Madagascar Economy
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The Republic of Madagascar is an archipelago of islands. The main island is also called Madagascar, which is the fourth largest island in the world. The island is home to almost 5% of the world’s total plants and animals. More than 80% of these species are indigenous to Madagascar. According to the 2009 estimates, the population of this island nation exceeds 20 million. The country has a mixed geography. The coastal line moves interior towards central highlands, which are mainly rainforests. Agriculture is the primary revenue source for Madagascar’s economy. However, almost two-thirds of the population survives below the international poverty line. The official currency of Madagascar is the Malagasy Ariary.[br]
Madagascar Economy: Introduction
Since the 1990s, Madagascar’s economy has seen gradual progress due to the IMF and World Bank triggered economic reforms. These reforms are targeted towards creating a favourable business environment through liberalization and structural correction. A majority of the population is engaged in agriculture, animal rearing and forestry. The industrial sector includes textile mills and processing units for agricultural products. Export of agricultural output accounts for almost 70% of the total budget revenues.
Gradually, the mining industry is evolving in the nation. In 2008, Madagascar’s mining corporation began mineral extraction, although there have been protests from international NGOs to stop mining activities in the region due to the harmful impact on indigenous culture. The oil and gas sector is also developing in the nation.
According to the 2009 estimates, Madagascar has an annual GDP of US$20.51 billion. GDP per capita (purchasing power parity) stands at US$1,000.
Madagascar Economy: Major Statistics[br]
Here are some of the major statistics of Madagascar’s economy:
|
Labour force |
9.504 million (2007) |
|
Inflation rate |
8% (2009 est.) |
|
Budget revenues |
$1.232 billion (2009 est.) |
|
Budget expenditures |
$1.861 billion (2009 est.) |
|
Industrial production growth rate |
5.5% (2009 est.) |
|
Current account balance |
-$1.003 billion (2009 est.) |
|
Exports |
$1.04 billion (2009 est.) |
|
Imports |
$1.836 billion (2009 est.) |
|
Foreign exchange reserve |
$798 million (31 December 2009 est.) |
|
External debt |
$2.054 billion (31 December 2009 est.) |
Poverty is the biggest challenge to Madagascar’s economy. In 2004, the IMF and World Bank enrolled Madagascar in the special program under the HIPC initiative (heavily-indebted poor countries). Since 2009, the country has been facing political instability, which is an impediment to economic growth.
