Aid Threat

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Aid inflows to Madagascar are coming under threat amid the political crisis. Already, the US and Norway have suspended non-humanitarian aid. Now, it looks as though the European Union (EU) may follow suit. A spokesperson for the EU, Jean-Claude Boidin, recently commented that 'key elements of the Cotonou (aid) agreement have been violated when it comes to the respect of human rights, democratic principles and the rule of law'. This bodes poorly for the fiscal deficit, which we expect to swell to 5.4% of GDP in 2009, from 1.7% in 2008.