page_title: Madagascar
section_title: Economy
hierarchical_section_title: Madagascar / Economy
caption_attribution_description: English: Export Trading Treemap. From MIT/Harvard Atlas of Economic Complexity
context_page_description: Madagascar, officially the Republic of Madagascar, and previously known as the Malagasy Republic, is an island country in the Indian Ocean, approximately 400 kilometres off the coast of East Africa. At 592,800 square kilometres Madagascar is the world's second-largest island country. The nation comprises the island of Madagascar and numerous smaller peripheral islands. Following the prehistoric breakup of the supercontinent Gondwana, Madagascar split from the Indian subcontinent around 88 million years ago, allowing native plants and animals to evolve in relative isolation. Consequently, Madagascar is a biodiversity hotspot; over 90% of its wildlife is found nowhere else on Earth. The island's diverse ecosystems and unique wildlife are threatened by the encroachment of the rapidly growing human population and other environmental threats.
  The archaeological evidence of the earliest human foraging on Madagascar may date up to 10,000 years ago. Human settlement of Madagascar occurred between 350 BC and 550 AD by Indianized Austronesian peoples, arriving on outrigger canoes from Indonesia.
context_section_description: During the era of Madagascar's First Republic, France heavily influenced Madagascar's economic planning and policy and served as its key trading partner. Key products were cultivated and distributed nationally through producers' and consumers' cooperatives. Government initiatives such as a rural development program and state farms were established to boost production of commodities such as rice, coffee, cattle, silk and palm oil. Popular dissatisfaction over these policies was a key factor in launching the socialist-Marxist Second Republic, in which the formerly private bank and insurance industries were nationalized; state monopolies were established for such industries as textiles, cotton and power; and import–export trade and shipping were brought under state control. Madagascar's economy quickly deteriorated as exports fell, industrial production dropped by 75 percent, inflation spiked and government debt increased; the rural population was soon reduced to living at subsistence levels. Over 50 percent of the nation's export revenue was spent on debt servicing.
  The IMF forced Madagascar's government to accept structural adjustment policies and liberalization of the economy when the state became bankrupt in 1982 and state-controlled industries were gradually privatized over the course of the 1980s. The political crisis of 1991 led to the suspension of IMF and World Bank assistance. Conditions for the resumption of aid were not met under Zafy, who tried unsuccessfully to attract other forms of revenue for the State before aid was once again resumed under the interim government established upon Zafy's impeachment. The IMF agreed to write off half Madagascar's debt in 2004 under the Ravalomanana administration. Having met a set of stringent economic, governance and human rights criteria, Madagascar became the first country to benefit from the Millennium Challenge Account in 2005.
  Madagascar's GDP in 2015 was estimated at US$9.98 billion, with a per capita GDP of $411.82. Approximately 69 percent of the population lives below the national poverty line threshold of one dollar per day. During 2011–15, the average growth rate was 2.6% but was expected to have reached 4.1% in 2016, due to public works programs and a growth of the service sector. The agriculture sector constituted 29 percent of Malagasy GDP in 2011, while manufacturing formed 15 percent of GDP. Madagascar's other sources of growth are tourism, agriculture and the extractive industries. Tourism focuses on the niche eco-tourism market, capitalizing on Madagascar's unique biodiversity, unspoiled natural habitats, national parks and lemur species. An estimated 365,000 tourists visited Madagascar in 2008, but the sector declined during the political crisis with 180,000 tourists visiting in 2010. However, the sector has been growing steadily for a few years; In 2016, 293,000 tourists landed in the African island with an increase of 20% compared to 2015; For 2017 the country has the goal of reaching 366,000 visitors, while for 2018 government estimates are expected to reach 500,000 annual tourists.
  The island is still a very poor country in 2018; structural brakes remain in the development of the economy: corruption and the shackles of the public administration, lack of legal certainty, and backwardness of land legislation. The economy, however, has been growing since 2011, with GDP growth exceeding 4% per year; almost all economic indicators are growing, the GDP per capita was around $1600 (PPP) for 2017, one of the lowest in the world, although growing since 2012; unemployment was also cut, which in 2016 was equal to 2.1% with a work force of 13.4 million as of 2017. The main economic resources of Madagascar are tourism, textiles, agriculture, and mining.
caption: A proportional representation of Madagascar's exports
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