1,766.6 1,324,1 Suinse/LiechtensteinKuwait 27.7 69.1 429.7 146.0 110.3 89. 2,038.4 2,259.5 2,806,1 Koweit

Hung Kong 200.7 154.2 401.1 499.8 231.0 610.4 740.2 1,545.7 1,079.8 Hong Kong

Kenya 104,9 266.5 337.9 381.0 538.3 616.0 486.1 572.9 137.4 KenyaSweden 90.2 145.7 278.3 231.6 125.7 693.7 566.0 1,343.2 794,5 SuedeIran 478.6 130.3 197.0 587.7 117.6 254.6 83.8 75.2 26,8 IranMorocco 315.6 360.0 196.7 386.2 39.5 22.7 19.0 10.1 11,0 Ma-ccAngola 48.1 120.4 188.4 0.4 - - - - - Angola

Pakistan 49.6 226.1 178.6 1,496.4 205.3 494.5 2,434.6 4,730.9 1,250,2 Pakistan

Malaysia 60.2 55.4 161.9 277.9 596.8 624.7 589.3 322.2 450,8 Malaisie

New Zealand 197.5 135.2 135.4 228.6 1.6 81.5 60.2 2.1 - Wouvelle-ZelandeEgypt - 25.8 132.4 141.9 87.3 - - - 0.9 Egypte

Comoroe Islands 119.2 100.9 123.5 145.4 105.0 167.7 146.9 197.8 127,6 Comores

Algeria 182,9 288.5 118.4 52.2 2.7 72.9 125.1 165.0 85,4 Algerie

India 72.5 57.3 117.2 180.8 105.6 59.4 68.2 153.6 170,4 Inde

Canada 141.9 122.9 116.9 258.1 328.7 160.6 343.7 465.6 259.5 CanadaTunisia 22.3 57.5 105.3 153.7 1,027.9 0.1 72.4 - - TunisieThailand 854,1 79.7 88.9 1,611.3 2,088.0 111.2 88.1 214.5 37,0 Thailande

Cermany Democratic Rep. 31,8 8.0 77.1 149.0 43.0 51.1 277.0 247.1 194,1 Rep. Dem. Allemande

Spain 45.6 54.6 73.5 176.7 58.5 292.1 374.4 3,077.1 762,8 Espagne

Dennark 96.5 25.0 72.2 114.7 93.0 110.0 87.3 261,7 227.9 Danemark

Gabon 62.2 35.6 68.8 27.2 - - - - Gaboa

Indonesia 85,8 103.7 58.8 141.8 136.4 101.7 1.8 Indonesie

Australia 66.8 125.3 56.9 135.4 119.1 127.6 108,3 284.1 26,8 Australie

Bahrain 78.4 2.2 56.2 - - 247.8 56.9 - 0.7 Bara-i

Mozambique 13.6 - 47.3 29.7 209.0 618.3 804.7 1,605.0 1,778,5 Mozambique

Mauritiun, Redrig-ee, Diego Garcia 57.6 69,9 44.4 57.7 215.8 96.4 82.6 82.0 34,0 Maurice, Rodriguez, Diege Garcia

Austria 33,5 53.7 34.6 101.5 238.2 395.1 231.2 320.0 178,8 Autriche

-y Coast 95,5 165.1 23.2 24.7 2.1 37.2 265.3 1,383.5 2,4 Cote dA I-i.e

Reunion 37.7 92.1 7.5 - 31.1 332.4 33.0 124.3 235,1 La Reunion

Burma 389.4 15.5 4.2 - 0.7 298.8 1,442.8 1,918.1 877,9 Birmanie

South Vietnam 2.4 1.4 3.6 0.3 - 4.1 104.1 7.1 - Viet-Nan, Sud

Bra-il 161,1 0.4 0.4 10.5 274.9 1,431.2 - 386.4 201,7 Bresil

Senegal 44.6 21,7 0.3 0.8 - 0.7 - - 0,3 SenegalTanzania 0.1 96.7 0.1 0.1 12.8 19.4 254.7 416.1 7,7 TanzaniaSouth Africa 796.4 744.3 - - - - - 297.5 171,1 Afrique d. SudChina, Rep. of 182.7 60.3 - - 2,321.7 - - Chine, Rap. da

Paraguay 122.7 40.1 - - 47,2 58.0 413.8 378.3 35,9 Paraguay

Source- INSRE, Statistiaues du Comerce Exteri-ur de Madagascar n Negligible

Page 1 of 2

TABLE 4.1

EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31, 1980DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)

D E B T O U T S T A N D I N G I N A R R E A R STYPE OF CREDITOR -------------------------------- :

CREDITOR COUNTRY DISBURSED :UNDISBURSED: TOTAL : PRINCIPAL INTEREST

SUPPLIERS CREDITSBELGIUM 3,356 - 3.356 538 -

BERMUDA 2,835 1,105 3,940 283 103FRANCE 14,668 5,974 20,642 1,805 212GERMANY, FED.REP. OF 30,500 - 30,500 840 19ITALY 54,751 4,165 58,916 - 1,293JAPAN 12.561 - 12.561 217 157KUWAIT 85 - 85 - -NETHERLANDS 1,461 - 1,461 988 -SPAIN 26,327 - 26,327 867 451SWITZERLAND 1,157 - 1,157 - -

UNITED KINGDOM 7,252 1i,219 18,471 81 10UNITED STATES 547 - 547 91 29

TOTAL SUPPLIERS CREDITS 155,500 22,463 177,963 5,710 2,274

FINANCIAL INSTITUTIONSAUSTRIA 2.299 16,151 18,450 - -CANADA 4,000 - 4,000 - 582FRANCE 85,977 41,619 127,596 1,113 334GERMANY, FED.REP. OF 3,145 12,149 15,294 - 28ITALY 1,344 - 1.344 490 33JAPAN - 1,220 1,220 - -LIBERIA 591 - 591 74 33SWEDEN 4,240 5,760 10,000 - -SWITZERLAND 2,027 109 2,136 -UNITED KINGDOM 25,814 - 25,814 - 42UNITED STATES 39,513 2,262 41,775 288 118MULTIPLE LENDERS 66,012 - 66,012 - -

TOTAL FINANCIAL INSTITUTIONS 234,962 79,270 314,232 1,965 1,170

BONDSFRANCE 1,347 - 1,347 8 2

TOTAL BONDS 1,347 - 1,347 8 2

MULTILATERAL LOANSAFRICAN DEV. BANK - 14,858 14.858 -AFRICAN DEV. FUND 1,895 16,981 18,876 - -

BADEA/ABEDA 9,107 5,893 15,000 - -EUROPEAN DEV.FUND 2,062 - 2,062 40 10EUROPEAN INVEST BANK 2,122 887 3,009 - -IBRD 29,759 1,647 31,406 - -IDA 121,934 138,490 260,424 - -IFC 9,900 1,250 11,150 - -IMF 13,744 - 13,744 - -

TABLE 4.1 Page 2 of 2

EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31. 1980DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)

D E B T O U T S T A N D I N G : I N A R R E A R STYPE OF CREDITOR -------------------------:-----------------------

CREDITOR COUNTRY DISBURSED :UNDISBURSED: TOTAL PRINCIPAL INTEREST

IMF TRUST FUND 18,537 - 18,537 - -

INTL FUND ARG(IFAD) - 6,377 6,377 - -

OPEC SPECIAL FUND 16,113 3,287 19,400 - -

TOTAL MULTILATERAL LOANS 225,173 189,670 414,843 40 10

BILATERAL LOANSABU DHABI 1,959 2,399 4,358 - -

ALGERIA 60,000 - 60.000 -CANADA 19.265 16,299 35,564 - 281CHINA 30,881 47,239 78,120 1,163 -FRANCE 50,726 40,505 91,231 1,133 669GERMAN DEM. REP. 9,588 16,773 26,361 94 26GERMANY, FED.REP. OF 22,370 24,120 46,490 894 226HUNGARY 1,599 - 1,599 2 -IRAQ 49.336 - 49.336 - -ISRAEL 881 - 881 881 210JAPAN 54,832 3,571 58,403 - -KUWAIT 12,666 5,765 18,431 - -LIBYA 3,100 - 3,100 - -ROMANIA 394 - 394 - -

SAUDI ARABIA 7,961 4,791 12,752 - -SPAIN 21,551 19,605 41,156 908 280UNITED STATES 5,765 98 5,863 - -USSR 65,247 44,340 109,587 789 157

TOTAL BILATERAL LOANS 418,121 225,505 643,626 5,864 1,849

TOTAL EXTERNAL PUBLIC DEBT 1,035,103 516,908 1,552,011 13,587 5,305

NOTES: (l) ONLY DEBTS WITH AN ORIGINAL OR EXTENDED MATURITY OF OVER ONE YEAR ARE INCLUDED IN THIS TABLE.(2) DEBT OUTSTANDING INCLUDES PRINCIPAL IN ARREARS BUT EXCLUDES INTEREST IN ARREARS.

