ANTANANARIVO, Aug. 24 (Xinhua) -- Patrick Randriamisata, a Malagasy economist specializing in governance, warned in a recent interview with Xinhua that the health crisis and inflation are creating "new poor" in Madagascar.
In a recent update, the World Bank predicted a new record poverty rate of 81 percent in Madagascarof in 2020, based on its international poverty line set in 2015 at 1.90 U.S. dollars per day per capita.
This update only confirms the reality of the increase in the number of poor people in Madagascar, said Randriamisata, who is also the national coordinator of Malagasy Economists' Reflection Circle (CREM), a think tank.
A significant number of people are being reclassified as poor due to the COVID-19 pandemic, he said.
"Many Malagasy people were already living in poverty before the crisis. The health emergency only reinforces it. Many people have suffered a disruption of their economic activities, which reduces their income and subsequently their wellbeing," he said.
Impoverishment could be exacerbated by double pressure. "The rising inflation caused by the increase in fuel prices will have a strong impact on the purchasing power of households," he said.
The economist warned that the inflation trend continues to pose a serious threat to Madagascar's economy even though the country has intervened to try to control it.
"As a result, we can expect a price increase in the short term, and then an economic recession caused by inflation," he said, warning that this situation will have a negative effect on the living conditions of households if no measures are taken to support their purchasing power.
In May, the Malagasy government took the decision to increase the country's minimum wage to 250,000 ariary (about 62 U.S. dollars) in the private sector, motivated by inflation.
"This increase was just to catch up on previous inflation hikes, but it is less effective in terms of raising the purchasing power to cushion the shock of the present inflation," said Randriamisata.
Facing the country's socioeconomic difficulties, the Malagasy economist proposed a strategy that could relaunch its economy while prioritizing the foundations of its development.
Presenting agriculture as a "relevant option" and food self-security as a "great thing" for the country, he insisted that Madagascar must take action quickly in order to have a more tangible effect in the near future.
"Involving citizens in this process will make it easier to achieve the objectives, as they constitute an available internal labor force," he said, emphasizing the industrialization of the country.
"The state must make efforts to support national production units, which can help the country to gradually switch to the substitution of import products," he said.
He, however, stressed that industrialization cannot be sustained without the availability of sufficient energy resources that do not depend on non-renewable resources.
"The blue economy and tourism go hand in hand with industrialization and are an essential way to strengthen sustainable development in Madagascar," he added. ■
