VZCZCXRO8729
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMA RUEHMR RUEHPA RUEHRN RUEHTRO
DE RUEHAN #0629/01 2470937
ZNR UUUUU ZZH
R 040937Z SEP 09
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC 2799
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RHMFISS/CDR USAFRICOM STUTTGART GE
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ANTANANARIVO 000629 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR AF/E - MBEYZEROV 
DOC FOR BERKUL 
TREASURY FOR FBOYE 
PARIS FOR RKANEDA 
LONDON FOR PLORD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON MA
SUBJECT: ANTANANARIVO POL/ECON WEEKLY UPDATE 
 
REF: A) ANTANANARIVO 607 B) Antananarivo 533 
 
¶1. (SBU) SUMMARY: This is U.S. Embassy Antananarivo's Weekly Update 
for the week of August 31 to September 4, an unclassified review of 
major political, economic, and commercial events and information 
from the U.S. Mission to Madagascar and the Comoros. END SUMMARY. 
 
POLITICS 
-------- 
¶2. (SBU) MAPUTO II DEADLINE REACHED: During the last round of 
political negotiations of the "Big 4" in Mozambique, consensus was 
not reached on who would fill the top three posts of the transition 
government outlined in the charter signed in Maputo August 9.  The 
Rajoelina delegation asked for an extension, granted until September 
4, to confer with supporters on ceding the post of prime minister to 
the Ratsiraka movement.  Rajoelina is expected to announce his 
decision late today (see septel for more details). 
 
¶3. (SBU) RELEASED DETAINEES' PROBLEMS CONTINUE: The trial of 
Manandafy Rakotonirina, Ravalomanana's shadow Prime Minister, has 
been rescheduled to September 22 (Rakotonirina remains out of prison 
on provisional release).  Ihanta Randriamandrato and two army 
colonels, all arrested with Rakotonirina in April 2009, will likely 
be tried on the same day.  All have had their trials postponed at 
least once, widely believed to be a result of the ongoing political 
negotiations.  Manandafy's lawyer, arrested August 8, has been 
transferred from remote Manjakandriana women's prison to the 
Antanimora main prison (in Tana), at her request.  She had a court 
hearing on August 28, during which the Bar Association requested 
temporary release in accordance with the Maputo I agreements.  Her 
request was rejected on the grounds that her charges (alleged 
involvement in the armed attack at VIVA TV and a series of bomb 
attempts in town) constitute a "blood crime" and are specifically 
excluded from the agreement. 
 
¶4. (SBU) EMBASSY DONATION FOR RAMADAN: The U.S. Mission held a 
Ramadan charity drive, and collected three large boxes of food items 
- rice, sugar, oil, pasta, cookies, etc. - from both American and 
Malagasy staff.  Charge Eric Stromayer presented the donations to 
the Sunni mosque of 67 Hectare (an economically disadvantaged 
neighborhood in central Tana), which also houses the headquarters of 
the Malagasy Muslim Association (FSM).  In addition to the FSM and 
Mosque leaders, the DCM also met with women preparing the Iftar 
dinner.  The recipients were very appreciative of the American 
community's consideration to the Malagasy Muslim community. 
 
ECONOMIC AND COMMERCIAL 
----------------------- 
¶5. (SBU) VISIT TO SELF-HELP FUND PROJECT: Last October the Special 
Self-Help program granted $3,000 to Association Tiako Vehivavy 
Antsirabe-Nord Mandroso (TI-VAM) to complete a clean water project 
in two rural villages outside of Sambava.  TI-VAM worked with these 
communities to construct two wells that now provide safer drinking 
water to over 600 people.  Two embassy employees visited these sites 
last week, where community officials expressed their gratitude to 
the US government for funding this project that will improve the 
health of those living in these villages. 
 
¶6. (SBU) MADAGASCAR SIGNS INTERIM EPA AGREEMENT: Although the EU has 
frozen its aid to Madagascar pending a final decision under the 
Cotonou Agreement in early November, Madagascar was permitted to 
sign an interim Economic Partnership Agreement (EPA) on August 29th 
(ref A), along with Mauritius, Seychelles, and Zimbabwe. According 
to the Economic and Trade Section Chief of the EU Delegation in 
Madagascar, Monica Pambianco, the European Commission delegated the 
decision on whether or not to allow Madagascar to sign the EPA to 
the other countries in Madagascar's negotiating block from the 
Common Market for Eastern and Southern Africa (COMESA), which 
approved.  Regarding this signature, "normal channels were not 
respected", said Pambianco, as the EPA was signed by the Malagasy 
Ambassador in Mauritius, while the Trade Minister was not invited. 
The EU permitted Madagascar to sign on in order to avoid 
compromising its trade relationship with the COMESA group, Pambianco 
explained. The interim EPA offers duty free, quota free access for 
all exports from Madagascar to the EU, with transition periods for 
rice and sugar.  Madagascar will liberalize 81 percent of its 
market, with exceptions mainly in the agricultural, chemicals, 
paper, and textile sectors.  The agreement also contains provisions 
on rules of origin (still open to discussion), development 
cooperation, fisheries, defense, and dispute settlement mechanisms. 
 
