But recently a SADC mediation team changed tack and proposed that Mr. Rajoelina, 36, be recognized to head another interim government until elections can be held later this year.

The proposal bans ousted President Marc Ravalomanana from returning to the country until a governing authority sees fit and he faces arrest and a life prison sentence for murder. But the former president claims the convictions are not recognized internationally and says he will return to participate in talks as Madagascar’s democratically elected President.

Political reforms

The President of Madagascar’s South African Chamber of Commerce, Ray Ferguson, said that the whole political system needed to be reformed to clear out corruption, nepotism and abuse of the legal system before any foreign investor confidence would be restored.

"Blatant corruption, filling their pockets, that is the biggest disaster facing Madagascar,” said Ferguson. “Out of control, no checks and balances, the [justice] Tribunal, the courts don’t work. Without legal law and order the new politicians will come in and fill their pockets just as in the past have done. There is no future without law."

The Vice President of Madagascar’s largest trade group, Noro Andriamamonjiarison, agreed that state intervention was damaging the private sector.

She says she worries about what businesses will do this year, as many have already used cost cutting measures and their own reserves to survive, and there is still no end in sight to the crisis. She says that attracting investors back to Madagascar will be difficult until the government stops changing the rules for doing business.