TABLE 4.2

SERVICE PAYMENTS, COMMITMENTS, DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT

PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31, 1980DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)TOTAL

YEAR DEBT OUTSTANDING AT T R A N S A C T I O N S D U R I N G P E R I O D OTHER CHANGESBEGINNING OF PERIOD

DISBURSED INCLUDING COMMIT- DISBURSE- S E R V I C E P A Y M E N T S CANCEL- ADJUST-

ONLY UNDISBURSED MENTS MENTS __ ----------- ----------- : LATIONS MENT *PRINCIPAL INTEREST TOTAL

: () (2) (3) (4) (5) (6) (7) (8) (9)

1973 90,617 151,227 55.581 30,039 8,877 3,280 12,157 1,534 11,4971974 120,249 207.894 42,526 25,156 6,327 3,511 9,838 327 6,062

1975 144,802 249,828 70,291 42,044 7,614 4.098 11,712 445 -7,570

1976 175,504 304,490 51,222 25,927 8,465 4,603 13,068 938 1,885

1977 192,081 348,194 101,788 53,957 8,852 5,453 14,305 3,077 18,389

1978 244,028 456,442 323,971 58,422 11,820 7,213 19,033 - 35,393

1979 307.552 803,986 490,645 335,068 18,022 16,259 34,281 214 5,817

1980 625,140 1,282,212 344,708 437,661 33,707 25,712 59,419 60 -41,141

1981 1,035,103 1,552,012

* * * * * * THE FOLLOWING FIGURES ARE PROJECTED * * * * * *

1981 1,035,103 1,552,012 - 204,346 107,491 63,511 171.002 - -15,678 s

1982 1,116,280 1,428,843 - 132,931 149,039 65,520 214,559 - -2

1983 1,100,168 1,279.802 - 82,976 154.958 56,158 211,116 - 6 11984 1,028,192 1,124,850 - 44,204 144,868 44,841 189,709 - 3

1985 927,528 979,985 - 26,875 110,457 34,997 145,454 - -3

1986 843,944 869,525 - 14,702 98,740 28,101 126,841 - 11987 759,906 770,786 - 7,409 83,624 22,337 105.961 - 5

1988 683,694 687,167 - 2,799 70,224 17,957 88,181 - -5

1989 616,265 616,938 - 610 60,917 14,389 75,306 - 21990 555,960 556,023 - 63 48,711 11,639 60,350 - -1

* THIS COLUMN SHOWS THE AMOUNT OF ARITHMETIC IMBALANCE IN THE AMOUNT OUTSTANDING INCLUDING UNDISBURSED FROM ONE

YEAR TO THE NEXT. THE MOST COMMON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER OF DEBTSFROM ONE CATEGORY TO ANOTHER IN THE TABLE.

- 74 -

Table 5.1: OVERALL GOVERNMENT OPERATIONS, 1975-79

(FMG Billion)

1975 1976 1977 1978 1979Provisional Est.

Budgetary revenue 53.7 67.5 84.5 80.9 94.6Recurrent budgetary expenditure -44.6 -63.7 -79.8 -89.5 -114.8Recurrent budgetary surplus or deficit (-) 9.1 3.8 4.7 -8.6 -20.2Budgetary capital expenditure -13.1 -19.3 -15.4 -18.6 -42.8FNUP receipts -- -- 11.8 18.1 19.5FNUP expenditure -- -- -2.3 -4.6 -10.3Of which: rice subsidies (-2.1) (-2.5) (-2.2)

Central bank expenditure for rice imports -4.1 -1.8 -3.6 -4.9 -7.4Special Treasury accounts (net) -2.5 5.9 -2.2 -2.0 -11.5

Total revenue 53.7 67.5 96.3 99.0 114.1Total expenditure -64.3 -78.9 -103.3 -119.6 -186.8

Capital -13.1 -19.3 -15.6 -20.7 -55.0 1/Recurrent -51.2 -59.6 -87.7 -98.9 -131.8

Of which: rice subsidies -4.1 -1.8 -5.7 -7.4 -9.6

Overall government deficit -10.6 -11.4 -7.0 -20.6 -72.7

Financing 10.6 11.4 7.0 20.6 72.7Foreign (net) 5.4 4.1 4.5 8.2 30.9Domestic (net) 5.2 7.3 2.5 12.4 41.8

Central Bank 6.3 8.9 7.6 18.5 42.4Of which: advances for rice imports (4.1) (1.8) (3.6) (4.9) (-7.4)

deposits of FNUP (-- ) (--) (-9.5) (-13.4) (-9.3)National banks -- -1.9 -0.8 -0.3 2.2Nonbanking system -0.2 -0.1 0.7 1.6 1.7Deferroed payments (net) 0.1 -0.3 -6.2 -7.1 -5.5Other -1.0 0.7 1.2 -0.3 1.0

1/ Includes FMG 9.7 billion for construction of the regional university centers.

Source: IMF/FMI

Table 5.2 TAX REVENUES, 1975-79(FMG millions)

1975 1976 1977 1978 1979 1980Budget

Direct taxes 7,052 7,381 10,766 15,058 15,100 25,275

T.U.T. ii 10,223 10,185 12,533 12,860 17,542 27,650of which: internal. 4,551 5,152 5,654 6,021 8,083 _

: imports 5,672 5,032 6,879 6,838 9,458 _

Customs revenues 21,016 20,534 29,382 32,750 39,135 59,379of which: import taxes and duties 14,367 15,095 20,008 19,944 28,275 45,060

* export taxes and duties 5,507 4,054 7,870 1 ,331 8,915 11,874 f

-4

Internal consumption tax 6,012 7,154 7,767 10,310 9,833 10,804 cn

Revenues from the RMMF 2/ 2,772 2,772. 3,461 4,343 5,615 6,100

Others 2,364 2,408 2,458 2,491 3.276 3,058

TOTAL 49,419 50,274 66,347 77,812 90,501 132,266

1/ Taxe Unique sur lea Transactions2/ Regie Malgache des Monopoles Fiscaux

Source: Ministry of Finance and Planning

Table 5.3 RECURRENT BUDGET EXPENDITURES-:(FMG billions)

1975 1976 1977 1978 1979 1980

Economic Classification Provisional Estimates Budget

Salaries and wages 29.2 37.7 35.6 48.2 59.2 71.7

Materials and supplies 7.9 8.3 7.9 12.3 14.4 17.9

Interest payments 2.4 2.5 1.8 1.9 2.2 3.1

Other 9.1 14.2 15.6 25.3 29.9 34.8

TOTAL 48.6 62.7 60.8 87.7 105.7 127.5

Functional Classification

Public administration 18.2 23.5 20.8 34.5 42.1 45.6

Economic services 8.0 10.8 10.2 13.4 15.2 12.4 -

of which: agriculture 4.0 5.3 6.1 7.1 8.4 6.0 O

public works 2.5 3.1 3.5 4.1 4.7 4.5 1

Social services 17.9 23.4 22.0 30.7 38.2 44.3of which: education 11.6 15.0 15.2 22.9 25.2 31.3

health 5.5 6.4 6.1 6.7 7.9 10.8

Other 4.5 5.0 7.8 9.1 10.2 25.1

1/ Data based on commitments (engagements) and not on Treasury records.

Sources: Ministry of Finance and Planning, IMF.

Table 5.4 BUDGETARY CAPITAL EXPENDITURESI{ 1975-80(FMG billions)

1975 1976 1977 1978 1979 1980

Provisional Estimates Budget

Functional Classification

Public administration 1.5 2.2 4.0 10.0 10.2 22.1

Economic services 8.8 14.8 13.5 17.7 28.7 45.8

of which: agriculture 3.3 5.8 5.9 6.4 13.9 19.4

: public works 4.0 6.9 5.6 11.1 13.7 24.6

Social services 0.9 2.3 3.0 5.4 10.8 11.7

of which: education 0.4 0.7 1.6 3.9 8.7 7.8

health 0.4 0.3 0.3 0.5 0.5 1.8

TOTAL 11.2 19.3 20.5 33.1 49.7 79.6

1/ Data based on commitments (engagements) and not on Treasury records

Sources: Ministry of Finance and Planning; IMF

- 78 -

Table 5.5 TREASURY BILLS, 1977-1980

(FMG millions)

1977 1978 1979 1980

June 30

Short Term (Bons du Tresor) a/

Ordinary bills

Outstanding at year's end 4,081 5,646 8,462 9,810

Drawings 1,802 3,127 3,361 2,298

Amortization 1,048 1,562 545 950

ForTrula billsC)utstanding at year's end 207 220 237 239

Drawings 24 26 23 1

Amortization 23 12 5

Long Term (Bons d'Equipement)(15 years at 6%. Issued 1973.)

