Exports

Last year, the U.S government suspended Madagascar from the African Growth and Opportunity Act that allowed it to export textiles to the United States duty free. This caused many factories to close and unemployment to rise.

But some businesses have prospered.

The head of Madagascar’s largest textile company, Cotona’s Salim Ismail, said his company, which was 80 per cent reliant on AGOA exports to the U.S, had been able to grow by diversifying to European markets.

He thinks that Madagascar’s reputation for quality garments could help the industry to bounce back.

"Look at Bangladesh; overpopulated, limited resources, meteorological cataclysm,” Ismail said. “These people have, within 20 years, pulled out of poverty about 3 million people. They have raised their export to $10 billion yearly."

Experts said that most large oil and mining companies were used to dealing with instability and would continue to seek out Madagascar’s vast natural wealth, but smaller companies would think twice before dealing with an unrecognized government.

The head of the Madagascar’s Industry Trade Group, Hery Ranaivosoa, thinks Madagascar’s agriculture and manufacturing potential could also make it a major exporter to Europe, China and major regional markets such as South Africa.

He said Madagascar had the same farming capacity as Kenya, and if factories were set up then a ready workforce could make it a major manufacturer too.