The economy of Madagascar is highly dependent on its agriculture sector, including fishing and forestry which accounts for about 34% of the country’s GDP and 70% of its export income. Economic reforms started in late 1980s with an initialize privatization program (1988-1993) and the development of an export processing zone (EPZ) (early 1990s).
Madagascar is the world’s biggest producer of vanilla which accounts for nearly 50% of global market. The industry sector includes textile manufacturing and processing of various agricultural products – coffee, sugarcane, cloves, rice, cocoa, cassava, and beans. The country’s unique biodiversity, national parks, lemur species, and well-preserved natural wonders contributed to its eco-tourism market. The mining of ilmenite has attracted significant investments in the past years including the mining giant Rio Tinto Group.
Madagascar is the first country which benefited from the Millennium Challenge Account (MCA). Through the initiatives of President Ravalomanana, the coutry has established strong links with the United Sates. It has also successfully built good relationships with neighboring countries – Mauritius, Comoros, and Réunion and Europe – France, Switzerland, Germany, the UK, and Russia. In 2000, the country started preparing for the Property Reduction Strategy Paper (PRSP) under the Heavily Indebted Poor Countries (HIPC) plan. Madagascar was granted $103 million between 2001 and 2003 by the IMF Board. Also, it received debt cancellation from Paris Club worth $161 million in March 2001 and from the African Development Bank (ADB) $71.46 million-grant in June 2001 plus added credit of $20 million for its AIDS and poverty programs.