¶7. (SBU) AMBATOVY ON TRACK:  The transition regime (HAT) has ceased 
 
ANTANANARI 00000629  002 OF 002 
 
 
(at least for now) its harassment of Ambatovy, a USD 4.5 billion 
nickel and cobalt mining/refining project, the largest investment in 
Madagascar's history, following a public denunciation by the project 
of the HAT's actions.  The HAT had previously threatened to change 
the terms of the Canadian/Japanese/Korean venture (Ref B), and 
although it has backed down from demands for a larger cut, partial 
ownership, or "signing bonuses", the project's lenders are still 
wary of advancing needed working capital. 
 
¶8. (SBU) MADAGASCAR OIL MOVES AHEAD: Madagascar Oil's new CEO Laurie 
Hunter visited Madagascar to meet with local managers, staff of its 
joint-venture partner Total, and working-level contacts in the 
government.  Hunter told the Ambassador that MO plans to fulfill its 
commitments, keep its six exploration blocks, and move full steam 
ahead.  The French firm Total, the operator for its Bemolanga block, 
has begun a production pilot with promising initial results.  Total 
has approximately 300 staff on site in northeastern Madagascar and 
plans to invest USD 100 million over 2.5 years.  If the block 
eventually enters into production, which would require a total USD 7 
billion investment, it could be fully operational by 2019, producing 
upwards of 200,000 barrels of oil per day by mining oil sands. 
Hunter also mentioned that MO is eager to begin production on its 
other fully self-owned blocks, which contain lighter oil, to raise 
money for an eventual Bemolanga investment. 
 
¶9. (SBU) MAERSK'S WOES:  A Danish embassy representative from South 
Africa told the DCM August 31 that the Danish shipping company 
Maersk was being harassed by a local Malagasy firm, Genie, whose 
spurious commercial and criminal law suits were too easily 
entertained by the malleable, corruptible Malagasy justice system. 
Following the issuance of an arrest warrant against Maersk 
Madagascar's general manager, a French citizen, the manager fled the 
country for fear of his physical safety.  Two additional Maersk 
employees have also been sentenced to six months in prison for 
calumny.   Although the first complaint against the company by Genie 
was lodged in 2006 for the loss of cargo, the seven recent claims 
have grown increasingly far-fetched, while the response of Malagasy 
law enforcement has become increasingly threatening, according to 
Maersk representatives. 
 
¶10. (SBU) ILMENITE EXPORTS CONTINUE ON TRACK: On August 23, Rio 
Tinto Qit Madagascar Minerals (QMM) shipped its second batch of 
ilmenite from Ehoala port in Fort-Dauphin.  Exact quantities have 
not been revealed to the public for commercial reasons, but QMM 
announced in July that the company expects to export at least 
750,000 tons per year. 
 
¶11. (SBU) OIL TANKER SINKS OFF CAPE ST. MARIE: On August 26, a 
possible environmental disaster was precipitated when Turkish vessel 
M/S Gulser Ana sank off Cape Sainte Marie in southern Madagascar. 
Reports indicate that about 23 crew members were on board, with a 
cargo of 39,000 tons of phosphate, 383 cubic meters of fuel, and 
7,000 liters of lubricants.  Sambalis Jerome, General Manager of the 
Port, Maritime, and Water Agency (APMF) said that the exact reason 
of the accident remains unknown.   The captain of the vessel said 
that the vessel documents as well as the cargo documents have 
disappeared.  The Malagasy Government is launching an international 
investigation to track the exact routing and a description of the 
cargo transported by the vessel.  The press reports great concern 
about the possible environmental threat caused by the spill.  The 
magnitude of the possible environmental damage is unclear at this 
time.  The high concentration of phosphate has already killed 
thousands of small fish which are washing up on the beaches, and the 
authorities have forbidden fishing in the area. 
 
MARQUARDT