Outstanding 4,064 4,064 4,064 4,064

a/ Up to two years

Source: Ministry of Finance and Planning

- 79 -

Table 5.6 SHARING OF DUES, FEES AND TAXES BETWEEN DECENTRALISED COLLECTIVITIES

CentralFaritany Fivondronana Firaisam Fokontany BudgMet

Authorized customary ciremonies _ _ 213 1/3Motorcycles, bicycles,

animal drawn catts, etc.. - - 100%Cattle movements 100%Dogs 50% 50%Transfer of property 100%Mineral waters 100%Publicity (posters and hoarding) 100%Automatic game or music machines in bars, 100%

restaurants, hotels and other public places 100%Night clubs, etc..Visiting and stamping (for meat):

lst case: Abattoir of FVP or FIR 100% or 100%(ex-urban communes)

2nd case: Slaughter in other FIR & FKT 50% 50%Feasta, shows, etc.:

Category l.-Cinemas, theatres, concerts 100%-Mobile cinemas 100%

Category 2. Authorised lotteries 100%Category 3 Sporting events Collectivity owning the land or FIR in which the event occurs

Water and electricity Collectivities concernedWater consumption (surtax) Collectivities concernedElectricity consumption (surtax) Collectivities concernedRoad traffic As in ordonance 78-009 of May 5, 1978Television sets 80%MMeat ( Art.ol 14 05)

1) Canning factories 100%2) Abattoirs belonging to FIV or FIR 100% or 100%

(ex urban commune)3) Other slaughter places 50% 50%

Registered motor vehicles 25% 25% 50%Non-salary incomes (from immovable property) 100%Professions/ 100%Land (ex urban commune) 100%Building a!/ 100% or 100%Supplementary tax buildings

Ex-urban communes 100% or 100%Other collectivities 25% 75%

Sales of drinks 15% 20% 252 40%Itinerant vendors 100%Gaming establishments 15% 20% 25% 40%Pin ball machines 100%

a! For ex-urban communes. For others the shares vary according to place, but usually 25% to Fivondronanaand 75% to Firaisam.

b/ No further information available

Source: Ministry of Finance and Planning

- 80 -Table 6.1 MONETARY SURVEY, 1975-1980

June June1975 1976 1977 1978 1979 1979 1980

ASSETS 106.0 116.6 143.5 167.7 203.8 197.0 241.7

Foreign Assets (net) 15.4 14.8 17.7 16.1 '27.4 2.0 -31.1

CentraL Bank (net) 8.4 8.4 8,6 7.9 -35.7 -4.7 -46.6

Foreign Assets 12.1 12.4 16.3 12.1 0.3 6.7 1.6Foreign LiabiLities 3.7 -4.0- 7.7 3.5 -20.7 -10.7 -24.5ExceptionaL LiabiLities - - - -0.7 -15.3 -0.7 -23.5

State Banks (net) 7.0 6.4 9.1 8.2 8.3 6.7 15.3

Foreign Assets 8.6 7.4 10.5 9.5 9.4 7.9 21.9Foreign Liabi Lities -1.6 -1.0 -1.4 -1.3 -1.1 -1.2 -6.6

Domestic Credit 90.6 101.8 124.8 150.6 219.0 183.2 261.3

A. Claims on Government 12.1 19.5 29.0 49.9 98.4 76.6 136.7

1. Central Bank (net) 12.2 21.2 28.8 47.3 87.4 68.8 128.0Claims on Government 18.7 28.6 46.9 79.9 131.7 106.7 167.3Government Deposits -6.5 -7.4 -18.1 -32.6 -44.3 -37.9 -39.3

2. State Banks (net) -1.7 -3.7 -4.4 -4.7 -2.5 -5.1 -4.5CLaims on Government 9.7 9.7 9.9 10.0 13.1 10.6 12.4PubLic Sector Deposits -i1.4 -13.4 -14.3 -14.3 -15.6 -15.7 -16.9

3. Other Claims (net) 1.6 2.0 4.6 7.3 13.5 12.9 13.2(Deposit in Bonds) -5.7 -5.3 -4.9 -5.1 -4.7 -4.5 -5.3Counterpart of Checking Deposits

at Post Office 2.0 2.2 2.4 3.0 3.9 3.8 3.7Treasury: Short-term Deposits 2.8 2.4 3.8 5.7 10.1 9.6 1n.1Cournterpart of Savings Institutions 2.5 2.7 3.3 3.7 4.2 4.0 4.7

B. CLaims on State and-Private Sector 78.5 87.3 95.8 100.7 120.6 106.6 124.6

Short-term 58.3 62.3 77.8 81.4 97.0 84.9 101.3Medium-term 8.7 8.6 8.7 9.7 13.0 12.1 12.9Long-term 5.8 6.1 4.4 4.5 5.9 5.1 5.1Treasury 5.7 5,3 4.9 5.1 4.7 4.5 5.3

Ontending - - 1.O 1.0 t2.2 t1.8 11.5

OnLending to the Government - - - - 2.4 0.5 2.4OnLending to State Enterprises - - 1.0: 1.0 9.8 11.3 9.1

LIABILITIES 106.0 116.6 143.5 167.7 203.8 197.0 241.7

Broad Money 86.8 100.2 122.0 143.0 181.1 162.5 194.7

Money 69.3 79.5 99.6 112.8 138.2 122.2 147.7

Currency outside Banks 34.0 35.3 41.6 48.2 53.5 46.5 56.2Demand Deposits 35.3 44.2 58.0 64.6 84.7 75.7 91.5

State Banks 30.5 39.6 51.8 55.9 70.7 62.3 77.7Deposits at Post Office 2.0 2.2 2.4 3.0 3.9 3.8 3.7Treasury: Demand Deposits 2.8 2.4 3.8 5.7 10.1 9.5 10.1

Quasi-money 17.5 20.7 22.4 30.2 42.9 40.3 47.0

Term Deposits 14.4 17.4 16.4 23.5 35.7 33.4 39.4Lonq-term Borrowing 0.6 0.6 2.7 3.0 3.0 2.9 2.9Deposits with the NationaL Savings Inst. 2.5 2.7 3.3 3.7 4.2 4.0 4.7

LONG-TERM FOREIGN BORROWING 3.4 2.8 2.3 2.0 2.9 2.3 6.6

FOREIGN BORROWING - 1.0 1.0 11.6 11.8 11.1

COUNTERPART fUNDS - - 0.9 1.1 0.8 0.8 0.8

OTHER ITEMS (net) 15.8 13.6 17.3 20.6 7.4 19.5 28.5

Interbank Credit - - 0.5 1.0 - 1.3

C+) Credit from CentraL Bank 18.9 12.0 12.9 9.3 8.9 7.1 3.5(-) CLaims on Banks -18.9 -12.0 -12.4 -8.3 -8.9 -5.8 -3.5

Money Market (net) (0.2) (0.2) (0.7) (-) (-) (-) (-)Short-term CLaims (15.9) (8.8) (8.6) (4.2) (3.9) (3.1) (1.0)rledium-term CLaims (2.8) (3.0) (3.1) (4.1) (5.0) (2.7) (2.5)

CapitaL Acrounts t1.2 16.8 18.2 18.8 21.7 20.7 24.1

CentraL Bank 5.8 6.0 5.7 5.3 6.3 6.2 7.2of which: ALLocation of SDR (2.2) (2.2) (2.2) (2.2) (3.2) (3.2) (4.2'

Deposits with State Banks 5.4 10.8 12.5 13.5 15.4 14.5 16.9

Other items (net) i.& --. z -1.4 0.8 -14.3 -2.5 4.4

Source: Central Bank of Madagascar

Tabl-e 6.2: DISTRIBUTION OF CREDIT BY ECONOMIC ACTIVITY

RE~PARTITION DE CREDITS PAR BRANCHE D'ACT-IVITE ECONOMIQUE

(Credit outstanding at end of the year/en cours en fin d'ann'ee)

Apri L Apri L Apri L Apri L

1975' 1976'- -1977,~ 197B.... 1979, 1 979...1980 1975 -- 1976'' 1977- ''1978 '' 1979 ' 1979 18

SHORT-TERM CREDIT (FMG biLlion/en miL Li a-rds de FM-G) (Percent/Pourcentage) CREDIT A COURT TERME

AgricuLture 11.6 12.1 15.2 12.1 13.1 8.9 13.8 19.6 19.6 24.3 17.2 14.4 12.3 14.0 AgricuLture

Industry 21.0 23.2 23.1 30.9 42 2 35.2 45.0 35-05 37.5 36.9 43.8 46.3 48.8 45.5 Industrie

mining 0.3 0.1 0.2 0.9 1.4 1.1 1.5 0.5 0.6 0.3 1.3 1.5 1.5 1.5 Mine

Manufacturing ~~~~20.2 22.5 22.2 28.7 39.0 33.1 41.9 34.2 36.4 35.5 40.7 42.8 45.9 42.4 Idsre auatre

Construction and o.5 0.3 0.7 1.3 1.8 1.0 1.6 0.8 0.5 1.1 1.8 2.0 1.4 1.6 B8timents et travaux

pubLic works pubLics

Commerce 15.1 15.4 14.5 15-.4 17.3 13.3 16.2 25.6 24.9 23.1 21 -8 19.0 18.4 16.4 Commerce

Other 1.0 1.6 1.3 3.2 5.2 4.1 7.2 1 7 2.6 2 ;1 4.5 5'.7 52 7 7. 3 Autres

TotaL Short-Term 48 7 52;-3 54A. 61,.6 77.8 61;5 82.2 82 4 84;-6 86.4 87.S 85-.4 85.2 83.2 Credit -a court terme, totaL

MEDIUM-TERM CREDIT CREDIT A MOYEN TERME

AgricuLture 1.1 1.1 0.4 0.4 0-.4 0.4 0.7 1.9 1.8 0.6 0.,6 0.4 0.6 0.7 AgricuLture

