MADAGASCAR: PRESIDENT RATSIRAKA'S BALANCING ACT

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CIA-RDP88T00768R000400440001-4
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October 1, 1986
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Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 R Next 1 Page(s) In Document Denied Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 ? Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 t. a Directorate of Intelligence Madagascar: President Ratsiraka's Balancing Act An Intelligence Assessment Secret Secret ALA 86-10045 October 1986 Copy 298 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Directorate of Secret Intelligence Reverse Blank Madagascar: President Ratsiraka's Balancing Act An Intelligence Assessment This paper was prepared by Office of African and Latin American Analysis, with contributions from the Office of Leadership Analysis. It was coordinated with the Directorate of Operations. Comments and queries are welcome and may be directed to the Chief, Africa Division, ALA' Secret ALA 86-10045 October 1986 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Key Judgments Information available as of 22 September 1986 was used in this report. Madagascar: President Ratsiraka's Balancing Act Secret Madagascar, the largest, most populous, and most strategically situated of the southwestern Indian Ocean island states, is undertaking a measured shift away from close ties to the Soviet Union in an attempt to assume a more nonaligned posture. In our view, however, after more than a decade in power the often unpredictable 49-year-old Malagasy President, Didier Ratsiraka, has become accommodating to the West because of sheer economic necessity rather than because of any fundamental change in ideology. Madagascar's need for financial aid nevertheless provides the West opportunities to counter Soviet influence in the region. Ratsiraka's attempt to use Western economic prescriptions to remedy years of failed socialist policies is politically risky, since the austerity-driven economic reforms will keep feeding popular discontent over the short to medium term. The program not only will further depress living standards across the board, but could cost Ratsiraka support from entrenched political interests that support a continuance of socialist policies and a more pro-Soviet tilt. We expect Ratsiraka to seek improved relations with the West?particu- larly the United States and France?but to take care not to threaten seriously ties to Moscow, which has supplied the bulk of Madagascar's military training and equipment since 1975. Despite some domestic criticism that he has not moved close enough to the West, we expect Ratsiraka to be mindful that a major policy shift could prompt the Soviets to move against him, by either cutting off military assistance or by using their influence with the armed forces to foment opposition to him. Despite Ratsiraka's domestic concerns and his relationship with the Soviet Union, there is ample evidence that he has held the line on some key economic issues as well as on denying Moscow military access to Malagasy air and naval facilities. We believe he will continue to prohibit access by nonlittoral powers to Malagasy facilities such as Antsiranana (Diego Suarez)?one of the world's best natural deepwater harbors and the former headquarters of French naval forces in the Indian Ocean. Ratsiraka knows that granting such access to Western nations would lead the Soviets to apply pressure for reciprocal privileges. Although Ratsiraka will be increasingly beset by conflicting pressures regarding both foreign and domestic policies, we judge that he has a good chance of managing the challenges to this balancing act through the iii Secret ALA 86-10045 October 1986 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret presidential election scheduled for 1989. He has preserved his political dominance thus far by exploiting his image as a strong national leader and by judiciously accommodating, co-opting, or ruthlessly cracking down on political opponents. A combination of other factors also will favor Ratsiraka: ? The current gloomy economic picture is likely to brighten over the next few years, and, with the harsher social impact of the reform program behind him, Ratsiraka should have increasing flexibility to follow through on additional reforms. ? The political opposition is divided along ethnic, regional, and ideological lines, and has no leader able to match Ratsiraka's national stature or mobilize broad-based popular support. ? Ratsiraka has strong military backing. We expect the security forces to remain apolitical and loyal so long as Ratsiraka is able to assure them a steady flow of military assistance and to protect other service-related interests. ? While the Soviets probably do not like Ratsiraka's warming toward the West, they probably do not yet view it as a major threat to their present or long-term interests in the region. They appear willing to go along with Ratsiraka for the time being to safeguard their existing equities. Even so, although Ratsiraka's cunning has served him well, his behavior may at some point lead him into a potentially fatal error. If he were overthrown?an event we now think unlikely we doubt that a new leadership would make dramatic policy shifts. Any new government almost certainly would be enticed by Soviet offers of security assistance while it attempted to consolidate its hold on power and would be vulnerable to new pressures for Soviet access to Malagasy facilities. At the same time, Madagascar's economic needs and the probable inability of the Soviet Bloc to provide substantial economic assistance would encourage a new government to retain aid and trade ties to the West. Secret iv 25X1 25X1 25X6 25X6 25X6 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 -- Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Contents Page Key Judgments iii Introduction 1 The Balancing Act 1 Dabbling in Economic Reform 1 But Still a Socialist Authoritarian at Heart 3 Playing to Both East and West 5 But Dependence on the Soviets Remains 5 Facing the Challenges 9 Divided Political Opposition 11 Social Pressure 12 The Role of the Military and Soviet Influence 14 Outlook 15 Scenarios for Change 16 Popular Uprising 16 Military Coup or Assassination 17 Implications for the United States 17 Appendix Profile of the National Front 19 V Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Pemba Moza m bisque hacala ??tb? ..,-.1h4ocambique y Limbo' t/ri 4?" MORONI II Grande Comoros Comore Anjouan Moheli lie Chesterfield- "61 lie Juan de Nova. (France) cy he Europa (France) lies-... Barren lies Glorieuses, (France) ? Mayotte (administered by France, claimed by Comoros.) Mahajanga Nosy Mitsio, Nosy Be / adagascarib Amb tosoratr Maintirano Morondava Toliar Cap d'Ambre with shipyard facility siranana A Antalaha A Maroantsetra Cr .....,?, c 1 ?''' bl.o f ,,, ANTANANAR vo Cr 0 Gr- -\ _e .k .\. Cr r? c=" Avvince de ) kunsokr Milani / M \ ..0-'j :OM M ^ t, / ) M ,,', 2. kl: Antsirabe Flan ntscja 5:5 Manakara Iles Sainte-Marie Toamasina Indian Ocean Secret 708431 (545856) 9-86 vi Marina Selected ethnic group 4 Major airfield ET Cotier dominance t Selected port Cotier collectively refers to the coastal Railroad peoples mainly of Negroid descent. Road Major Exports =n Cloves Coffee Cr Chromite CrO Graphite A Vanilla M Mica 190 Kilometers 100 Miles Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Madagascar: President Ratsiraka's Balancing Act Introduction Madagascar, nearly the size of Texas and, with close to 10 million inhabitants, the most populous of the southwestern Indian Ocean island states, has increas- ingly become a focus of interest for the United States and the Soviet Union. The island is situated along major sea lanes, so air and naval facilities are militari- ly attractive to foreign powers; foremost among these facilities is the port at Antsiranana (Diego Suarez)? one of the world's best natural deepwater harbors and the former headquarters of French naval forces in the Indian Ocean. Its unique ethnic mix and historical development make Madagascar culturally complex, and the society is marked by seemingly contradictory characteristics. To some extent, the country's leadership reflects the anomalies that pervade Malagasy culture. Soon after Madagascar's President, Didier Ratsiraka, was elect- ed in 1975, he aligned his country with the Soviet Bloc and radical Third World states and embarked on what proved to be a disastrous "socialist revolution." Since the early 1980s, however, Ratsiraka has been gradually shifting toward a more moderate posture, reflecting an acknowledgement of Madagascar's dire economic straits and need for Western assistance. This paper assesses the various political and economic pressures on Ratsiraka as a result of his shift, his efforts to balance conflicting forces, and prospects for stability of the regime. The Balancing Act President Ratsiraka's leadership skills increasingly are being put to the test as he attempts to revive Madagascar's ailing economy by reducing state con- trols while not undermining his socialist credentials. Ratsiraka fears that moving too far and too quickly in new directions not only could play into the hands of his leftist opposition, but could also alienate the Soviet-trained and 1 -equipped military forces and damage ties to Moscow. The President is well aware that previous govern- ments have fallen over economically generated unrest, and, in our view, feels increasing pressure to respond to the concerns of some elements of the middle class and growing numbers of urban poor who have suf- fered under his socialist policies. But he also must deal with resistance to his reforms by entrenched political interests that he has co-opted, including other segments of the middle class, and most government technocrats and officials of state-run enterprises. We believe that Ratsiraka's divided but increasingly criti- cal political opposition mirrors these pressures both for and against reform. His balancing act is made more delicate by subsurface strains of ethnic rivalry between the highlanders, the traditionally prominent Merina and Betsileo ethnic groups, and the other, mostly coastal, less influential ethnic groups, collec- tively referred to as the cotier who compete for political and economic dominance in the capital. Dabbling in Economic Reform Ratsiraka's socialist experiment produced many fail- ures?including chronic shortages of food and con- sumer goods?that have led him to face the need to attack such problems as mismanaged state enter- prises, lack of producer incentives, poor distribution networks, and black marketeering. The US Embassy reports that the scarcity of domestically produced food has resulted in malnutrition, increased cattle rustling and crop thefts, and a weakening social structure in which the elderly, especially, suffer. We believe that the regime's failure to regain self- sufficiency in rice?the main dietary staple?remains one of Ratsiraka's chief concerns. In an effort to reverse the economic decline, according to US Embassy reporting, Ratsiraka in 1982 installed a team of pragmatic economic technocrats to launch a Secret ALA 86-10045 October 1986 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Strategic Overview Madagascar, slightly smaller than Texas, is located some 300 miles off the east coast of Africa near major Indian Ocean shipping routes. Its size, loca- tion, and variety of natural and mineral resources make the country, independent since 1960, attractive to both the West and the Soviet Bloc. Madagascar's colonial experience, however, together with French dominance well into the _first decade of independence, has