Hery Rajaonarimampianina will be Madagascar's next president, but his government will be dependent on current transitional president Andry Rajoelina, indicating the continuation of interventionist economic policies. The risk of a military coup or removal of the government by street protests has fallen.
IHS Global Insight perspective | |
Significance | Hery Rajaonarimampianina is set to become Madagascar's first elected president since the 2009 military-backed coup that brought Andry Rajoelina to power. |
Implications | The military is likely to support the new government, mitigating risk of a coup. While street protests are likely over the next month, a removal of the government is unlikely. |
Outlook | Rajoelina is likely to form the next government and become prime minister, ensuring a continuation of interventionist economic policies in the mining and oil sectors. |
Hery Rajaonarimampianina is the new president of Madagascar after gaining 53.5% of the vote in the second round presidential election on 20 December 2013, the Independent National Electoral Commission for the Transition (Commission Electorale Nationale Indépendante pour la Transition: CENI-T) announced on 3 January. Rival candidate Jean Louis Robinson, who had won the largest share of the vote in first round elections on 25 October 2013, gained 46.5%. The results still need to be approved by the Special Electoral Court (Cour Electorale Spéciale: CES) before 19 January.
Robinson's campaign team has already filed approximately 300 complaints at the CES and launched at least three separate law suits. However, the CES has previously voted in favour of Rajaonarimampianina and there have been few claims of voting irregularities by either international or independent domestic observers. More crucially, members of the CES and CENI-T were primarily appointed by supporters of Rajaonarimampianina and are therefore less likely to reject his electoral victory. IHS therefore assesses that Rajaonarimampianina will become Madagascar's national president and replace the High Transitional Authority (Haute Autorité de la Transition: HAT) that has been in power since a military-backed coup in March 2009. In the unlikely case that the CES rejects the election results, a fresh election is likely to be held within three to six months, during which time the HAT would stay in power.
Political protests
In the next month, there is high risk of disruption due to political protests in major cities, but these are unlikely to trigger widespread violence or reach the critical mass to oust the new government.
Robinson has a small support base in Madagascar, yet he is backed by former president Marc Ravalomanana, who was ousted in the March 2009 coup. Supporters of Ravalomanana's Tiako I Madagasikara (TIM) party are likely to stage street demonstrations in the one-month outlook. Such protest action will pose a high risk of disruption to businesses and traffic in the capital Antananarivo, particularly around Antananarivo's Ambohijatovo Gardens, May 13 Square, the presidential palace and Democracy Square, where many diplomatic missions and international hotels are located. Since more than two-thirds of the electorate did not vote for Rajaonarimampianina in the first round, further risk of disruption is likely if protests spread to other cities such as Antsirabe, Ambatondrazaka, Fianarantsoa, Manakara, and Toamasina.
While such protests are likely to be peaceful, a heavy-handed reaction by security forces will increase collateral risk to property and bystanders during violent confrontations between partisan supporters, as well as running battles with security forces. IHS assesses that protracted protests of longer than one month are likely in case Rajaonarimampianina does not integrate members of the TIM party into his new government, or orders the arrest of senior TIM leaders such as Lalao Ravalomanana. However, Robinson does not enjoy sufficient support to oust Rajaonarimampianina in street protests, while French, US, German and South African diplomatic pressure is likely to persuade Robinson to curb protesters' ambitions.
Coup risks diminish
The military, as the main arbiter of political authority in Madagascar, is likely to support Rajaonarimampianina and the risk of a military coup will drop from severe levels to low in 2014.
Senior officers had been hostile to a return of the TIM party. Three generals have explicitly spoken out against Ravalomanana's return over the past four years, including Chairman of the Military Council for National Defence General, Ranto Rabarisoa; Commander of Antananarivo, Brigadier General Richard Ravalomanana; and State Secretary of the Force, Major General Randrianazary. Current Army Chief of Staff Colonel Andre Ndriarijaona, who led the 2009 coup that installed the HAT, is also likely to support Rajaonarimampianina.
