Country Listing

Madagascar Table of Contents


National Accounts and Budget

Economists note that Madagascar's economy severely deteriorated from the 1960s to the late 1980s, particularly as a result of the misguided economic policies of the Ratsiraka regime. Whereas the growth rate in the gross domestic product (GDP--see Glossary) rose at an average of 2.9 percent in real terms during the 1960s, during the 1970s and the early 1980s this figure declined to 0.2 percent, compared with 2.6 percent population growth. Real GDP rebounded in the latter half of the 1980s, reaching a high of 4 percent in 1989. In the 1980s, GDP increased at 1.1 percent per year and at 1 percent in 1992, but the economic output was unable to keep pace with population growth. This is seen in Madagascar's economic ranking relative to other countries. In terms of gross national product (GNP--see Glossary) per capita, for example, the country declined from a World Bank ranking of the thirtieth poorest country in the world in 1979 (GNP per capita of US$290) to the tenth poorest in 1991 (GNP per capita of US$210).

Going beyond the traditional indicators of GDP and GNP per capita, however, Madagascar is doing better than might be thought. For example, according to the Human Development Report published by the United Nations Development Programme (UNDP) in 1993, Madagascar ranked 128th in the world (and seventeenth in Africa) in terms of "human development." This category represents a composite score of several indicators of development, such as life expectancy and literacy. The UNDP report further notes that, despite a slight drop in the early 1990s, Madagascar's human development steadily advanced during the decades of the 1970s and the 1980s.

The Zafy regime tried to balance the need for economic growth with a desire to enhance social welfare after the turbulent transition period of the early 1990s by putting together a Public Investment Program for 1994-96. The priorities of the US$326 million budget are clearly demonstrated by the breakdown of investments according to four broad categories: infrastructure (US$160 million--49 percent), with transportation receiving the largest share of US$87 million; producing sector (US$79 million-- 24 percent), with US$53.5 million of this devoted to agriculture; social assistance, including education, health care, and social assistance (US$52.2 million--16 percent); and public administration (US$32.4 million--10 percent). An overriding interest in development as opposed to security is clearly demonstrated by the relatively small amount of investment funds (US$2 million--0.6 percent) allocated to the Malagasy Armed Forces. Finally, the percentage of investment funds slated for each of the individual regions suggests an awareness of the need to favor those that historically have been neglected. The breakdown of investments by region in order of importance is as follows: Antsiranana (28 percent), Toliara (21 percent), Mahajanga (18 percent), Toamasina (15 percent), Antananarivo (10 percent), and Fianarantsoa (9 percent).

Data as of August 1994