Industry 4.6 4.0 4-.6 5.8 6.7 6.1 8.9 7.8 6.5 7.4 8.2 7.3 8.4 9.0 Industrie

Mining 0.4 0.3 0.3 0.4 0.4 0.3 0.4 0.7 0.5 0.5 0.6 0.4 0.4 0.4 Mine

Manufacturinq 3.4 3.0 3.7 4.8 5.9 5.2 8.2 5.7 4.9 5.9 6.8 6.5 7.2 8.3 Industries manufacturees'

Construction and 0.8 0.7 0.6 0.6 0.4 0.6 0.3 1.4 1.1 1.0 0.8 0.4 0.8 0.3 Bgtiments et travaux

pubLic works pubLics

Commerce 0.5 0.4 0.2 0.3 1.4 1.5 1.5 0.8 0.6 0.3 0.4 1.6 2.1 1.5 Commerce

Other '0.6 '0.4 '0.8 02 ' 1 .6"' '08 ''1.6 ''1.0 ''0.7 1.3 1'.0 "1 .8 "1. '.1.7 Autre,s

Total Medium-Term 6.8 5.9 6~0 7-.2 10.1 8.8 12.7 ¶1.5 9.6 9.6 10.2 11.1 12'.2 12-.9 Credit moyen terme, totaL

… -

LONG-TERM CREDIT CREDIT A LONG TERME

Agriculture 0.6 0.6 '- .0.1 0.5 0.1 0.5 1'.0 1.0 "- .1 0.5 0.1 0.5 AgricuLture

Industry 2.0 2.1 1.6 1.1 1.9 1.1 2.2 3.4 3'.4 2.6 1t6 2.1 1'.5 2.2 Industrie

Mining .0.4 0.3 0.3 - - - - 0.7 0.5 0.5 - - - - Mine

Manufacturing 1.6 1.8 1.3 1.1 1.9 1.1 2.2 2.7 2.9 2.1 1.6 2.1 1.5 2.2 Industries manufacturees

Construction and - - - - - - - - - - - - - - B'atiments et travaux

pubLic works pubLics

Commerce 0.1 0.1 '' 0.1 0.3 0.2 0.3 0.2 0.1 - 0.1 0.4 0.3 0).3 Commerce

Other _'.9 "0.8 "". '.5 ''0.5 "' 0 .5 "0.9 ''1.5 "1.3 '"_1.4 "0 .7 "'.5 "0.7 "'. Autres

Total Long-Term '"3.6 "'3.6 "'22- ' 1.8 '"3.2 ''1. 3.9 6.1 5.8 4.0 225 3.5 2.6 3.9 Credit -a Long terme, totaL

TOTAL NON-REGULATED 59.1 61-.8 62.6 70.6 91.1 72.2 98.8 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source: CentraL Bank of Madagascar/Banque CentraLe de Madagascar

- 82 -

Table 6.3: INTEREST RATE STRUCTURE

(In per cent per annum)

Effective- . Nov. 17, Oct. 1, Feb. 1,

1969 1974 1981

Central Bank ratesRediscount of:Short-term paper 5.50 8.00Export bills 4.00 7.00Bills secured by productsunder contract withstabilization funds 4.75 8.00

Medium-term paper 3.75 5.00 8.00Long-term paper 1/ -- 6.00 9.00

Advances 6.50-8.50 6.50-8.00 9.50-11.00

Commercial bank rates oncredit operations 2/Credit secured by:Commercial paper 6.75-8.00 10.5-11.00Governiment contract 6.75-8.50 10.5-11.00Stocks of coffee 6.75-7.25 ) 9.0-10.00Stocks of other crops 7.125-9.25 )Stocks of other merchandise 8.00-9.25 ) 11.5-13.00

Overdrafts 8.00-9.25 )

Commercial banks rates on deposits Minimum deposit(thousands of FMG)

Sight depositsPrivate sector -- 0.75 1.00Public sector -- 3.00 3.50Insurance companies -- 3.00 3.50

Time depositsAt least 2 months 75,000 4.90 5.75At least 3 months 50,000 4.75 5.50From 6 to 12 months 500 4.60 4.75 6.00From 1 to 2 years 300 5.15 5.65 6.75From 2 to 2-1/2 years 300 6.15 6.80 8.00

Certificates of depositFrom 6 months to 1 year 500 3.60 3.70 4.75From 1 to 2 years 50 4.00 4.25 5.25From 2 tC) 3 years 50 4.75 5.30 6.25From 3 to 4 years 50 5.10 5.80 6.75From 4 to 5 years 50 5.30 6.80 7.75From 5 to 6 years 50 5.50 7.50 8.50

Rates on Treasury bondsCategory A 3/1 year bond 3.50 5.75

Category B1 year bond 4.00 6.252 year bond 4.75 7.253 year bond 4.75 7.504 year bond 4.75 8.505 year bond 4.75 9.25

Source: Central Bank of Madagascar.

1/ Rediscounting of long-term paper was introduced in August 1974.2/ Refers to credit that is rediscountable with the Central Bank; nonrediscountable credit

bears, on the average, a rate that is 0.75 to 2.00 percentage points higher.31 Holders are also eligible to participate in a special lottery.

Table 6.4: INTERNATIONAL LIQUIDITY, 1975-1980LIQUIDITE INTERNATIONALE, 1975-1980

(US$ million/en millions de $EU)

1975 1976 1977 1978 1979 1980

International reserves (minus gold) 35.6 42.2 68.9 59.2 5.0 - Reserves internationales(moins or)

SDRs 1.1 2.2 8.3 11.3 - - DTSForeign exchange 34.5 40.0 60.6 47.9 5.0 - Devises

IMF position Position au FMI

-Use of IMF credit 16.7 16.6 19.0 17.5 13.0 54.7 -Recours au credit de FMIof which: dont:

Credit Tranche - - 11.5 9.7 5.8 13.0 Tranches de creditCompensatory - - - - 37.2 Financements compensatoires XOil facility 16.7 16.6 7.6 7.2 6.5 4.3 Facilites petrolieres

-Quota 30.4 30.2 31.6 44.3 44.8 65.1 -QuOte-part-Trust Fund loan outstanding - - - 14.0 14.2 32.3 -Fonds fiduciaire (en cours)

Source: IMF/FMI, International Financial- Statistics

Table 7.1: CROP PRODUCTION, 1972-1979PRODUCTION AGRICOLE, 1972-1979

(in tons/en tonnes)

1972 1973 1974 1975 1976 1977 1978 1979

Cereals CerealesPaddy 1 923 600 1 913 300 2 013 440 1 972 100 2 042 500 2 154 130 1 913 540 2 057 000 PaddyMaize 105 800 107 870 118 090 119 675 136 045 121 965 114 645 131 000 MatsSorgho 3 195 610 1 750 2 305 180 300 530 .. Sorgho

Pulses L8gumineusesBeans 34 825 35 675 33 800 36 680 41 165 34 695 36 675 46 860 HaricotsLima beans 28 330 18 120 23 920 23 515 18 825 14 900 8 065 8 600 Pois du capOther pulses (Antaka and Voanemba) 2 690 1 880 3 340 6 070 5 560 1 935 3 710 .. Autres lggumineuses

Roots and Tubers Tubercules et racinesPotatoes 134 495 117 100 115 920 171 630 133 545 147 565 181 000 215 300 Pommes de terreCassava 1 212 680 1 174 790 1 264 175 1 309 335 1 389 665 1 412 220 1 594 450 1 726 250 ManiocSweet potatoes 311 625 246 355 267 370 279 300 472 300 388 445 324 960 355 000 Patates doucesTaro 79 050 86 050 76 900 85 250 84 110 56 950 72 210 .. Saonjo (taro)

Industrial and Export Crops Cultures IndustriellesSugar cane 896 150 1 041 250 1 317 200 1 377 545 1 267 178 1 280 715 1 374 930 1 431 570 Canne a sucreGroundnuts 49 250 38 060 40 040 41 790 54 195 46 580 34 015 43 450 ArachidesTobacco 5 340 5 940 3 610 4 255 3 967 3 117 3 097 4 100 TabacCotton 25 370 30 629 33 342 30 728 34 731 37 081 33 080 32 000 CotonCoffee (green) 68 585 73 880 80 980 83 560 78 930 68 380 78 200 81 070 Cafe (vert)Cocoa 1 240 1 200 1 560 1 380 1 557 1 202 1 250 1 350 CacaoPepper 2 445 2 520 2 820 2 950 4 860 2 865 2 300 2 400 poivreVanilla (dry) 1 900 1 775 1 380 1 825 1 555 1 000 325 575 Vanille (seche)Cloves 5 810 4 305 17 815 4 500 12 930 10 900 11 900 18 520 Girofle (clous)Tung oil seeds 2 145 2 000 1 770 550 1 530 1 660 1 095 co AleuritesSisal 29 500 30 900 29 980 21 000 25 425 26 290 15 920 18 000 Sisal

Vegetables LegumesGreen beans 1 460 1 870 710 1 740 1 580 1 454 1 627 1 675 Haricots vertsCarrots 7 220 8 125 8 325 2 785 3 500 3 589 3 478 3.661 CarottesTurnips 1 050 980 1 055 200 130 191 192 202 NavetsOnions 4 265 4 125 5 500 2 085 6 890 4 300 4 523 4 711 OignonsCauliflower 1 190 1 050 1 080 688 463 480 530 605 Choux fleursTomatoes 12 010 11 875 11 205 2 818 2 870 3 896 3 748 3 678 TomatesCucumbers 772 1 055 1 375 607 615 518 510 528 ConcombresCabbages 1 080 1 160 1 390 6 215 5 390 6 853 6 721 6 456 ChouxWater cress 270 270 370 275 135 236 231 231 Cressons

