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Economy of Madagascar

The economy of Madagascar is a market economy and is supported by Madagascar's well-established agricultural industry and emerging tourism, textile and mining industries. Malagasy agriculture produces tropical staple crops such as rice and cassava, as well as cash crops such as vanilla and coffee. Madagascar's wealth of natural resources supports its sizable mining industry. Additionally, Madagascar's status as a developing nation exempts Malagasy exports from customs protocol in some areas, notably the United States and European Union. These exemptions have supported the growth of the Malagasy textile industry. Despite Madagascar's natural resources and developing industries, the 2009 Malagasy political crisis—considered by the international community to be an illegal coup — deterred foreign investments in Madagascar and caused the Malagasy economy to decline. Foreign investments have resumed following the resumption of elections in early 2014.



Agriculture, including fishing and forestry, is Madagascar's largest industry and employs 80% of its labor force. Madagascar's varied climate, ranging from tropical along the coasts, moderate in the highlands and arid in the south, allows for the cultivation of tropical crops such as rice, cassava, beans and bananas. In 2011, agricultural products—especially cloves, vanilla, cacao, sugar, pepper, and coffee—accounted for Madagascar's top twelve exports by value. Madagascar produces the second largest vanilla harvest in the world and Malagasy vanilla accounts for about a quarter of the global vanilla market.


Exports from Madagascars' Export Processing Zones, located around Antananarivo and Antsirabe, account for the majority ofgarment exports and are largely exempt from customs restrictions in the United States under the African Growth and Opportunity Act (AGOA) and in the European Union under the Everything But Arms (EBA) agreement.


A small but growing part of the economy is based on mining of ilmenite, with investments emerging in recent years, particularly near Tulear and Fort Dauphin. The mining project is highly controversial, with Friends of the Earth and other environmental organizations filing reports to detail their concerns about the mine's effect on the environment and local communities. Gemstone mining is also an important part of Madagascar's economy.

Several major projects are underway in the mining and oil and gas sectors that, if successful, will give a significant boost. In the mining sector, these include the development of coal at Sakoa and nickel near Tamatave. The Ambatovy nickel mine (Sherrit International 40%, Sumitomo 27.5%, Korea Resources 27.5%, SNC-Lavalin 5%) is a huge operation and has cost USD $4.76 million to date [12] and is due to start production in 2011. In oil, Madagascar Oil is developing the massive onshore heavy oil field at Tsimiroro and ultra heavy oil field at Bemolanga.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Madagascar"

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