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Country Commercial Guides for FY 2000: Madagascar Report prepared by U.S. Embassy Antananarivo, released July 1999

CHAPTER III:   POLITICAL ENVIRONMENT

NATURE OF POLITICAL RELATIONSHIP WITH THE UNITED STATES

The government and the people of Madagascar are favorably disposed towards the United States, and relations are friendly. The United States provides significant bilateral assistance, mainly in the environment, health, population, and governance sectors. The United States also contributes resources indirectly, through multilateral development institutions such as the United Nations Development Program, the United Nations Environment Programme, the World Bank, the International Monetary Fund and the African Development Bank.

Madagascar is historically linked to former colonial power, France. Its government, legislature and judicial system emulate the French model in many ways. Madagascar is a member of the Indian Ocean Commission, COMESA, the Indian Ocean Rim, the Non-Aligned Movement and the Organization of African Unity. Its non-alignment is reflected in its "all points" diplomatic and commercial relations, which include Israel, North and South Korea, Taiwan, China and Iran.

MAJOR POLITICAL ISSUES AFFECTING BUSINESS CLIMATE

After years of failed socialist economic policies, Madagascar has taken important steps towards economic reform since 1990 by beginning to reduce the government's presence in the productive sectors of the economy.

Most political groupings do not overtly take issue with the need for structural adjustment. However, strong vested monopoly interests provide ample campaign financing to political parties and individual politicians in an effort to influence policy outcomes. In many instances, these vested interests are diametrically opposed to change.

BRIEF SYNOPSIS OF POLITICAL SYSTEM, SCHEDULE FOR ELECTIONS AND ORIENTATION OF MAJOR POLITICAL PARTIES

Madagascar's political system has changed radically since the adoption of a new Constitution approved by referendum in March 1998. The new Constitution strengthens the role of the President of the Republic and promises more autonomy to the provinces. In May 1998, the Malagasy people elected a new National Assembly. The Constitution provides for a Senate, but this second chamber has yet to be put in place. The President is elected by direct, universal suffrage for a five-year term. The Prime Minister, appointed by the President, and his government constitute the executive branch. Matters of national sovereignty--foreign affairs and national defense --belong to the President. The executive and the legislature share legislative initiative. In addition to the executive (President and Government) and the legislative (National Assembly and Senate), the Constitution provides for an independent judiciary.

With the new Constitution, there are few checks and balances to temper executive authority. Only the National Assembly, with the Senate's agreement, can impeach the President. On the other hand, the President and the Council of Government (the Prime Minister and his Cabinet) can by decree dissolve the National Assembly. The Constitutional Court must approve the constitutionality of every law before it is promulgated.

Municipal and provincial elections are due before the end of 1999 in order to meet the Prime Minister's stated goal of establishing all institutions called for in the Constitution by March 2000.