Fruits FruitsBananas 245 930 300 010 324 900 436 555 350 690 267 270 240 070 242 740 BananesCitrus fruits 66 810 80 475 90 610 81 400 64 615 78 385 79 745 83 440 AgrumesPineapples 47 650 51 230 53 8On 73 865 38 535 43 380 45 745 50 795 AnanasPeaches and plums 10 435 11 145 10 880 4 860 6 470 11 790 12 680 13 370 Peches et prunesApricots 320 330 330 220 335 385 485 510 AbricotsApples and pears 6 425 5 350 6 295 4 500 2 880 4 185 4 545 4 590 Pommes et poiresGrapes 3 000 2 665 3 290 2 515 4 580 4 830 4 060 5 555 Vignes (raisins)Lychee 47 650 58 340 31 760 37 875 23 625 16 845 28 580 25 335 Letchis

Forestry Produces Produits forgstiersRaffin 10 555 10 620 9 425 12 375 7 320 7 745 7 365 .. RaphiaPaka 660 1 440 410 520 110 385 265 ,, Paka

= Not available/Non disponible

1/ Provisional/Provisoire

Source: Ministare du D6veloppement Rural et de la Reforme Agraire

Table 7.2: PRODUCER PRICES OF SELECTED AGRICULTURAL PRODUCTS, 1972-1981

PRIX A LA PRODUCTION DES PRODUITS AGRICOLES, 1972-1981

(FMG/kg)

1972 1973 1974 1975 1976 1977 1978 1979 1980 1981

Paddy- 15.0 15.0 25.0 30.0 30.0 35.0 35.0 39.0 43.0 47.0 Paddy"

Vanilla 220.0 220.0 240.0 240.0 250.0 280.0 305.0 500.0 600.0 700.0 Vanille (verte)

(Green)

Coffee 135.0 135.0 165.0 165.0 165.0 180.0 183.0 185.0 215.0 250.0 Cafe

Cloves 280.0 280.0 320.0 320.0 320.0 340.0 340.0 385.0 395.0 430.0 Girofle (clous)

Pepper 150.0 150.0 175.0 175.0 180.0 190.0 195.0 200.0 225.0 245.0 Poivre

Sisal 31.0 59.6 74.3 70.0 65.0 74.0 74.0 83.5 .. .. Sisal

Tobacco 121.0 119.0 126.0 140.0 140.0 160.0 160.0 160.0 . . Tabac

Cotton2/ 58.0 60.0 68.0 78.0 78.0 80.0 80.0 85.8 88.0 102.0 Coton 2/

3/ 3

Cassava- 3.4 3.4 4.0 6.0 6.0 6.0 6.0 6.0 .. .. Manioc (brut)3/ -

Groundnuts 28.0 29.0 35.0 41.0 41.0 45.0 48.0 51.0 55.0 65.0 Arachides

Lima beans 30.0 35.0 37.0 38.0 40.0 45.0 48.0 55.0 65.0 75.0 Pois du Cap

1/ Estimated average producer prices in the highland area/Prix mayen (estime) a la production sur les Hauts-Plateaux

2/ Estimated average prices in Acala/Prix moyen estime, Acala

3/ For industrial use in Lake Alaotra/Manioc destine au traitement industriel dans la region du Lac Alaotra

Source: Central Bank, Monthly Bulletin/Banque Centrale, Bulletin Mensuel de Statistiques

= not available/non disponible

Table 7.3: SALT WATER FISHING: MARKETED CATCH, -/ 1972-1978PRODUITS DE MER COMMERCIALISES!V, 1972-1978

(in tons/en tonnes)

1972 1973 1974 1975 1976 1977 1978

Fish 8 483 11 042 14 538 6 788 4 345 4 233 4 892 Poissons

Shrimps 3 236 8 010 5 647 5 288 4 306 5 274 5 332 Crevettes

Crabs 141 122 240 326 574 558 674 Crabes

Crayfish 46 35 119 79 112 108 66 Langoustes0'

Other - 185 980 467 206 148 224 369 Divers

TOTAL 12 091 20 189 21 011 12 687 9 485 10 397 11 333 TOTAL

1/ Fresh, frozen, dried, salted, smoked/Frais congeles, seches, sa1es, Fu.S

2/ Oysters, mussels, octopi, turtles, etc./Huitres, moules, poulpes, tortues, etc.

Note: Data cover products sold in the domestic market and exported /Produits vendus dans les marcheslocaux et produits exportes

Source: Ministare du D6veloppement Rural et de la Reforme Agraire.

Table 7.4: IMPORTS OF INPUTS FOR AGRICULTURE, 1972-1979IMPORTATIONS DIES PRODUITS A L'AGRICULTURE, 1972-1979

(Value c.i.f. in FMG million)

(Valeur c.a.f. en millions de FMG)

1972 1973 1974 1975 1976 1977 1978 1979 1980

(8 mths/8 mois)Fertilizer, total 137.0 348.0 404.8 838.6 558.6 480.4 1892.3 1003.9 728.5 Engrais, total

Nitrogen 9.6 65.7 155.0 221.3 88.0 75.7 1241.0 292.3 270,1 Engrais azotes

Phosphate 10.5 15.1 23.5 241.6 120.0 90.9 114.1 35.6 81,1 Engrais phosphatesPotash 49.4 51.0 90.5 157.1 69.0 49.1 123.8 144.6 46,9 Engrais potassiques

Other, including guano 2.5 8.7 22.9 142.7 222.7 137.6 145.0 252.8 14.0 Autres engrais, y compris guanoCompounds 65.1 207.4 112.9 75.9 58.9 127.1 268.4 278.6 316,4 Engrais composes

Insecticides 200.7 289.2 425.1 560.0 967.5 894.7 789.5 1512.0 768.1 Insecticides

Herbicides and fungicides 46.4 45.6 96.6 84.6 145.1 44.0 123.7 84.5 58.7 Herbicides et fongicides X

Rat poisons, etc. 4.3 3.6 13.5 4.4 15,4 4.5 8.2 14.6 5,4 Antirongeurs

Motorplows 2.6 1.8 32.9 10.3 11.8 8.9 12.8 10.8 2.1 Motoculteurs

Tractors (wheel) 175.9 100.2 331.0 660.1 320.2 346.3 701.8 1039.0 554.31 Tracteurs (a roues)

Machinery 152.3 121.1 147.8 377.2 229.0 121.6 364.4 762.1 172,9 Machinerie

Plows 32.0 15.4 47.1 106.4 129.3 70.3 131.2 468.6 67,4 Charrues

Threshing and harvesting Batteuses et autres machinesmachines 52.2 69.1 22.3 126.9 28.5 21.8 96.0 172.2 71,5 pour la recolte

Others 68.1 36.6 78.4 143.9 71.2 29.5 137.2 121.3 34.0 Autres

Hand tools 105.2 87.6 53.6 42.3 60.0 58.3 77.0 81.2 37,4 Outils agricoles a main

Source: INSRE, Statistique du Commerce Exterieur de Madagascar

Table 7.5: IMPORTS OF INPUTS FOR AGRICULTURE, 1972-1979IMPORTATIONS DES PRODUITS DESTINES A L'AGRICULTURE, 1972-1979

(Quantity in metric tons)

(Quantites en tonnes)

1972 1973 1974 1975 1976 1977 1978 1979 1980

(8 mths/8 mois)

Fertilizer, total 7787 15460 12760 16826 14103 12022 24303 19313 11,987 Engrais, total

Nitrogen 516 3782 4737 4256 2105 2516 8623 6212 4,647 Engrais azotes

Phosphates 453 666 705 4543 3374 2276 3548 585 1,153 Engrais phosphates

Potash 3812 2790 3989 3783 1782 1410 3864 3193 951 Engrais potassiques f

Other, including guano 119 386 474 2905 5770 2936 3036 4249 199 Autres engrais, y compris guano X

Compounds 2887 7835 2856 1339 1072 2884 5232 5074 5,037 Engrais composes X

Insecticides 914 1178 1210 1202 1143 1477 1048 2524 743 Insecticides

Herbicides and fungicides 93 94 144 84 178 49 122 106 75 Herbicides et fongicides

Rat poisons, etc. 6 4 19 3 11 4 3 6 5 Antirongeurs

Motorplows 12 7 115 35 31 39 9 9 1 Motoculteurs

Tractors (wheel) 169 105 211 294 140 159 761 1790 930 Tracteurs (a roues)

Source: INSRE, Statistiques du Commerce Exterieur de Madagascar

Table 8.1: INDUSTRIAL PRODUCTION, 1972-1979PRODUCTION INDUSTRIELLE, 1972-1979

(Quantities/Quantite's)

UnitsUnitEs 1972 1973 1974 1975 1976 1977 1978 1979 1980

Food processing and Industries Alimsentsltes et

beverages boissons

Sugar tons/tonnes 103 806 99 175 114 985 114 513 107 346 109 409 115 624 109 293 109 037 Sucre

