 PRIVATIZATION |
As many institutions that have called for the assistance of Bretton-Woods institutions, Madagascar has not escaped to the privatization trend. This seemed unavoidable considering that most public enterprises, despite important net transfers from the State in order to bail out their treasury, collapsed under inextricable difficulties. In 1991 the arrears of public companies represented 25% of GDP. Before their privatization, BFV and BTM's debts were USD 85 million and USD 72 million respectively.
Although started in 1987, privatization is far from completed. Until now it is the subject of passionate and controversial debates. Besides, until now, nobody has an exact idea of the privatization formula. No report has been drafted or published. However, the Privatization Committee, according to a 1996 law should write up a detailed annual report including, among other elements, the operations carried out, the contribution of sales and the allocation of the sums cashed in, based on an external audit.
Despite numerous information campaigns, many consider that the State should not disinvest totally from public enterprises that are of vital interest to the country, such as Telma or the national carrier Air Madagascar. Is the privatization of the Office Malgache des Tabacs relevant - considering that it insures the cultivation of tobacco in the Big Island and manage the small producers? Tobacco provides to the State approximately USD 47 million worth of taxes. Some Malagasy people believe that in complying with all donors' demands at any price, national wealth is being given away to foreigners. Albeit the Privatization Committee stresses that 92% of the buyers are Malagasy, we must acknowledge that their involvement in the privatization of the large companies remains relatively modest. This analysis is shared by Naina Andriantsitohaina, President of the Union of Industries of Madagascar, who claims that the number one fortune of the country is considerably far away from any of his counterparts in France or South Africa.
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President of the SIM
According to the initial schedule, out of one hundred enterprises, fifty should have been privatized in 1999. "The established schedule has not always been realistic", retorts Mr. Horace Constant, Minister for Privatization and Development of the Private Sector. So far, national and foreign operators have acquired only 15. The privatization of the banking system started in 1998 with its liberalization and ended up with the buying of BTM by Bank of Africa. Solima, that held the monopoly of imports, refining and distribution of fuel, was dismantled and then bought by multinationals such as Galana-Gulf, Shell, Total-Fina-Elf, Jovenna-Mobil, Vitogaz and Moccoh.
Among the entities left for privatization, 28 companies qualified as minor files by the privatization committee will be sold off. As for the 7 large firms, privatization is following its normal path. Regarding Telma, the successful applicant will be known on December 17th. The privatization of Air Madagascar has been suspended. "The present situation is not appropriate to privatize an airline. For the time being it is more interesting to find a partner that would jointly run the lines", explains Mr. Charles Angelo Rasolonay, Minister of Transports and Meteorology.
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Intro