soured the Malagasy on foreign involvement in their national affairs, according to academic studies and US Embassy reporting. For over a decade after independence, Madagascar granted the United States and France access to local facilities. The United States received permission in 1963 to construct a NASA satellite, tracking station near the capital of Antananarivo, but, when relations with Washington began to cool, the Ratsiraka regime closed down the installation in 1975. France contin- ued to station its Indian Ocean military forces in Madagascar until the early 1970s, primarily at the naval base at Antsiranana (Diego Suarez) and at Iavoto military ailfield near the capital. Antananarivo terminated its military accord with Secret 2 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Paris in 1972 for nationalistic reasons, and French forces relocated to nearby Reunion and Mayotte. The waning of Western influence, at a time when Madagascar began to turn increasingly toward so- cialism, opened the door for Soviet offers of military assistance, through which Moscow almost certainly hoped to gain access to the military facilities vacated by the French. Although these probably are not vital to Soviet naval operations in the region, we believe that access to Diego Suarez would enhance Moscow's military capabilities in the southwestern Indian Ocean. Despite Ratsiraka's leftist orientation and his acceptance of Soviet military assistance since 1975, his xenophobic regime thus far has firmly denied Soviet forces access to Malagasy military facilities. Academic studies and US Embassy reports indicate that Madagascar possesses a rich variety of minerals, but these are scattered and relatively inaccessible; Madagascar's mineral wealth has yet to be profitably exploited. Mining is hampered by reduced world demand and transportation difficulties. Mineral ex- ports?primarily chromite, graphite, and mica? make up less than 5 percent of total export revenue. There also are proven resources of nickel, bauxite, iron, ilmenite, and uranium that Malagasy officials hope will become of greater commercial interest as an alternative to South African reserves, according to the US Embassy. Madagascar has not yet exploited its scattered deposits of beryl, used in missile nose cones and brake drums of high-performance aircraft, mainly because of excessive costs. Madagascar has significant energy deposits of coal, lignite, oil shale, and tar sands. Profitable exploita- tion of coal reserves?estimated at 1 billion metric tons?now is prohibited by high mining and transpor- tation costs. Petroleum exploration has been under way since the 1960s and several Western oil compa- nies have sunk exploratory wells. Given present low world oil prices, however, we believe that these operations are uneconomical and will be cut back. 3 modest structural reform program in line with recom- mendations by the International Monetary Fund (IMF) and the World Bank. Embassy officials observe that some of his moves to reduce state control in industry, transportation, and the predominant agricul- tural sector appear promising, but probably will force cuts in government employment. We believe that Ratsiraka's boldest moves have been in liberalizing the policies as well as the administration of the key rice subsector, which Embassy officials say is rife with cronyism and corruption. The government has in- creased producer prices, relaxed pricing and market- ing controls, and reluctantly agreed to IMF restric- tions on rice imports. The Embassy comments that following through on pledges to the World Bank to deregulate the rice market completely will require considerable political persuasion by Ratsiraka to over- come opposition to these moves by proponents of socialism. Ratsiraka is attempting to make structural changes in other areas of the economy as well. The US Embassy reports that the regime has liberalized general import and export procedures in an effort to encourage private initiative; more significantly, in our view, it is opening up new sectors of the economy to private enterprise, both local and foreign. Ratsiraka also is promoting a revised investment code in an effort to attract greater Western investment to Madagascar. The code, drawn up under prompting by international financial institutions in 1984, subsequently was wa- tered down because of political pressure in the legisla- ture and was adopted last year only after considerable lobbying by the President But Still a Socialist Authoritarian at Heart Ratsiraka's desire to maintain his image as a forceful socialist leader and to limit criticism from the left probably means he will not go much beyond these modest initiatives for now. His public statements indicate he wants to mold Madagascar into a society similar to North Korea, which he greatly admires. US Embassy reporting indicates that the government still considers the President's philosophy, published in 1975 as the "Charter of the Malagasy Socialist Revolution" and focusing on opposition to capitalism Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Malagasy Ethnic Groups The admixture of settlers from Malaysia, Africa, and Europe has produced about 20 ethnic groups unique to Madagascar, although the differences between these groups often are very subtle. The major division is between the predominately Malayo-Indonesian eth- nic groups of the central highlands and the coastal peoples?collectively referred to as the cotier?large- ly drawn from Sub-Saharan Africa. Despite histori- cal and physical differences, however, the Malagasy people as a whole share a common language, social values, customs, and a veneer of Christianity that overlies traditional practices of ancestor worship. The central highlanders historically have been the best educated and most influential of the ethnic groups. One highland group, the Merina, accounts