Representatives of the World Bank and the International Finance Corporation (IFC) have published a tribune, on poverty on the Big Island, entitled “Why poverty persists in Madagascar and how to break the vicious circle”.
This article was written by the representatives of the World Bank and the International Finance Corporation, Marie-Chantal Uwanyiligira and Marcelle Ayo, as well as by the economist Francis Mulangu.
The authors stressed that Madagascar has an excellent growth asset with its dense forests, fertile land, tourism assets, unique biodiversity, and young population.
The panel also spoke of Madagascar’s healthy security climate, as the country has never experienced violent conflict.
However, the Big Island ranks among the poorest countries in the world, with per capita income declining by 45% between 1960 and 2020.
The authors ask why Madagascar is failing to realise its potential when it has the essential assets.
The persistence of poverty is due to a lack of transparency in power, poor governance and corruption, the paper said.
For example, low levels of private sector investment are preventing the creation of jobs and economic growth, and therefore poverty reduction.
Indeed, during the period 2013-2019, investment represented only 19.4% of GDP.
Similarly, structural transformation in Madagascar has been limited, as 90% of the young population works in subsistence agriculture and in the informal sector.
The authors propose to increase growth, create a balanced institutional framework to foster a dynamic and competitive private sector, initiate reforms and enhance transparency in order to fight poverty.