Tapioca 2 001 2 895 2 239 2 064 2 562 2 028 1 965 2 061 1 541 Tapioca

Starch " 2 041 892 1 793 2 151 481 933 728 783 1 388 Fecule

Edible ofls" 6 137 6 847 4 611 5 645 5 816 5 929 4 425 3 817 3 985 Huiles alimentaires

Beer hi 120 770 138 468 182 825 211 851 256 964 273 500 257 037 283 819 318 166 Bibre

Milk, concentrate tons/tonnes 1 668 4 238 4 525 3 974 3 876 4 764 5 414 5 949 4 854 Lait concentrt sucrt

Beef, processed 11 514 11 014 7 784 5 029 4 053 7 624 1 231 3 281 . Boeuf prtpar6

Pork, processed 599 487 211 171 260 745 507 .. - Porc pr6parE

Tobacco industry Industrie du tabac

Cigarettes tons/tonnes 1 092 1 317 1 294 1 248 1 439 1 804 1 983 2 014 1 983 Cigarettes

Smoking tobacco 209 229 177 153 208 158 153 126 162 Tabac a fumer

Chewing tobacco 1 869 1 811 1 861 1 971 1 956 1 836 2 123 2 121 2 042 Tabac a msacher

Textile industry _______________I r

Cotton fabrics '000 m 65 618 66 029 80 617 77 685 78 129 79 488 78 184 83 289 79 176 Tissue de moron

sacks tons/tonnes 3 563 3 720 4 434 4 167 4 471 3 082 2 815 3 268 3 418 Sacs d'emballageBlankets " 1 399 1 513 1 302 1 505 1 518 1 773 1 800 2 006 2 082 Couvertures

Sisal products 756 786 929 584 807 623 705 705 710 Ficelles, cordages, tapia en sisal

Leather industry Industria de cuirdc

Shoes '000 pairs/'000 paires 2 597 2 492 2 609 2 236 2 305 2 201 2 584 3 196 3 027 Industried

Paper indostry IndPulp tons/tonnes 6 205 8 385 10 390 10 622 9 053 11 498 12 636 13 057 12 115 Papier brutPaper ' 5 137 5 469 6 628 6 773 7 399 8 217 8 927 9 120 8 360 Papier transfout

Chmical industry ndustrie iueSoap 12 344 12 546 12 998 16 819 14 424 16 634 16 585 19 294 17 989 SavonaCandles 3 012 3 734 3 787 3 067 3 470 4081 4 308 4 554 4556 BougiesMatches '000 boxes/'OO0 boites 62 993 53 900 53 816 51 233 48 788 62 714 68 949 53 705 45 978 Allumettes

Paint tons/tonnes 2 611 2 320 2 487 2 448 3 111 3 119 3 699 3 802 4 250 Peinture

Petroleum ref ining Raffinage_d rroleButane m3 19 192 20 335 18 673 16 611 12 910 9 354 7 487 7 005 8 877 ButaneMotor spirits " 162 795 190 422 181 749 163 446 125 705 131 337 93 629 76 010 119 491 Essences

Kerosene 77 910 98 309 99 320 109 544 76 570 67 560 42 834 43 731 60 966 KErostne

Gas oil . 189 859 216 863 201 065 226 252 175 773 145 044 102 038 79 881 147 905 Gas-oil

Fuel oil " 201 208 240 320 231 254 313 989 223 838 225 608 168 599 183 050 252 586 Fuel-oil

Other Autres industries

Cement tons/tonnes 64 177 69 863 61 447 58 021 69 904 52 229 66 044 63 052 60 050 Ciment

Corrugated sheet metal " 8 435 9 018 11 461 4 734 3 122 6 086 9 301 15 412 11 504 T81es ondul8es

Nails 1 087 1 484 1 448 736 322 565 842 835 941 Potntes

Batteries no. 26 231 26 301 29 533 25 277 24 853 27 207 26 693 20 561 16 406 Accumulateurs

. not available/non disponible

Source: INSRE

Table 8.2: MINERAL PRODUCTION, 1972-1979PRODUCTION MINIERE, 1972-1979

UnitUnitg 1972 1973 1974 1975 1976 1977 1978 1979 1980

Gold g 5 815 2 168 2 418 4 926 1 537 2 357 3 943 1 379 Or

Chromite tons/tonnes 111 770 157 714 155 874 194 127 211 426 164 781 119 283 128 347 146 529 Chromite

Graphite " 18 154 13 963 17 280 17 774 17 402 15 706 16 036 14 241 9 906 Graphite

Mica . 398 890 857 1 914 81 1 498 1 566 1 168 Mica

Beryllium (industrial) kg 9 261 2 478 12 844 .. 17 281 13 780 11 106 5 336 Beryl (industriel)

Quartz (piezo-electro) " 2 084 410 367 254 89 116 75 52 Quartz (piezo-electro)

Quartz (ornamentation) " 7 751 851 3 417 1 023 373 487 799 1 406 Quartz (ornementation)

Quartz (other) " 152 810 17 048 105 460 227 111 107 467 183 482 232 594 158 801 Quartz (autre)

Grenat (clockwork) 3 666 9 010 6 301 1 511 I 876 3 130 617 1 829 Grenat (pivoterie)

Grenat (industrial) " 49 775 2 596 2 776 1 751 4 281 1 716 10 511 1 252 Grenat (industriel)

Tourmaline " 4 722 7 549 1 236 2 599 568 1 568 916 923 Tourmaline

Citrine " 10 22 20 147 18 47 7 Citrine

Jasper * 270 514 34 349 11 647 1 730 8 850 10 217 2 930 Jaspe

= Not available/Non disponible

Source: Service des Mines

Table 8.3: ELECTRICITY PRODUCTION AND CONSUMPTION, 1972-1979 1/PRODUCTION ET CONSOMMATION D'ELECTRICITE, 1972-1979 1/

Production Consumption/Consommation 2/Thermal/ of which Antananarivo/ Production Index/ Consumption Index/

Total Hydro Thermique Total dont Tananarive Indice de la production Indice de la consommation('000 kwh per annum) ('0O0 kwh) (1978 = 100) (1978 - 100)

Year (000 kwh par an)

1972 213 380 142 093 71 287 191 595 82 272 ' 6 78

1973 221 049 163 166 57 883 202 189 82 275 lu8 83

1974 237 903 156 467 81 430 218 337 77 780 184 89

1975 259 376 173 882 85 494 192 969 77 650 92 79

1976 260 511 172 163 88 348 228 954 82 485 92 93

1977 271 264 181 145 90 119 235 783 86 444 96 96

1978 282 309 115 642 166 667 245 043 88 852 100 100

1979 312 164 117 588 194 576 278 958 97 473 111 114

1980 335 683 147 570 188 113 295 558 101 587 119 121

1/ Data cover only the operations controlled by JIRAMA, the state-owned utility holding, and exclude electricity generated byvarious small operators and the auto-generation and consumption of industrial enterprises. Established in 1975, JIRAMAcontrols the operations of the former EEM (private) and SEM (semi-public)./Les donnges ne couvrent que des operationscontrolees par Jirama, la socifte d'Etat pour l'energie, et ne comprennent ni l'6lectricitg produite par des petites usines,ni l'auto-production des entreprises industrielles. Etablie en 1975, Jirama controle les operations des deux anciennesentreprises, EEM (privge) et SEM (semi-publique).

2/ High & Low-voltage/Haute & Basse-tension

Source: INSRE

Table 8.4: INDUSTRIAL PRODUCTION INDICES, 1972-1979INDICES DE LA PRODUCTION INDUSTRIELLE, 1972-1979

Weights/ (1978 100)Coeff. dePonderation 1972 1973 1974 1975 1976 1977 1978 1979

Industry Industries

Mining 3.88 85 170 120 157 149 132 100 103 Industries extractives

Food and beverage 31.60 97 89 95 91 93 94 100 98 Industries alimentaires

Tobacco 5.35 73 78 77 78 84 89 100 100 Industrie du tabac

Textiles 26.34 85 85 104 97 100 101 100 106 Industrie textile

Clothing 7.39 97 97 101 105 98 99 100 103 Article d'habillement

Wood 1.20 110 92 85 69 72 99 100 95 Industrie du bois

Paper 4.03 49 66 82 84 72 91 100 103 Industrie du papier

Printing 2.49 110 115 118 91 100 103 100 99 Imprimerie

Leather 2.17 65 78 100 71 74 89 100 114 Industrie du cuir

Rubber 0.53 69 76 90 97 102 98 100 123 Industrie du caoutchouc

Chemicals 8.08 65 70 74 79 86 93 100 106 Industrie chimique

Petroleum refining 2.61 156 184 175 198 148 14( 100 94 Raffinage du petroleConstruction materials 3.01 204 149 138 109 91 89 100 94 Materiaux de construction

Transport equipment 1.32 137 114 106 108 104 104 100 98 Materiel de transport to

Ceneral Index 100.00 93 92 100 97 96 99 100 102 Indice ggneral

Electricity Electricite

Production index 100 76 78 84 92 92 96 100 111 Indice de production

Ilydro 41 123 141 135 15( 149 157 100 102 Hydro

Thermal 59 43 35 49 51 53 54 300 117 Thermique

Consumption index 78 83 89 79 93 96 100 114 Indice de consomsation

(Hligh-voltage) (Hlaute tension)

Note: These indices are based on INSRE's regular surveys of larje enterprises and do not necessarily re resent the entire branch or subsectorLl des branches.

