Insecurity and drought undermine Madagascar president
Thursday, May 26, 2016
Significance
Rifts within the political elite are deepening, evidenced by the departure of former Prime Minister Jean Ravelonarivo -- and his cabinet -- last month. However, the installation of a new administration does not portend stability.
Impacts
- The central bank's decision to cut its benchmark interest rate to 8.3% from 8.7% will facilitate borrowing by firms and households.
- This is unlikely to boost GDP growth given the countervailing effects of political volatility and low commodity prices.
- The UN secretary general's appeal (on an official trip earlier this month) for the government to tackle graft is unlikely to be heeded.
- If Madagascar experiences another coup, the Southern African Development Community bloc will likely expel it -- again.