VZCZCXRO1100
RR RUEHLMC
DE RUEHAN #0238 0681333
ZNR UUUUU ZZH
R 091333Z MAR 07
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC 4459
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS ANTANANARIVO 000238 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/E 
DEPT PLEASE PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PGOV PHUM PREL KISL MA
SUBJECT: AMBASSDOR'S MEETINGS WITH MAHAJANGA BUSINESS LEADERS 
 
REF: Antananarivo 0236 
 
¶1.  During American Week in Mahajanga (reftel), the Ambassador met 
with business and Muslim leaders to discuss the overall business 
climate and to listen to their concerns. Prevailing sentiment among 
business leaders was generally negative.  They voiced complaints 
about the poor state of the Port of Mahajanga and its continuing 
inability to accommodate large, ocean-going vessels due to silting 
and poor maintenance; ineffective customs administration; unstable 
electricity supply; the uncertain security status of their 
investments; inadequacy of the human resource pool due to poor 
schools; lack of proper medical services; and shortages of water. 
 
¶2.  A factory manager producing for Polo and exporting to the United 
States under the African Growth and Opportunity Act (AGOA) said he 
often ships his goods across Madagascar to export via Tamatave 
because Mahajanga's facility is inadequate.  He added that frequent 
electricity cuts in Mahajanga in the middle of product runs impact 
quality control and lead to waste. 
 
¶3.  A businesswoman from a prominent family expressed concern over 
the security of her investments because she is part of the "karana' 
(Indo-Pakistani origin Muslim) minority.  She runs a soap factory in 
Mahajanga and her family is in many businesses in Madagascar; and 
yet they always fear they are at risk.  Last year, she said her 
brother had to leave Madagascar quickly under "questionable 
circumstances," which hurt the family business.  The long-running 
failure of the Malagasy government to grant citizenship to people in 
her family's situation is an impediment to them expanding their 
business. 
 
¶4.  The USAID Director met separately with a businessman whose 
company, Bio Energy Invest, aims to produce diesel from jatropha, a 
local plant. Working with D1, a British firm that specializes in 
bio-energy, Bio Energy Invest has already demonstrated the 
feasibility of running a vehicle on diesel made from jatropha oil. 
Its major hurdle is getting approval from the GOM to purchase the 
land on which the Bio Energy Invest president wants to grow the 
jatropha. He noted that his request has languished in the Ministry 
of Energy for several months now without a reply. 
 
Meeting Muslim Religious Leaders 
-------------------------------- 
 
¶5.  Answering the Ambassador's question, the spokesman for the 
Muslim leaders group said they had seen no changes of any kind 
following the recent presidential elections.  Their biggest 
preoccupation was personal insecurity due to lack of citizenship and 
the absence of safeguards or protections for their investments. The 
spokesman confirmed that Muslims of Indian or Pakistani origin found 
it difficult to get Malagasy citizenship despite family members 
having lived in Madagascar for up to five generations.  The group 
asked the Ambassador to intervene with government on their behalf. 
The Ambassador said that when he had raised the issue with the 
President before the presidential election in December 2006, the 
President had responded that he would take up this issue after the 
election because it was too politically controversial. The group 
added that some of them would be willing to invest more or could 
interest other investors in coming to invest in Madagascar, were 
this bar to citizenship removed. 
 
¶6.  Members of the group were particularly chagrined that the GOM's 
policy of not granting citizenship to long-term residents included 
those among them who were married to Malagasy citizens.  The group 
spokesman expressed strong interest in learning English and 
requested the USG's help in finding a teacher. The Ambassador 
promised to look into the possibility of getting two Peace Corps 
volunteers to come to teach English but he informed the group that 
they would have to provide the classrooms. 
 
¶7.  COMMENT: In spite of the difficulties of doing business in 
Mahajanga, these business people continue to soldier on because they 
can still make a profit. However, because of the enormous obstacles, 
it is doubtful that these companies would invest in Madagascar if 
they had to do it all over again.  The added problems for Muslim 
businesspeople, even those who have lived in Madagascar for 
generations, hinder economic investment.  The Muslim minority is a 
special case, but if their substantial capital were unleashed, it 
would have a major benefit on investment. 
 
¶8.  COMMENT CONTINUED:  The Muslim leaders look to the GOM for 
long-desired acceptance.  Interestingly, Malagasy Muslims are openly 
critical of these "foreign" Indo-Pakistani origin leaders for not 
being inclusive, even at Islamic holidays.  The Embassy will 
continue to cast a wide net in its outreach activities, seeking to 
bridge the divide within the Muslim community and between it and the 
rest of Malagasy society.  END COMMENT. 
 
MCGEE