Ces indices sont baseg sur lea enquetes periodiques de lI NsRE aupres des grandes entreprises et ge represenLen pas neacessairement ca totalate

Sources: INSRE and mission calculation/INSRE et calcul de la mission.

Table 8.3: ELECTRICITY PRODUCTION AND CONSUMPTION, 1972-1979 1/PRODUCTION ET CONSOMMATION D'ELECTRICITE, 1972-1979 1/

Production Consumption/Consommation 2/Thermal/ of which Antananarivo/ Production Index/ Consumption Index/

Total Hydro Thermique Total dont Tananarive Indice de la production Indice de la consommation('000 kwh per annum) ('000 kwh) (1978 = 100) (1978 - 100)

Year (000 kwh par an)

1972 213 380 142 093 71 287 191 595 82 272 I6 78

1973 221 049 163 166 57 883 202 189 82 275 lag 83

1974 237 903 156 467 81 430 218 337 77 780 154 89

1975 259 376 173 882 85 494 192 969 77 650 92 79

1976 260 511 172 163 88 348 228 954 82 485 92 93

1977 271 264 181 145 90 119 235 783 86 444 96 96

1978 282 309 115 642 166 667 245 043 88 852 100 100

1979 312 164 117 588 194 576 278 958 97 473 111 114

1980 335 683 147 570 188 113 295 558 101 587 119 121

1/ Data cover only the operations controlled by JIRAMA, the state-owned utility holding, and exclude electricity generated byvarious small operators and the auto-generation and consumption of industrial enterprises. Established in 1975, JIRAMAcontrols the operations of the former EEM (private) and SEM (semi-public)./Les donnges ne couvrent que des op6rationscontr6lees par Jirama, la societe d'Etat pour l'nergie, et ne comprennent ni l1'lectricit6 produite par des petites usines,ni l'auto-production des entreprises industrielles. Etablie en 1975, Jirama contr6le les omgrations des deux anciennesentreprises, EEM (privge) et SEM (semi-publique).

2/ High & Low-voltage/Haute & Basse-tension

Source: INSRE

Table 8.4: INDUSTRIAL PRODUCTION INDICES, 1972-1979INDICES DE LA PRODUCTION INDUSTRIELLE, 1972-1979

Weights/ (1978 = 100)

Coeff. dePonderation 1972 1973 1974 1975 1976 1977 1978 1979

Industry Industries

Mining 3.88 85 170 120 157 149 132 100 103 Industries extractivesFood and beverage 31.60 97 89 95 91 93 94 100 98 Industries alimentairesTobacco 5.35 73 78 77 78 84 89 100 100 Industrie du tabacTextiles 26.34 85 85 104 97 100 101 100 106 Industrie textileClothing 7.39 97 97 101 105 98 99 100 103 Article d'habillementWood 1.20 ]10 92 85 69 72 99 100 95 Industrie du bois

Paper 4.03 49 66 82 84 72 91 100 103 Industrie du papier

Printing 2.49 110 115 118 91 100 103 100 99 ImprimerieLeather 2.17 65 78 100 71 74 89 100 114 Industrie du cuir

Rubber 0.53 69 76 90 97 102 98 100 123 Industrie du caoutchoucChemicals 8.08 65 70 74 79 86 93 100 106 Industrie chimiquePetroleum refining 2.61 156 184 175 198 148 14( 100 94 Raffinage du petroleConstruction materials 3.01 204 149 138 109 91 89 10() 94 Materiaux de construction

Transport equipment 1.32 137 114 106 108 104 104 100 98 Materiel de transport l

General Index 10().00 93 92 100 97 96 99 100 102 Indice g4neral

Electricity Electricite

Production index 100 76 78 84 92 92 96 100 IIl Indice de productionIlydro 41 123 141 135 150 149 157 100 102 Hydro

Thermal 59 43 35 49 51 53 54 100 117 Thermique

Consumption index 78 83 89 79 93 96 100 114 Indice de consommation(Iligh-voltage) (llaute tension)

Note: These indices are based on INSRE's regular squrveys of la 5 ge enterp rises and do not necessarily re resent the entire branch or subs ctor e

Ces indices sont bases sur les enquetes periodiques de I NSRE aupr4s des grandes entreprises et e repr senteni pas n cessaarement Ia totalite des branches.

Sources: INSRE and mission calculation/INSRE et calcul de la mission.

TABLE 8.5: SELECTED INDICATORS OF RAIL TRANSPORT, 1972-1979

INDICATEURS DE TRANSPORT FERROVIAIRE, 1972-1979

Freight - Passengers/ Receipts from (FMG million)/

Fr^t 1/ Passagers Recettes de (million de FMG)

Year/ '000 tons/ Million ton-km/i in thousands! Million passengers-kmi/ Freight 1/ Passengers/

Annee Milliers de tonnes Millions de tonne-km en milliers Million de passagers-km Fret 1/ Passagers

1972 894 214 2695 192 2449 468

1973 878 215 3069 209 2068 516

1974 828 217 3746 254 2184 630

1975 878 214 3841 249 2406 629

1976 871 209 4421 293 2036 771

1977 880 220 4105 277 2256 875

1978 860 219 4251 296 2239 944

1979 738 198 4187 304 2401 1126

1/ excluding passengers' baggage/non-compris bagages des passagers

Source: INSRE and General Directorate of Planning/INSRE et Direction generale du Plan

- 94 -

Table 8.6: AIR TRANSPORT, 1972-1979TRANSPORT AERIEN, 1972-1979

Local/Interieur InternationalYear/ Freight/Fret Passengers Freight/Fret 1/ Passengers/Ann6e (Tons)/(Tonnes) Passagers (Tons)/(Tonnes) Passagers 2/

('000) ('000)

1972 3568 137 5147 93

1973 4114 158 6069 90

1974 4871 171 5870 89

1975 4606 156 4486 67

1976 4893 207 4087 76

1977 4778 238 4594 94

1978 4642 382 4523 87

1979 4773 341 5462 98

1980 ... ... 6380 100

1/ Freight loaded and unloaded/Fret embarque et d6barqu6

2/ Passengers arriving and departing; excluding transit passengers/Passagersembarques et debarques; non-compris passagers en transit

Soirce: INSRE

... Not available/Non disponible

Table 8.7: MARITIME FREIGHT TRAFFIC BY PORT, / 1972-1979

TRAFIC MARITIME DES MARCHANDISES PAR PORT, -/ 1972-1979

(in thousand metric tons/en milliers de tonnes)

1972 1973 1974 1975 1976 1977 1978 1979 1980

Tamatave 1472 1607 1684 1827 1458 1381 1244 1358 1336

Majunga 304 318 310 317 281 340 353 426 386

Diego-Suarez 100 122 109 105 114 112 207 157 227

Tulear 56 79 76 90 89 90 84 79 97

Nossi-Be and Port St. Louis 181 177 154 157 158 149 158 144 175

Manakara 78 71 62 67 74 61 81 75 62

Fort Dauphin 46 57 51 55 38 44 40 40 36

Morondava 15 12 22 43 26 15 17 17 21

Mananjary 16 21 19 18 15 17 10 15 29

Morombe 29 26 19 21 17 14 15 10 8

Analalava and Antsohihy 27 24 16 19 47 24 42 71 59

Other ports/Autres ports 48 54 47 60 48 40 40 43

Total 2372 2568 2569 2779 2365 2287 2291 2435 2486

o/w coastal traffic 2//dont cabotage (652) (760) (803) (774) (812) (750) (748) (912) (948)

1/ Freight loaded and unloaded/Frgt embarque at debarqug

2/ including some traffic with Mauritius, R6union, and the Comoros/y compris une partie du trafic avec l'Ile

Maurice, La Reunion et les Comores

Source: INSRE

- 96 -

Table 8.8: MOTOR FUEL CONSUMPTION, 1972-1979CONSOMMATION DE CARBURANT, 1972-1979

(Million liters/Million litres)

Gasoline Diesel Total

1972 112 159 271

1973 116 164 280

1974 113 176 289

1975 1ll 170 281

1976 107 117 224

1977 110 151 261

1978 117 159 276

1979 116 181 297

1980 111 183 294

Source: INSRE

Table 8.9 EDUCATIONAL INDICATORSEFFECTIFS SCOLAIRES

1972 1973 1974 1975 1976 1977 1978I/ 1979I/

I. Primary E,ucation I. Enseignement primaire

Enrollments 1,004,700 1,030,400 1,038,00n 1,133,000 1,209,841 1,329,5P1 1,398,936 1,426,158 Effectifs

Public 743,900 765,600 824,000 867,600 927,899 1,132,585 1,222,590 1,237,329 Public

Private 260,800 265,00o 214,000 265,400 281,942 1q6,925 176,346 188,829 Prive

Pupil/Teacher ratio 68 62 63 61 57 49 44 .. Coefficients Eleves/Enseignants

Public 80 73 73 69 59 53 47 .. Public

Private 45 43 41 44 49 33 31 .. Prive'

II. General Secondary Education II. Enseimnement secondaire (gReual)

Enrollments 105.300 2 ,0 131900 1162 164,699 181,571 .. Effectifs

Public 35,000 47,600 57,100 67,200 78,954 95,592 117,810 163,565 Publi.c

Private 70,300 45,300 57,400 64,700 72,208 69,107 63,761 .. Prive

Pupil/Teacher ratio 21 - 28 26 .. .. .. .. Coefficients Eleves/Enseignants

Public 22 32 26 30 ., ., .. Public

Private 20 - 30 23 .. .. .. .. Prive

III. Technical Secondary EducationL2 III. Enseienement seconMAre 2tech.)

Enrollments 8,40n 7,40n 6,60n 7,4 8,633 2 10,178 10,698 Effectifs

IV. Higher E'urntion IV. Enseignement superieur

Enroltments 5,500 6,son s.400 9,8 11,042 l7,727 19,684 29,000 Ettectlts

Number of teaching staff 206 150 16/ 162 *- 409 571- .. Nombre personnel enseignant

Student/Teacher ratio 27 43 57 51 .. 34 34 .. Coefficient Etudiants/Profes-

seurs

I/ Provisional/Resultats provisoires.

