Gemstone Mining in Madagascar:

Public and Private Sector Development and Poverty Reduction

Heather McGeory and Alieda Baig

Columbia University

May 12, 2005

TABLE OF CONTENTS

Paragraph
SUMMARY

POLITICAL ECONOMY OF MADAGASCAR

/ 1 – 12
A. Political and economic transition / 1 – 3
B. Investment climate / 4 – 8
C. Public infrastructure / 9 – 10
D. Governance / 11 –12
GEMSTONE MINING / 13 – 35
A. Management of non-renewable mineral resources / 13 – 14
B. Several areas for attention / 15 – 16
C. Promoting economic growth / 17 – 18
D. Transparency in the private sector / 19 – 22
E. Stakeholder participation in decision-making / 23 – 25
F. Government use of its mining laws / 26 – 28
G. Control of environmental effects / 29 – 30
H. Long-term planning / 31 – 35
CONCLUSIONS / 36
APPENDIX A – Millennium Challenge Corporation Country Indicator Rankings
(Madagascar)
APPENDIX B – Mine Closure Planning Process
APPENDIX C – Technical Tables for Mine Closure Consideration
REFERENCES

Gemstone Mining in Madagascar:

Public and Private Sector Development and Poverty Reduction

Heather McGeory and Alieda Baig

Columbia University

May 12, 2005

SUMMARY

This paper intends to examine development of the gemstone industry in Madagascar. It is written for private and public sector audiences.

The first section deals with Madagascar’s commitments to multilateral lenders, its participation in the Millennium Development Goals and its current plans to reform several domestic policies. Recent changes in Madagascar’s investment climate for foreign investors are also discussed.

The second section deals with the mining industry and its direct and indirect relationships with the Millennium Development Goals and corresponding poverty reduction strategies. This section also makes recommendations for how policies can be strengthened to ensure greater autonomy over Madagascar’s mineral resources.

The appendices show a variety of information on economic indicators for Madagascar and technical guidelines.

This paper in its entirety can serve as a common document for those building public-private partnerships in the mining sector in Madagascar. Sustainable and fair use of the country’s valuable nonrenewable mineral resources can serve to both reduce poverty in the local communities and be a profitable investment for private firms.

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