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RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMA RUEHMR RUEHPA RUEHRN RUEHTRO
DE RUEHAN #0052/01 0291309
ZNR UUUUU ZZH
R 291309Z JAN 10
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC 3264
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 03 ANTANANARIVO 000052 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR AF/E MARIA BEYZEROV AND JAMES LIDDLE 
DEPT PASS TO USAID/AFR/EA ASHLEY MARCUS 
DOC FOR RTELCHIN 
TREASURY FOR FRANCOIS BOYE 
PARIS FOR WALLACE BAIN 
LONDON FOR PETER LORD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EINV MA
SUBJECT: ANTANANARIVO POL/ECON UPDATE 
 
¶1. (U) SUMMARY: This is U.S. Embassy Antananarivo's Update for 
January 25 to 29, a periodic unclassified review of major political, 
economic, and commercial events and information from the U.S. 
Mission to Madagascar and the Comoros. 
 
POLITICS (Paragraphs 2-6) 
- ELECTIONS POSTPONED 
- ANDRY RAJOELINA IN PARIS 
- OIF ELECTIONS SUPPORT 
- FETISON THREATENED 
- HAT DIVIDES INTO PARTIES 
 
ECONOMIC AND COMMERCIAL (Paragraphs 7-11) 
- FORMER MINING CONTRACTS SAFE 
- GRANT OF NEW MINING PERMITS 
- EXCHANGE RATE DEPRECIATION AND INFLATION 
- DISGRUNTLED CIVIL SERVANTS 
- SSH PROMOTES ENVIRONMENTAL EDUCATION 
 
END SUMMARY 
 
-------- 
POLITICS 
-------- 
 
¶2. (SBU) ELECTIONS POSTPONED: De facto President Andry "TGV" 
Rajoelina has rescinded his call for elections on March 20, 
responding to pressure from the international community, opposition 
political movements, and civil society.  He has not, however, 
changed his negative response to AU Chairperson Jean Ping's request 
for a return to negotiations; Ping has given Rajoelina until 
February 5 to reply before the AU considers its options, to include 
targeted sanctions against the regime leaders.  Rajoelina did not 
announce a new date for elections, but "Prime Minister" Vital told 
the ambassador the first half of May was likely.  His cabinet has 
indicated that preliminary "national meetings" (to work on revisions 
to the constitution) would proceed in February regardless.  As long 
as the opposition movements remain excluded from the transition 
government, however, they are unlikely to participate in any 
elections, in March or otherwise. 
 
¶3. (SBU) ANDRY RAJOELINA IN PARIS: Following a Jan 26 press 
conference in which he stated that the March 20 legislative election 
date was negotiable, Rajoelina departed Madagascar quietly for 
France.  On January 27 and 28, Rajoelina held meetings in Paris with 
French SG of the Presidency Claude Gueant, Elysee Africa Adviser 
Andre Parant, Cooperation Minister Alain Joyandet, and Elysee Africa 
Technical Adviser Remi Marechaux, where he reportedly was urged to 
give due consideration to AU Chairman Ping's compromise proposal. 
Readouts from Paris indicate that the French are willing to accept 
TGV's plan to let the results of legislative elections determine the 
composition of a unity government.  This plan ignores the question 
of who will prepare legislative elections; opposition parties have 
rejected the unilateral preparations that the HAT has underway. 
Local press reported that following a stop in Paris, TGV would 
continue on to Libya to meet with Kaddafi or Morocco, although HAT 
contacts confirmed to Emboff Jan 29 that TGV would not go to Libya. 
The press reported here that Gueant would recommend to TGV to be 
flexible with regards to Ping's recommendations and urge him to 
postpone legislative elections and accept setting up some of the 
transition institutions proposed by the Maputo and Addis-Ababa 
agreements.  In a further attempt to influence international 
opinion, HAT Foreign Minister Ny Hasina traveled to Addis Ababa to 
meet with AU representatives this week. 
 
¶4. (SBU) OIF ELECTIONS SUPPORT: The press reported Jan 25 that the 
OIF delegation, present during the Ping mission, held two meetings 
with the minister of interior to discuss election plans and pledged 
to send a support delegation soon.  OIF contacts confirmed to Emboff 
that the meetings took place, but did not comment on the possibility 
of another delegation.  French officials reported separately that 
the OIF concluded that Malagasy elections officials had the 
technical capacity to organize elections, but needed to put an 
independent election commission into place before proceeding.  The 
OIF is viewed by most Malagasy as essentially an extension of 
France, operating under French instruction. 
 
¶5. (SBU) FETISON THREATENED: On January 28, the Special Intervention 
Force (FIS, a military unit that reports to Rajoelina) attempted to 
arrest Co-President Fetison Andrianirina (of the Ravalomanana 
movement) at a local hotel; however, he escaped.  He had planned to 
 
ANTANANARI 00000052  002 OF 003 
 
 
give a press conference at the hotel, but did not go there once 
apprised of the arrival of security forces.  He instead gave his 
press conference by telephone.  On January 29, the ambassador met 
with Fetison at the German embassy.  The two ambassadors then 
demarched "PM" Vital "in the spirit of reconciliation" to cease all 
efforts to arrest Fetison.  One result of the demarche was Vital's 
agreement to receive Fetison discreetly on Sunday, January 31, to 
discuss a possible consensual way forward; Fetison has agreed to do 
so.  Vital also pledged that Fetison would not be arrested. 
 