2/ Public vocational and technical Training Schools. After 1973, some vocational schools merged with the first cycle secondary schools/Ecoles d'apprentissage a

vocation publique et technique. Apres 1973, quelques ecoles vocationelles ont ete' incorporees au premier cycle de l'enseignement secondaire.

3/ Of which 411 Malasasy teachers/Soit 411 enseignants nationaux.

Sources: General Directorate of Planning/Direction Generale du Plan.

Ministry of Secondary and Primary Education/MINESEB

Ministry of Higher Educatton/MESUPRES

Table 8.10: ZE1LI HS978CENTRES DE SANTE PUB3LIQUE ET MTDECINS, 1978

Antananarivo Pianarantsoag Toamasina Toliary Mahajenga Antsirana Total

Physicians 257 (149) 72 (20) 61 (22) 60 (9) 58 (18) 39 (13) 547 (731) MedecinsPharmacists 6 (46) 2 (7) 1 (5) 2 (5) 2 (2) 1 (17) 14 (72) PharmaciensDentists 5 (32) 1 - 1 1 3 (1) 11 (33) Peentistes

Health care centers Centres de sant6General hospital 2 - - - - - 2 Hidpital g6neralProvincial hospital - I 1 1 1 1 5 H8pitaux provinciauxMedical-surgical hospital 2 (2) 2 2 3 tl) - 2 11 (3) H6pital m6dico-chirurgicalSecondayy hospital 14 13 (1) 12 (1) 6 8 (1) 5 (2) 58 (5) H6pitaux secondaiTesMedical centers 23 18 11 18 19 8 97 Centres m6dicauxSanitary centers 90 69 76 45 46 20 346 Postes sanitairesHealth rooms 36 13 6 26 27 35 143 Postes d'infirmiersMaternity centers 9 30 5 15 18 9 86 Postes d'arcouheementPrimary health care centers 56 98 95 93 93 41 476 Centre de soin de sante prlaaire '0

Speoialized medical centers 8 (3) 2 (2) 2 (2) 1 (2) 4 (2) 4 (2) 21 (13) 116pitaux specialisesTlrban dispensary 13 4 2 6 - 2 27 Dispensaire urbain

Maternal and child health 4 6 6 6 5 2 29 Sante maternelle et infantSleSchool sanitary inspection 2 1 1 1 1 1 7 Inspection sanitaire scolaireSanitary mobile group 5 5 5 3 5 2 25 Equipe sanitaire mobileMunicipal. hygiene office 2 1 1 1 1 2 8 Bureau municipal d'hygiPneSocial hygiene institute I - I - I - 3 Tnstitut d'hygiPne social

et polyclinique

Population per hospital bed 443 755 993 713 687 503 617 Population par lit hospitaii4r

Note: In parenthesis: Medical staff and clinics in private sectorEntre paranthPse: Personnel et centres de santt dans le secteur prive

Source: Ministry of health, Annual Report, 1978Mlnistere de la Sante, Rapport Annuel, 1978

Table 9.1: COST OF LIVING INDICES IN ANTANANARIVO. 1972-1980

INDICES DES PRIX A LA CONSOMMATION A TANANARIVE. 1972-1980

(Annual averages/Moyennes annuelles; 1978 = 100oo

Traditional Households Modern Households Composite Index

Menages Traditionnels Menages Modernes Indice Compose

General Food General Food General Food

General Alimentation General Alimentation General Alimentation

1972 61.8 58.2 60.2 56.7 61.3 57.7

1973 65.7 63.5 61.5 59.4 64.5 65.6

1974 80.1 82.7 69.6 68.7 76.9 79.7

1975 86.7 88.3 77.4 78.2 84.2 86.1

1976 91.4 91.6 85.4 85.1 89.8 90.2

1977 93.8 92.9 92.9 93.2 93.6 93.0

1978 100.0 100.0 100.0 100.0 100.0 100.0

1979 114.1 114.5 110.9 111.2 113.2 113.8

1980 (Jan-March/ (126.2) (124.6) (120.5) (121.5) (124.7) (123.9)

Janvier-mars)1980 134.8 135.8 125.8 128.01981 (Jan-April/ (163,2) (168,3) (145.8) (152,7)

Janv-Avril)

L Rebased/RebaseSource: INSRE and mission estimates/INSRE et estimations de la mission.

Table 9.2: WHOLESALE PRICES FOR SELECTED COMMODITIES IN ANTANANARIVO, 1972-1979PRIX DE GROS (MAGASIN) A TANANARIVE. 1972-1979

Annual Averages/Movenne annuelleFMG per: 1972 1973 1974 1975 1976 1977 1978 1979 1980FMG par:

Wheat flour 100 kg 5,303 5,645 7,355 7,355 7,355 7,355 7,355 7,355 7,623 Farine de fromentMilk concentrate, sweet 48 boxes 3,780 3,728 4,061 5,124 5,661 5,661 5,661 6,114 6,303 Lait concentre sucre 0Table wine, red (11.50) hl 10,500 11,767 14,083 19,367 20,500 20,663 23,150 24,967 30,533 Vin ordinaire, rouge (11,5Aperitif ("Dubonnet") 12 bottles 10,531 13,228 18,458 21,192 .. 24,868 ... 24,756 .. . Aperitif (Dubonnet)Cognac ("Martell") 12 bottles 22,200 30,844 38,376 51,154 56,215 58,080 59,664 ... 78,000 Cognac (Martell)

Household soap (local) 100 kg 10,637 12,147 17,959 19,843 19,492 19,265 19,518 20,083 21,231 Savon de m'enage (local)Cotton tissue, unbleached(local) 100 m 5,900 6,108 7,400 8,292 11,717 12,000 12,758 13,300 13,300 Tis9u de coton ecru (local)Cotton tissue, printed(local) 100 m 10,500 10,875 13,567 15,392 18,250 18,700 19,458 20,000 20,000 Tissu de coton imprime (local)Cotton blanket, 150x200 cm(local) piece 654 650 650 663 770 814 855 948 1,105 Couverture de coton l5Ox200cm local

Steel bars, round (0 10-12) 100 kg 7,565 7,631 10,607 13,902 12,053 12,525 13,835 16,169 21,477 Lamines ronds (10/12) CSheet metal, non-galvanized 100 kg 10,943 10,890 15,368 17,393 12,784 17,033 16,598 19,421 ... Toles noiresGalvanized sheet metal, flat Tole galvanisee plane(200 x 100 x 0.1 cm) piece 1,962 1,967 2,137 2,765 2,720 3,000 3,242 3,428 4,296 (200 x 100 x 0,1 cm)

Galvanized sheet metal, Tole galvanisd'e onduleecorrugated 7/10 (200x9Ocm) piece 1,092 1,139 1,374 1,512 1,820 1,793 1,610 1,698 1,927 7/10 (200 x 90 cm)

Cement, local (Amboanio) ton 14,100 14,189 14,704 .. 20,870 20,870 .. 21,200 21,200 Ciment local (Amboanio)Cement, imported (French) t2n 14,760 15,443 17,244 19,756 22,162 ... ... 21,200 21,200 Ciment,importe (Frangais)Window glass (60 x 100 cm) m2 752 802 1,376 1,653 1,525 2,777 2,721 ... 4,020 Verre a vitre (60 x 100 cm)Plywood (6 mm) m 632 727 880 1,460 1,607 1,617 .. .. ... Contre plaque (6 mm)Electric wire, insulated Fil electrique isole (10/12)(10/12) loom 1,200 1,200 1,919 2,690 . 2,813 2,729 2,698

Light bulbs, standard (100 W) 100 6,133 5,938 9,814 14,683 14,700 .. 13,926 ... ... Lampe incandescente standard 100 wPrinting paper (local) 100 kg 14,140 14,092 15,257 16,643 17,628 17,790 17,736 20,519 21,747 Papier imprimerie (local)Cardboard, for bookcovers 100 kg 13,362 12,984 .. .. .. 25,694 23,380 26,275 25,462 Carton reliure

, Discontinued in the market/Discontinuite sur le marche"not available/Non disponible

Note: Price quotations do not include turnover tax (taxe unique de transaction)/Prix non compris la taxe unique de TransactionSource: INSRE