Far away places and small countries such as Madagascar rarely make the mainstream news in the United States for any appreciable amount of time; however, U.S. taxpayers should take a closer look because their tax dollars – in the form of foreign assistance – will soon be in the hands of an illegitimate government that has overthrown a democratically-elected leader.
Up until recently, Madagascar had started to turn the page on its non-market based economy and lack of rule of law. An extremely poor country, a new generation of leaders had set out to eradicate poverty and improve quality of life through free-market based reforms. U.S. investments in the region were increasing and a U.S.-Madagascar Business Council established in 2002. According to the U.S. government, “U.S. national interests in Madagascar include the preservation of the country’s unique biodiversity; its growing importance as a bilateral commercial partner under the African Growth and Opportunity Act (AGOA); and alleviation of its deep poverty, which is exacerbated by natural disasters, food insecurity and weak social services … Madagascar is an ally in the global fight against terrorism.”
On February 3, 2009, Madagascar’s President, Marc Ravalomanana, was forced to resign by a military faction led by opposition leader Andry Rajoelina. The coup d’etat has, in essence, created two governments: a legitimate government in exile and an titular, illegitimate government. The exiled leader, Ravalomanana, is very supportive of close relations with the United States and was working to increase cooperation and assistance in this tiny Republic off the African west coast. In response, U.S. government officials have stated that the U.S. will suspend all non-humanitarian assistance to the country. Our Ambassador to the region has also called for a “democratic, consensual process to restore constitutional governance, culminating in free, fair and peaceful elections.”
In Hugo Chavez-like fashion, Rajoelina has started to put in motion a plan to re-make the economy and undo free-market reforms of the past decade. Rajoelina has vowed to review contracts with private companies, has used the security forces to intimidate judges and other government officials suspected of being loyal to the ousted President, and wants to significantly increased taxes to pay for programs that the government is ill-equipped to deliver. In response to the coup and the follow-on acts by Rajoelina, Madagascar has been suspended from African Union (AU) and the Southern African Development Community (SADC).
The U.S. should seriously consider economic sanctions against the coup plotters and urge our allies in the region and Madagascar’s trading partners to do the same. All leaders and government officials should be added to the Treasury Department, Office of Foreign Assets Control, specially designated nationals and blocked persons list. Any assets held in U.S. back accounts should be frozen and access to the U.S. financial system blocked. In addition, because the coup is inconsistent with U.S. policy and national security, as well as with provisions of the Foreign Assistance Act of 1961 as well as other U.S. economic assistance laws, the Millennium Challenge Corporation should suspend all lending programs until this matter is resolved consistent with the laws of Madagascar and the MCC Compact.
When implemented in short order, economic sanctions and blocking efforts can be an effective tool. In cases such as Madagascar, an insular country with high rates of poverty and dependence on foreign trade, targeted sanctions can have a high impact. U.S. taxpayers should not be required to underwrite or support governments that fail to respect the rule of law and democratic norms. Just as a majority of Americans do not support federal take over of private entities by using our tax dollars, the same holds for dispensing foreign assistance to countries that abuse rule of law and democratic processes. The U.S. should rally African countries and Madagascars’ major trading partners that include the United Kingdom, France, and China, and impose a robust and targeted economic sanctions regime on the coup plotters.