VZCZCXRO9908
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHAN #0723/01 2041301
ZNR UUUUU ZZH
R 231301Z JUL 07
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC 0102
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 03 ANTANANARIVO 000723 
 
SIPDIS 
 
DEPT FOR G/TIP - RYOUSEY AND ALEMAR 
DEPT FOR INL - EFLOOD 
DEPT FOR AF/E - MBEYZEROV AND RMEYERS 
DEPT FOR AF/RSA 
 
SIPDIS 
 
E.O.  12958:  N/A 
TAGS: PHUM KCRM SMIG ELAB EAID MA
SUBJECT:  PROSPECTS AND PROSTITUTION IN MINING BOOM TOWN 
 
REF: A) ANTANANARIVO 557 B) ANTANANARIVO 161 
 
¶1. SUMMARY:  As Qit Madagascar Minerals (QMM) ramps up its mining 
activities in southeastern Madagascar, the former "ghost town" of 
Fort Dauphin is rapidly changing.  Embassy staff consulted local 
officials and NGOs to assess the potential for human trafficking. 
While it is clear "trafficking in persons" is not yet a part of the 
public discourse or a significant problem, a number of related 
economic and social issues were evident.  The influx of money and 
infrastructure development is accelerating activity throughout the 
economy promising job creation in the long-term, but its immediate 
effects include rising inflation and migration pressure.  The 
variables for increased trafficking are evident as residents are 
forced to find alternative means of making ends meet; Post will 
continue to monitor this dynamic situation as extraction-related 
infrastructure comes online in 2009, bringing with it mobile workers 
with money.  END SUMMARY. 
 
SETTING THE SCENE 
- - - - - - - - - 
 
¶2.  Madagascar's third major tourist hub, the city of Fort Dauphin 
in the region of Anosy boasts approximately 550,000 inhabitants. 
The struggling regional economy depends heavily on cassava, rice, 
and sisal cultivation, but droughts coupled with flooding render 
much of the area famine-prone.  The result is cyclical patterns of 
poverty and migration and some of the poorest health indicators in 
the country.  The percentage of the regional population living below 
the poverty line is 82 percent, considerably worse than the 
IMF-estimated national average of 69 percent.  Eighty percent of 
road networks are impassable most of the year, which contributes to 
economic and social isolation and impairs access to health services 
and markets.  A biodiversity hotspot, Anosy's high population growth 
and overwhelming poverty have contributed to serious environmental 
degradation.  The National HIV prevalence rate is still thankfully 
low at 0.95 percent, although Madagascar has some of the highest 
rates of sexually transmitted infections (STI) in sub-Saharan 
Africa.  In Fort Dauphin, the 2005 surveillance showed a 7 percent 
syphilis rate among pregnant women. 
 
QMM's ARRIVAL 
- - - - - - - 
 
¶3.  QMM, a Malagasy subsidiary of the Quebec-based Rio Tinto group, 
arrived in Fort Dauphin some 20 years ago seeking to mine ilmenite, 
an ore used to produce titanium dioxide, primarily for use in paint. 
 For most of the intervening period global supply and demand kept 
prices low and QMM chose to leave this massive resource unexploited. 
 After conducting numerous social and environmental impact 
assessments, QMM finally launched its construction phase in January 
2006; extraction will start in 2009.  QMM's infusion of hundreds of 
millions of dollars into road systems and the second largest deep 
water port in the region has accelerated activity throughout the 
economy, prompting a surge in demand for accommodation, restaurants, 
local products, and even automated banking services.  The long-term 
benefits and potential for job creation are indisputable, yet a 
number of social and economic problems are rapidly becoming 
evident. 
 
THE IMMEDIATE IMPACT 
- - - - - - - - - - - 
 
¶4.  QMM and its contractors have become the main employers in Fort 
Dauphin.  The construction phase has created 2,800 jobs within QMM 
alone, with an expected 600 to 800 permanent jobs in the subsequent 
mining phase.  The vast majority will be hired locally and from 
other parts of Madagascar.  Despite the rumors that "foreign 
contractors" are wreaking havoc on the town, only 5.4 percent of the 
current workforce comes from abroad.  The prospect of employment 
opportunities has also prompted the inward migration of Malagasy 
from throughout the country.  The Mayor of Fort Dauphin bemoaned 
that the majority of these latest arrivals lack the required skills, 
creating a substantial unemployed population.  The demand surplus 
created by this influx of people and money has driven up the price 
of housing and basic necessities.  Poor road conditions prohibiting 
the transport of food to the town's only market exacerbate the 
problem by allowing sellers to set arbitrarily high prices. 
Residents are being driven out by the rising inflation or forced to 
find alternative ways of making ends meet.  In terms of crime, the 
Chief of the Regional Police Brigade noted a "deep change" in the 
last two years with murder and rape incidents on the rise.  This 
mirrors an unexplained trend throughout the country of rising rape 
incidents targeting adolescent girls. 
 