for almost 16 percent of the Malagasy population. By the early 1800s, the Merina kingdom had subjugated most of the other ethnic groups and established its political hegemony over the entire island. The Mer- inas developed a relatively modernized, Western-style society, and successfully resisted French attempts to colonize Madagascar until the end of the century. The importance of ethnic identities declined during the colonial and early postindependence periods as Malagasy nationalism began to take root. We believe, however, that the emerging social divisions between the highlanders?the Merinas and related Betsi- leos?and the cotier have since assumed greater political significance. President Ratsiraka, a Betsi- misaraka from the eastern coast, developed his so- cialist revolution primarily to promote the welfare 'of the more disadvantaged cotiers, according to US Embassy reporting. This in turn has exacerbated ethnic and class tensions between the ethnic groups. The capital, located in the highlands, has been inundated with cotier migrants seeking employment and improved living standards, raising concern among the highland peoples over challenges to their privileged positions. Increasing joblessness and social decay, combined with distress over the general eco- nomic malaise, contribute to acts of urban violence that, in our view, often take on ethnic and political overtones. Several small groupings of Asian and Muslim peo- ples have not intermingled with the Malagasy. Their aloofness and industriousness provoke popular re- sentment against them, particularly since they have managed to prosper by engaging in small private trade activities?such as textiles?even after the advent of socialism, according to US Embassy report- ing. Political opposition groups have been exploiting this resentment, stressing the possibility that Ratsiraka 's loosening of the economy will redound to the further benefit of these nonindigenous groups. and "neocolonialism," to be the ultimate doctrinal framework for Madagascar's future. Moreover, in his New Year's speech in January 1986, Ratsiraka em- phasized he would not abandon his socialist ideals, although for the first time he openly acknowledged the country's economic troubles. The government still controls the principal sectors of the country's economy. Private companies national- ized in the mid-1970s remain under state control and the government holds majority shares in 70 percent of the major companies, including foreign ventures en- gaged in oil exploration. Although the revised invest- ment code offers a larger role to the private sector in industry, agriculture, and tourism, it reserves for state Secret control economic activity in certain key sectors, including banking, energy, and mining. In contrast to some lessening of centralized control over the economy, Ratsiraka continues to circum- scribe most political activity through a mix of organi- zational control and restrictive policies. the Supreme Revolutionary Council?composed of the President and political and military officials and nominally constituting the pri- mary executive decisionmaking body?is in fact dom- inated by Ratsiraka and exerts little influence on 4 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 , ? Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 policy. All Malagasy political parties are required under the Constitution to belong to the National Front for the Defense of the Malagasy Socialist Revolution, a political umbrella organization created by Ratsiraka, and must formally support his socialist platform to have representation in the National As- sembly (see appendix). Ratsiraka's Advance Guard of the Malagasy Revolution (AREMA) party, which has a broad base of support among a variety of ethnic groups, is the dominant member of the seven-party National Front, according to US Embassy reporting. We refer to the other six National Front parties as the opposition. The government censors the press and tolerates criticism of official policies only within the institutional framework of the National Front. Secret South African air and naval threats to Malagasy territory. The equipment, capable of monitoring the communications and locations of Western ships and aircraft throughout the southwestern Indian Ocean region, was installed at three sites?Toamasina (Ta- matave), Diego Suarez, and Majunga Playing to Both East and West Ratsiraka is attempting to strike a balance between West and East, probably in the hope of gaining as much aid as possible from both sides. According to US Embassy reporting, he is cautiously trying to attract much-needed Western investment and eco- nomic assistance without provoking the Soviets to cut back their military aid or undermining what he perceives to be his standing as a nonaligned, Third World leader. Ratsiraka, for example, balanced his trips in 1985 to Washington?his first since he as- sumed the presidency?and to Paris, with subsequent trips to Moscow, P'yongyang, and Beijing. Ratsiraka also appears to be attempting to patch up his often prickly relations with France. Although he had ig- nored such meetings in the past, Ratsiraka again traveled to Paris in February 1986 to make an unprecedented appearance at a conference of French- speaking nations. He also held discussions in Paris on continued French economic support and bilateral relations, according to the US Embassy. US officials at the United Nations note that Madagascar is slowly moderating its previously pro-Soviet voting record. In what we believe was a litmus test of his new evenhandedness, Ratsiraka responded early last year to a US request to dismantle three Soviet-supplied signals intelligence sites (see figure 3). The US Em- bassy reports that the Soviets provided the intercept equipment through East Germany in response to Ratsiraka's plea in 1983 for assistance in detecting 5 tThe