Madagascar wins $2.4bn aid

Reuters 27.07.2002

By Brian Love

PARIS - Madagascar won pledges of $2.3 billion in foreign aid on Friday to fight poverty and malnutrition and help return it to its feet after six months of conflict that left President Marc Ravalomanana in power.

The promises of low-cost loans and grants over the next four years came from the World Bank, the 15-nation European Union and countries including former colonial ruler France, the United States and Japan.

"A page has been turned," Madagascan Prime Minister Jacques Sylla told a news conference at the World Bank's office in Paris after meeting donor nations and agencies.

Sylla said his government needed $1.5 billion to $2.0 billion by year-end just to ensure sufficient supplies of food and jobs after the prolonged dispute over the presidency.

"The costs are enormous," he said.

The fight for power in the Indian Ocean island pitted self-made millionaire Ravalomanana against the veteran leader Didier Ratsiraka, who resisted surrendering power after a December election until he left for France earlier in July.

Sylla said that he and the government team who made the case for aid in Paris could not yet say how much the six months of strife had cost one of the poorest countries in the world.

Other officials at the news conference said half of the aid pledged would come from the World Bank and the EU's executive body, the Brussels-based European Commission.

France offered aid to the tune of $150 million and another $100 million was committed by the United States, they said.

In all, 17 countries and 19 organisations attended the talks in Paris, according to a statement from the World Bank.

Apart from Mauritius and Senegal, there was scant attendance by other countries from Africa, where Ravalomanana's rule over an island the size of the Spain and Portugal combined has yet to secure any full-scale recognition.

The African Union, inaugurated only this month to bring stability and fight corruption on the continent, refused to recognise Ravalomanana as Madagascar's president, in what analysts said was a sign the continent's old guard of rulers fear similar bids to topple them from power.

Sylla said he had presented to donor nations a recovery plan tackling poverty and malnutrition first and then legal and judicial reform, followed by private sector development.

Sylla offered no specifics when asked if he could justify recent pay rises for ministers and civil servants -- estimated by observers to be tenfold hikes -- when much of the population of 16 million was in near or total poverty.

Ravalomanana has said the pay rises are designed to help end corruption. Sylla said the government wanted more effective tax collection. "As far as we're concerned it's feasible," he said.