¶6. (SBU) HAT DIVIDES INTO PARTIES: In light of the upcoming 
legislative elections, Rajoelina supporters have begun to divide and 
form different coalitions.  Twenty-four political associations and 
parties, most of them HAT members including Rajoelina's TGV, formed 
a new coalition called UDR Fanovana - or Union of Democrats and 
Republicans for Change, led by Jean Lahiniriko - reportedly to unite 
their forces and present a common candidate for each electoral 
circumscription to ensure that the "presidential coalition" gains a 
majority of seats at the National Assembly.  Additionally, Telecoms 
Minister Augustin Andriamananoro and Education Minister Julien 
Razafimanazato, reportedly "with Rajoelina's blessings," set up 
another pro-Rajoelina coalition called DEFI 2010 (or Challenge 
2010), open to all individuals and aimed at "promoting new political 
ethics and practices by Malagasy youth or young-minded 
personalities."  Their candidates will be asked to sign a Charter of 
Values and an ethical commitment letter.  The latest newly-created 
pro-HAT party is that of Minister of Culture Gilbert Raharizatovo, 
called RPM or Rassemblement Pour Madagascar, also advocating new 
political practices. 
 
----------------------- 
ECONOMIC AND COMMERCIAL 
----------------------- 
 
¶7. (U) FORMER MINING CONTRACTS SAFE: On January 19, HAT Minister of 
Mining Mamy Ratovomalala announced that the de facto GOM will not 
review existing mining contracts, despite previous contradictory 
assertions by the HAT that it would revise the terms of the QMM (Rio 
Tinto) and Ambatovy (Sherrit, etc) projects.  He argued that 
Madagascar did not want to follow in the footsteps of other African 
countries that have suffered negative impacts, including a lack of 
investment, from revising mining contracts. 
 
¶8. (SBU) GRANT OF NEW MINING PERMITS: In mid-January, the de facto 
minister of mining announced that the ministry would issue 1,200 new 
permits this year.  The de facto regime did not issue any permits in 
2009 and has a backlog of requests.  Private mining interests fear 
that the grant of new permits will be a source of corruption, as 
they have been told unofficially that the granting of new permits 
would not follow the regular channel.  However, the director general 
of mining told Emboff that the ministry must follow the provisions 
of the current mining code.  He explained that the minister is 
involved in the last step of permit issuance and that, if corruption 
occurs, it was most likely at that stage of the process. 
 
¶9. (SBU) EXCHANGE RATE DEPRECIATION AND INFLATION: Since the 
beginning of 2010, the Ariary has depreciated by 5.62 percent 
against the Euro and by 7.33 percent against the Dollar (the 
exchange rate USD/Ariary went from Ar 1962.42 on January 4, to Ar 
2106.4 on January 26).  According to the Central Bank, this is 
attributed to the decline in capital inflows on the foreign exchange 
market but not to a move to restore export competitiveness following 
the loss of AGOA by adopting a policy of currency depreciation, as 
had been suggested previously.  The IMF resrep explained that the 
Ariary generally faces downward pressure during the first quarter of 
each year due to the agricultural cycle, which produces few 
forex-earning exports but features high demand for rice imports, 
during this time of year.  He further argued that the real exchange 
rate appreciated slightly in 2009, the Ariary remains overvalued, 
and further depreciation this year would be beneficial.  Rice prices 
have stabilized as the first harvest of the year has begun, but 
prices of meat, sugar, flour, cooking gas, and cigarettes have 
increased since the beginning of the year. 
 
¶10. (U) DISGRUNTLED CIVIL SERVANTS: The HAT government announced a 
ten percent increase in civil servants' salaries starting from 
January 2010 despite a shortage of government revenue.  Some civil 
servants are, however, unhappy with this increase as they expected a 
revision of the whole salary scale rather than a mere ten percent 
increase. Doctors in the main public hospitals in Antananarivo - who 
reportedly earn less than police officers -- have been on strike for 
 
ANTANANARI 00000052  003 OF 003 
 
 
two weeks and have announced plans to continue until the government 
takes their request for increased pay into consideration. 
 
¶11. (U) SSH PROMOTES ENVIRONMENTAL EDUCATION: The Special Self-Help 
(SSH) Coordinator visited an SSH project focusing on environmental 
education in Andasibe national park in the Alaotra Mangoro region of 
Madagascar last week.  The grantee, Association Mitsinjo, was 
awarded USD 3,000 to provide school children with environmental 
awareness sessions throughout the year, teaching them about 
different plant and animal species and taking them through the park. 
 Before SSH was suspended last year, Mitsinjo used USD 550 to reach 
252 students. 
 
MARQUARDT