If protests last longer than one month, the military will become increasingly likely to intervene, although such an intervention is more likely to be in support of Rajaonarimampianina rather than to oust his government. If protests last beyond one month, mutinies by junior and middle ranking officers supporting Ravalomanana are likely, although these are unlikely to trigger a transfer of political power. In the unlikely case that the new government seeks the return of Ravalomanana, who lives in exile in South Africa and faces a prison sentence in Madagascar, the risk of a coup will again increase.
Rajoelina's continued influence
Andry Rajoelina is likely to become prime minister and form the next government as Rajaonarimampianina will continue to depend on his political support.
Rajaonarimampianina does not have his own political support base and he has depended on the endorsement of Rajoelina and his Tanora malaGasy Vonona (TGV) party to win the elections. Rajoelina is therefore likely to remain the most politically influential person in the new government, possibly more powerful than Rajaonarimampianina himself. Rajoelina's coalition (tied to the TGV party) miaraka amin'ny Prézidà Andry Rajoelina (MAPAR) also won the most seats in the legislative elections on 20 December 2013, gaining 53 out of 151 seats. Various independent legislators are likely to throw their support behind MAPAR, therefore allowing Rajoelina to form the next government and assume the role of prime minister, since most independents will join Rajoelina rather than Ravalomanana's groups to gain access to government patronage and benefits.
A Rajoelina-led government will further increase Rajaonarimampianina's dependency on Rajoelina. Pro-Rajoelina officials would be likely to stay in the cabinet, including Minister of Education Jean Andre Ndremanjary and Minister of Communications Harry Lawrence Rahajason. The chief executive of Sodiat Group, Mamy Ravatomanga, who personally contributed to Rajaonarimampianina's campaign, is likely to retain a strong influence over the government. If Rajaonarimampianina successfully draws on the support of other candidates, he would have to reward these movements with posts in government. In the less likely case that the Mouvance Ravalomanana, which is tied to the TIM party, forms a coalition government, Lalao Ravalomanana is likely to become prime minister, which would restrict Rajaonarimampianina's ability to legislate. A TIM-led government would also again increase the risk of a military coup and violent protests in major cities.
Economic difficulties
As president, Rajaonarimampianina will seek the removal of international sanctions, the restoration of Madagascar's diplomatic status and the restoration of foreign aid and preferential trade agreements.
The government is facing acute economic difficulties following the collapse of the textile industry (worth 16% of GDP in 2008) and the tourism sector (11% of GDP in 2008). Following the 2009 coup, preferential trade benefits from the United States offered under the Africa Growth and Opportunity Act (AGOA) and donor aid, which accounted for 40% of the budget under Ravalomanana, were removed. In the election campaign, Rajaonarimampianina sought to distance himself from Rajoelina's interventionist economic policies and he will aim to instil new investor confidence and restore relations with bilateral and multilateral partners, especially since the election was mostly deemed free and fair. The restoration of access to AGOA is likely to take at least one to two years.
Outlook and implications
Rajoelina's influence over the TGV party and the new government is likely to ensure the retention of the status quo, including interventionist policies in key sectors, such as mining and energy. Chinese investors who supported Rajaonarimampianina's campaign, such as Madagascar Southern Petroleum Company (MSPC), are likely to be favoured. The new government is likely to step up the review of mining and oil contracts, which is likely to lead to an increase in mineral royalties from 2% to between 5% and 10%.
Rajoelina has also sought to renegotiate contracts with foreign-owned nickel and cobalt projects, particularly regarding tax exemptions granted to firms such as Sherritt International Corporation. Rio Tinto's ilmenite mining operations also face higher risk of intervention and contract renegotiation. Energy companies such as Madagascar Oil SA and Total SA that are proceeding with plans to drill in the fields of Tsimiroro and Bemolanga are less likely to face expropriation risk. One of the greatest obstacles facing foreign investors is the slow licensing process, with a backlog of some 4,000 mining licence applications. For example, Madagascar Oil expects to begin sale of crude oil in 2014 despite currently only holding an exploratory licence. No new permits have been issued since 2011, although favoured investors such as China's Wuhan Iron and Steel Co (WISCO) did secure a permit.