installations appeared vir- tually complete by mid-1984 and we believe the intercept network was on the verge of becoming operational by the time Ratsiraka responded to the US demarche. The last site was dismantled in early 1985, although the equipment remains in storage in the country. Ratsiraka may have calculated that dismantling the network would increase Madagas- car's chances of obtaining greater amounts of West- ern economic assistance. Ratsiraka has made other gestures toward the West. For example, Ratsiraka in early 1986 allowed a French naval training vessel to call at two ports, the first official calls by a Western power since he became President. Ratsiraka, if pressed, probably would claim the French visits technically are consistent with Malagasy policy be- cause Paris administers the Indian Ocean island of Reunion as an overseas department of France and thus can be considered a littoral power. But Dependence on the Soviets Remains Just as Ratsiraka's economic reform policies are constrained by his socialist convictions, we judge that his political shift toward a genuinely nonaligned posture is tempered by his heavy dependence on Moscow for military aid. The record reveals that over the past decade Ratsiraka has relied largely on Soviet assistance to help train, maintain, and equip the present 21,000-man Army and 500-man Aeronaval Forces. The Soviets also provide, fly, and maintain the six military cargo aircraft used to transport military supplies throughout the country and, given the deteri- orating state of Madagascar's roads and railways, the government probably views this as a vital service. Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Sluggish Economic Recovery Madagascar is one of the world's poorest countries, with per capita GDP of about $240, and the country's infrastructure?in- cluding irrigation systems, roads, ports, and rail- roads?is in shambles. Agriculture dominates the Malagasy economy, supplying most of the country's food and raw materials for local manufacturing. The agricultural sector employs 87 percent of the labor force and provides over 80 percent of foreign ex- change earnings. The major export crops?coffee, vanilla, and cloves?contribute over two-thirds of total export receipts. Local industries include food processing, textiles, and clothing. The government's socialist-oriented policies during the 1970s were designed to reduce foreign involve- ment and increase state control over economic activi- ty. These policies?particularly under Ratsiraka? included nationalization, the imposition of various administrative controls, and prudent balance-of-pay- ments, public finance, and external debt management. Economic growth, however, was slow and erratic, averaging less than 0.5 percent real growth annually. Ratsiraka 's policies significantly reduced the poten- tial for economic growth, in our judgment. The government generally fixed agricultural prices at levels that provided little incentive to producers, while its cumbersome import and export procedures inhibited foreign trade. Government investment poli- cies severely restricted the role of the private sector, while inefficient public enterprises became a heavy burden on the government budget. Ratsiraka attempted in 1978 to reverse the economic stagnation by implementing an extensive public-sec- tor investment program that, in our view, largely contributed to Madagascar's current financial difficulties. The investment program was poorly planned and contributed little to Madagascar's pro- ductive capacity, As a result, both the government budget and current ac- count deficits grew considerably by 1980. The govern- ment financed these deficits primarily through in- creased external borrowing with little heed to the repayment burden. Spiraling increases in debt service payments, in conjunction with only meager growth in productive capacity, contributed to a critical shortage of foreign exchange. The Shift Toward Reform The regime in the early 1980s embarked on a struc- tural reform effort with IMF and donor assistance, with the goal of stimulating economic growth and easing the foreign exchange shortage. Madagascar has been working closely with the World Bank to liberalize its rice marketing system, for example. Major IMF-backed adjustments have included in- creases in agricultural producer prices and some decontrol of prices in the manufacturing sector, the introduction of a flexible exchange-rate policy, and additional measures to improve fiscal, monetary, and balance-of-payments performance. We believe Ratsir- aka's recent decision to completely liberalize the rice trade and his pledges to implement additional agri- cultural reforms have increased donor confidence that the government will continue along the desired path. Multilateral and bilateral donors?France is the major single-country donor?have committed $630 million for the 1986-87 period, surpassing the 1983-85 annual average by 50 percent. Madagascar's economic indicators (see figure 2) re- veal that Ratsiraka has been partially successful in reversing the erosion of the economy. Declines in real GDP were reversed in 1983, although real GDP in 1985 was no higher than it was in 1971. Budget Secret 6 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Ratsiraka also looks to the Soviets to help meet about half of the country's total fuel requirements at least through 1987 deficits have declined notably and inflation was running at about 11 percent in 1985, down from 29 percent in 1982. Current account deficits also have been reduced, but the overall balance-of-payments position remains weak because of poor export perfor- mance and heavy debt service payments. Moreover, the standard of living for the Malagasy people has generally deteriorated. Per capita GDP in 1985 was only about 80 percent of the level achieved in 1980, while wages have fallen 50 