Announcement of Madagascar Aid Coordination Conference

F.OR- .IMMEOIA TE RELEASE ~ . . t\lorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 ~~Jq, 1 BANK NEWS RELEASE Contact: Mrs. Pushpa Schwartz June 22, 1982 ( 202) 477-5306 MADAGASCAR AID COORDINATION CONFERENCE The following announcement was issued at the World Bank's Europea~ Office on June 18, 1982. An aid coordination conference of countries and institutions interested in supporting economic and social development of Madagaccar met in Paris on June 17 and 18, 1982. Mr. Willi A. Wapenhans, Vice-President of the Eastern Africa Regional Office of the World Bank, chaired the meeting. Representatives of Algeria, France, Germany, Italy, Japan, Switzerland, United Kingdom, United States, the Arab Bank for Economic Development in Africa, the Commission of the European Community, the European Investment Bank, the International Monetary • Fund, and the United Nations Development Programme attended the meeting. Belgiur.,, Canada, Libya, Spain, and the Organisation for Economic Co-operation and Develop- ment were represented as observers. The delegation from Madagascar was headed by the Minister of Finance, His Excellency Pascal Rakotomavo, and included the Minister of Foreign Affairs, His Ex~ellency Christian Remi Richard, the Minister of Industry -and Commerce, His Excellency Georges Solofoson, the Governor of the Central Bank, His Excellency Leon Rajaobelina, the Malagasy Ambassador to France, the Director-General of Planning, and other senior government officials. The meeting reviewed Madagascar's current economic situation and prospects on the basis of reports presented by the government, the World Bank, and the IMF. The participants noted that Madagascar's economy is encountering difficulties. The government is facing serious balance of payments problems, a growing external debt burden, and economic activity has been disrupted by cyclone damage. Agricultural production has tended to stagnate and growing food requirements, especially rice, have had to be met through imports. Industry is encountering difficulties in obtaining raw materials, spare parts, and transport infrastructure and equipment have proven inadequate to the needs of the economy. The conference noted with satisfaction that the government has been responding to this situation through a series of emergency measures affecting foreign exchange allocation, containment of government expenditures and increased budget revenues, control of capital expenditures and external debt, and most recently a devaluation of the Malagasy franc . • I . ..  - 2 - The participants recognized that the government has shown considerQble courage tn taking these measures, and welcomed the government's efforts to situate its short term needs within the context of an array of measures to create lasting adjustments tn the country's economy. • The meeting therefore considered the provision of external concessionary assistance, particularly essential commodities, to relieve the pressure on the balance of payments. The go,~rnments represented agreed to provide a total of SOR 63 million in new commitments for the year 1982. There were also positive indications that additional contributions might be forthcoming in the month ahead. The meeting concluded on the need and usefulness of the establishment of a consultative group to provide an appropriate and effective forum for aiding Madagascar's development. • •