Madagascar To Spend $110M US Aid On Land Reform
Date: 16-Mar-05
Country: MADAGASCAR
Author: Tim Cocks
The US said on Monday it planned to give Madagascar $110 million over four years in the first grant from The Millennium Challenge Account, a development fund for poor nations that undertake political and economic reforms.
The huge Indian Ocean island is one of the world's poorest countries, with three quarters of people living on less than a dollar a day.
Though warm, wet and fertile, it produces barely enough to feed its 17 million people, most of whom are subsistence farmers. Aid agencies say child malnutrition is amongst the worst in Africa and yields of the staple crop, rice, are lower than Mali, a country on the edge of the Sahara desert.
Interior Minister Jean Andre Soja said on Tuesday that 13 people have died and nearly 9,000 left homeless after several weeks of heavy flooding. A government assessment also found 32,000 hectares of rice fields, the staple food, completely flooded. [nL15708960]
"A good portion of the money will go on land titling and financial reform," grant coordinator Emma Ralijohn, told Reuters.
Ralijohn said lack of clarity on land rights was the main obstacle to investment by farmers.
"There are people who have had land for generations, but they have no paper to say it's their land, so there's no incentive to invest. Someone could come and take your investment away."
Ralijohn said the government saw reforming land rights as the first step in rural Madagascar's transition from a subsistence to a market economy.
"There will be higher productivity and growth if people can feel secure," she said.
Ralijohn said financial reform would enable farmers to get access to credit and buy fertiliser and agricultural inputs.
"We have microfinance projects and are working on strengthening the national savings bank to open up all over Madagascar," she said.
President Marc Ravalomanana, who swept to power in 2002 after an 8-month sporadically violent standoff over a disputed election, has promised to end rural poverty by reforming the economy and attracting foreign investment.
Madagascar's economy grew 5.3 percent in 2004 with much of it seen in urban areas. The world bank says greater efforts are needed to give Madagascar's rural areas access to urban markets.