percent against the cost of living IMF standby arrangements have contributed to falling living stan- dards by raising the price of imports and utility services, restricting government hiring, and tightening credit. Without additional donor support and further eco- nomic policy reforms, we believe that Madagascar's economy will experience stagnant or negative eco- nomic growth and financial deterioration. Madagas- car almost certainly will require substantial external assistance into the 1990s because of the funds it will require to meet unmanageably large debt service obligations, as well as for imports, if per capita GDP is to resume some growth. High world coffee prices, falling oil prices, and increased donor commitments brighten the near-term perspective. We believe longer term economic gains and continued donor support hinge on Ratsiraka 'S willingness to utilize fully poli- cy adjustments already in place. They also depend on his willingness to embark on a more rigorous?but politically risky?effort to restructure the economy along market lines, stimulate exports, make public enterprises more efficient, and encourage foreign in- vestment. In our judgment, significant increases in foreign investment will depend on how Madagascar packages its few profitable economic ventures and, thus, assuages the concerns about the government's commitment to foreign investors. 7 While plummeting world oil prices may reduce some- what the leverage the Soviets once expected to gain by providing oil, Moscow's ability to pressure the govern- ment by playing its military card is almost certainly worrisome to Ratsiraka. A US Embassy officer notes that Soviet officials in Madagascar often attempt to intimidate and bully the government in an effort to extract new concessions?such as allowing an increase in the number of technical advisers. They employed these tactics, for example, in early 1985 after the government had made a gesture favorable to the West of permitting Western naval ships to call unofficially with humanitarian assistance following a cyclone, according to US Embassy officials. Despite apparent setbacks in relations as a result of Ratsiraka's warming to the West, Moscow, at least for the moment, does not appear to see a substantial threat to its basic interests in the country. We believe that the Soviets have four primary policy objectives in Madagascar: reducing Western influence, denying Western access to Malagasy facilities and gaining Soviet access, obtaining Malagasy diplomatic support for Soviet initiatives elsewhere, and building long- term influence in key Malagasy institutions. The record shows that Moscow's military advisory, supply, and training relationship is its favored and most effective instrument for pursuing these goals in Mad- agascar and other socialist African states.: Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Figure 2 Madagascar: Economic Indicators, 1981-85 Note changes in scale Real GDP Growth 5 0 ?5 Major Sectors of the Economy Percent as a Share of the GDP, 1985 ?10 1981 82 83 84 85a Percent Agriculture, 43 Industry, 15 Services, 42 Total Debt Service as a Share of Exports b 100 Percent Total Debtb 3 75 50 25 0 1981 82 83 84 85 Billion US $ 2 1 0 1981 82 83 84 85 Current Account Deficit as a Share of GDP 20 Percent Inflation Rate 40 1981 82 83 84 85a a Estimated. b CIA estimates. Central Government Deficit Percent as a Share of GDP 20 30 20 10 0 Unless noted, source: IMF. Secret Percent 15 10 5 1981 82 83 84 85a 0 1981 82 83 84 85a 8 310622 1086 25X1 - Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 _ 25 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret we judge it will continue to use military largess to maintain its military advisory presence in Madagascar. In the context of Moscow's broader interests, we believe that Madagascar, like the other southwestern Indian Ocean island states, is relatively less important than Angola, Ethiopia, and South Yemen, where the Soviets have devoted major resources and gained considerable political influence and varying degrees of military access. 9 Facing the Challenges As Ratsiraka seeks to gain breathing room to deal with Madagascar's economic plight, we believe he will face increasing pressure from a variety of interest groups that, if not adroitly managed, could over time threaten his rule. Complicating his task, in our view, are Ratsiraka's often exaggerated and sometimes Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Military and Economic Assistance to Madagascar The Soviet Union and its allies are the primary suppliers of military assistance to Madagascar. From 1976 to 1985 Soviet Bloc countries had agreed to provide $35 million in military assistance, of which about $13 million worth has been delivered, accord- ing to the latest available data. The US Embassy reports that Soviet deliveries in 1985 included light tanks, armed personnel carriers, a cargo transport aircraft, a troop transport helicopter, and spare parts and communications equipment. About 70 Soviet advisers are attached to the Army and the Aeronaval Forces, and between 40 and 60 North Koreans pro- vide training on North Korean?supplied combat air- craft in the Malagasy inventory. East Germany and Cuba in the past provided advisers to the internal security service, according to the US Embassy. In 1985, approximately 170 officers received training in the Soviet Union, and 96 received training in France. That same year, about 33 Army officers were trained in the Soviet Union, while probably a smaller number went to France. The US Embassy also reports that France provides a handful of advisers to assist at the naval repair shipyard at Antsiranana (Diego Suarez), has supplied the Army with vehicles, ammunition, uniforms, and radio equipment and, in late 1985, delivered a land- ing craft to the Aeronaval Forces. In 1985 the United States initiated a $2 million Military Assistance Program. In addition, a small US Navy Seabee unit is assisting the Malagasy Army engineer forces. The West supplies the bulk of economic aid to Madagascar, used for balance-of-payments support and project assistance. France continues to provide the greatest amount of bilateral assistance?close to $100 million annually, according to the US Embassy. Other leading Western donors?Japan, West Germany, and Canada?contributed a combined to- tal of almost $177 million during the period 1980-83, according to the latest available data. During the same period, multilateral agencies gave over $300 million. In terms of project assistance, the People's Republic of China and Switzerland follow France as major aid donors. The United States increased assis- tance levels to $19 million in 1985 alone, having provided about $35 million between 1980 and 1983. Between 1980 and 1984 the Soviet?Bloc extended close to $ 430.4 million in credits and grants, but the Malagasy thus far have drawn on only a small portion of this aid. More recently, the Soviets provid- ed credits for oil imports, and they supply almost half the country's fuel requirements under an agree- ment that probably expires at the end of 1987. The US Embassy estimates that overall Malagasy indebt- edness to the Soviet Union is between $250 million and $300 million. France provided 588 civilian technical advisers to Madagascar in 1980, but budgetary restrictions for 1986 have cut that number to about 430. The US Embassy estimates that in 1985 the Soviet Union provided about 130 technical and educational advis- ers. North Korea had 25 agricultural technicians; North Vietnam, 47 professors; and East Germany, 15 communications technicians and four professors in Madagascar that same year. In 1984, the latest year for which data are available, 285 Malagasy scholar- ship students were studying in Eastern Bloc coun- tries. Secret 10 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 irrational perception of the threats he faces and his deep-seated fear of assassination, according to US Embassy reports. One example of his often skewed perception of events is his belief that the possibility of South African aggression?in retaliation for his al- lowing the African National Congress to open an office in Antananarivo in the late 1970s?is the single greatest threat to national security. Driven by a unique set of ideology and fears, he overreacts, often unpredictably, to both real and imaginary threats to his position; thus far this behavior has effectively cowed any opposition, according to US Embassy officials, but a serious miscalculation on his part could have repercussions he may be unable to control. Divided Political Opposition Ratsiraka's political opponents remain divided and preoccupied with parochial issues; in our view, they offer no major challenge to his leadership at present. US Embassy officials note that opposition leaders have only narrow bases of support and thus lack sufficient national stature to wield significant clout. The President apparently has been successful in using the powers and privileges of his office to manipulate the opposition, keep it divided, and co-opt its leaders to participate in the government-controlled political system. He skillfully neutralizes threats from these opponents by placing them under surveillance and encouraging defections to his own party, according to a US Embassy official. Ratsiraka probably fears, however, that over the longer term the opposition groups?most of which are socialist in orientation? might find common cause against him if he turns too abruptly to the West or is unable to assuage popular discontent over the decline in living standards that result from economic reform measures. Ratsiraka's efforts over the years to establish a one-party state apparently were intended to either co-opt or preempt latent oppositioni most of the Mala- gasy political parties continue to oppose policy shifts that would repudiate Madagascar's form of socialism 11 Secret and bring in greater foreign influence. According to the US Embassy, the Marxist, Soviet-funded Con- gress Party for Malagasy Independence (AKFM), which has support in the capital and among urban intellectuals, is critical on ideological grounds of initiatives to open up the economy. More serious from Ratsiraka's point of view is the potential threat posed by two populist parties?the Militants for the Estab- lishment of a Proletarian Regime (MFM) and the National Movement for the Independence of Mada- gascar (MONIMA-K). US Embassy reporting sug- gests that these parties over time might seek to play on Malagasy xenophobia to foster popular resentment over the new opportunities for foreigners and minority ethnic groups to benefit from liberalization measures. According to press reports, the small, hardworking Asian and Muslim communities already are viewed among the generally less industrious populace as having a stranglehold on the limited private sector. We believe that Ratsiraka feels pressure from the right end of the political spectrum as well. Some members of the opposition, almost certainly the mi- nority, charge that he is not going far enough with his reforms./ Even though we believe that the opposition parties in the National Front for the moment pose little threat to Ratsiraka, a US Embassy official has noted that the President tends to overestimate their strength and unity because he is concerned about factionalism within his own AREMA party. We believe this concern has been a factor in Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Didier Ratsiraka: Profile of an Enigmatic Leader Didier Ratsiraka is 49 and in good health. He often displays such erratic and unpredictable behavior that, according to one US diplomat, "nobody knows what makes him tick." He is intolerant of corruption and, unlike many other African