¶5.  Acutely aware in advance that development of the mine could have 
negative impacts on the local population, QMM has teamed up with 
 
ANTANANARI 00000723  002 OF 003 
 
 
USAID, local government, and NGOs to mitigate the impact through 
development of the economic sector, natural resource management and 
conservation, health promotion and STI and HIV prevention, and the 
development of regional education opportunities, with promising 
results to date.  It also imposes a strict Code of Conduct to keep 
its workers on a tight leash. 
 
SEX TRAFFICKING LOW BUT RISING 
- - - - - - - - - - - - - - - - 
 
¶6.  Few public officials, NGO workers, or members of the general 
public were familiar with the term "trafficking in persons."  But 
according to local NGOs, the number of sex workers in Fort Dauphin 
has risen from 600 to 1,300 over the last two years.  Women and 
girls hearing stories of rich mining workers have come by the 
busload from as far away as Diego Suarez on Madagascar's northern 
coast.  Local authorities, police, and NGOs believe most of these 
young women prostitute themselves willingly and find their clients 
on their own.  However, local sex workers informed us this is only 
true when the client is a Malagasy, which is usually the case.  In 
the rarer instances where the client is a foreigner, intermediaries 
such as hotel receptionists, taxi drivers, tour guides, friends, and 
family members are used to facilitate the transaction between the 
two individuals in return for a percentage in cash or in kind.  With 
female prostitutes starting at the average age of 14 and male 
prostitutes starting at the age of 16, it seems there is at least a 
limited degree of underage sex trafficking occurring in Fort 
Dauphin.  A May 2007 survey of sex workers over the age of 18 found 
that in 27.2 percent of the cases a third party facilitated the 
sexual encounter; this figure suggests a similar situation for 
minors. 
 
¶7.  Contacts noted an increase among adolescent and adult males 
engaging in prostitution with foreign women and men.  Local boys 
told an NGO worker the going rate foreign males are willing to pay 
for a "virgin" boy is USD 200 -- at half the average national per 
capita annual income, such a sum could be enough to convince even 
heterosexual adolescent males to submit. 
 
¶8.  Local contacts explained that sexual mores are more relaxed in 
this part of the country.  In the words of a local priest, "In the 
Antanosy culture, virginity is not a gem to be kept."  Contacts 
described a traditional practice, still in vogue in Fort Dauphin, 
where parents build their daughters a small house when they turn 14 
to facilitate their sexual encounters with men -- a sign of their 
social maturity.  Adolescent girls and boys pursue foreigners, 
whether for a night or longer, hoping to acquire cell phones and 
nice clothes.  Families openly encourage their daughters and sons to 
meet a foreigner in the hopes they will marry and take care of the 
family's financial situation.  When homosexual prostitution sustains 
the family, parents look the other way. 
 
¶9.  No contacts with whom we spoke had heard any reliable accounts 
of labor trafficking in Fort Dauphin.  One government official 
wondered whether this will change once mining actually starts, not 
in QMM sites themselves, but throughout Fort Dauphin as other 
investors and workers arrive. 
 
¶10.  The Chief of the Regional Police Brigade explained they 
received only two complaints of corruption of a minor in 2006. 
Parents are either unaware of their rights or hesitant to turn in 
the foreigners who sustain them, preferring to resolve cases 
privately through financial payments.  Instead, police action 
against trafficking consists mainly of weekly nightclub raids and 
awareness raising campaigns on the rights of minors.  Four police 
officers received U.S./UNICEF-funded training on the protection of 
minors in May and established a regional Brigade of Morals and 
Minors. 
 
PROSPECTS FOR THE FUTURE? 
- - - - - - - - - - - - - 
 
¶11. In the short-term, many locals will likely continue to believe 
QMM's arrival has made their lives worse.  Local government 
officials lamented they had not undertaken measures earlier to 
cushion the population from the shock of the economic boom: "We 
should have known. QMM has been here for eighteen years, but we 
never believed it would happen."  Local leaders are seeking ways to 
mitigate the impact of the (hopefully short-term) inflation, but 
without the adequate tools, they seem to be "waiting on the 
sidelines" hoping the completion of the roads and port will resolve 
market access issues and open up more jobs. 
 
¶12.  COMMENT:  In the past, Post has examined other parts of 
Madagascar where sex trafficking takes place in the absence of large 
scale economic development, employment and education opportunities 
 
ANTANANARI 00000723  003 OF 003 
 
 
(reftels).  The concept of "human trafficking" has clearly not taken 
hold in Fort Dauphin, which is to be expected in a place with a 
seemingly limited problem.  But as one of the few cities in 
Madagascar with rapidly developing economic opportunities it merits 
continued monitoring.  The construction phase of QMM's activities is 
fueling local expectations of long-term benefits, but only time will 
tell whether they will come to fruition, and at what social costs. 
END COMMENT. 
 
SIBLEY