leaders, has not surrounded himself with members of his family or the Betsimisaraka ethnic group to which he belongs. Reporting from a variety of Western diplomats pre- sents a portrait of a complex, erudite individual capable of articulate, reasoned arguments?yet prone to wild harangues at subordinates when angered. At times suave and charming The US Embassy reports that he has no close advisers, treats subordinates with disdain, distrusts everyone, and is quick to blame others for his mistakes. Despite his personal quirks, he appeals to the psyche of the docile Malagasy who, in our view, generally respond more favorably to forceful leadership and a commanding presence than to personal charm. Ratsiraka was raised a Roman Catholic and claims to read the Bible regularly, but he also shares the traditional Malagasy belief in the occult,l /The President has a well-known, deep-seated fear of assassination- and he always surrounds himself with bodyguards during his infrequent public appearances. Egocentric World View According to US diplomats, Ratsiraka fancies him- self an international statesman, and yet, like most Malagasy, he distrusts all foreigners. US Embassy 25X6 causing him to implement his reforms at a slow pace. His efforts to preserve AREMA's dominance will continue to influence the timing and scope of the economic reform program, in our view. Social Pressure US Embassy officials say that the passive and apa- thetic nature of the Malagasy people continues to work in Ratsiraka's favor and tends to mute popular reaction to the harsh effect of the current economic reforms. Ratsiraka is well aware, however, that popu- lar tolerance has limits; he remembers the aberrant violent popular reaction that has flared twice since independence when Malagasy governments failed to alleviate intolerable economic conditions. In 1972, laborers, peasants, and the unemployed joined in Secret student strikes that culminated in bloody clashes in the capital and forced the dissolution of the govern- ment of Madagascar's first President, who turned power over to the Army. His successor was no more adept at improving the economy, and a combination of riots, strikes, and an ethnically motivated military coup plot prompted his resignation in early 1975. In our view, Ratsiraka knows he must keep a close eye on the popular response to his limited reforms as the social costs begin to mount. The price of rice, for example, although now stable and fairly low, fluctuat- ed by almost 200 percent for a few months after the 12 25X6 25X6 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret officials explain his willing dependence on Soviet military assistance in part by his fear of South African aggression. These same officials report that, although the President dislikes the French, he proud- ly quotes from Gallic literature and philosophy. He delivered his keynote speech to the 1986 Francophone summit in impeccable French, according to US Em- bassy reporting. US Embassy reporting also indicates that he, like most Malagasy, feels culturally and racially superior to black Africans because of Madagascar's unique ethnic heritage. He views Afri- can forums, however, as a stage upon which to play an international role. Ratsiraka apparently does feel an affinity for North Africa?particularly Algeria? because of similar colonial experiences, and often dons a long white cape in imitation of Algerian President Chadli Bendjedid. US diplomats report that Ratsiraka admires North Korea for the disci- pline and productivity of its society, and would like to build for himself a personality cult like that of President Kim ll-Song. Childhood and Early Career The son of a senior colonial civil servant, Ratsiraka attended the best schools in Madagascar where, because of his cotier background as a member of the coastal Betsimisaraka ethnic group, he was exposed early on to discrimination by the socially advantaged Merina and developed a resentment for colonial elites as well as a drive to excel. Prior to independence in 1960, he studied at the French Naval Officer's school and was commissioned into the French Navy. Embas- sy officials believe that Ratsiraka's exposure to European socialism through his contacts with the intellectual left in Paris in the 1960s helped to form the basis of his own political ideals. After he returned to Madagascar, he served as Commander of the Navy. He was Minister of Foreign Affairs during 1972-75. When President Ratsimandrava was assas- sinated after only six days in office in early 1975, Ratsiraka became part of the interim National Mili- tary Directorate before his election as President in December 1975. He was reelected to a second seven- year term in late 1982. Ratsiraka was promoted to the rank of admiral by a vote of the legislature in 1983, although he is no longer active in naval affairs. His wife, Celine, is an outspoken woman who heads Ratsiraka's faction within his own AREMA party. regime relaxed price controls to match free market prices, hurting urban consumers who had grown used to subsidies for this dietary staple. The US Embassy further reports that deregulation of rice distribution has resulted in an often irregular supply from inacces- sible rural markets to urban centers. In addition, rural migrants to the cities are now flooding the job market, causing a further drain on social services and increas- ing the crime rate in the overcrowded capital. US Embassy reporting indicates that urban anger toward government institutions periodically runs high and erupts into isolated strikes and small-scale demonstra- tions and clashes, which, however, the security forces quickly quash. despite these minor eruptions the generally declining standard of living thus far has failed to spark a significant political backlash among the public. The record shows that, unlike his predecessors, Rat- siraka is actively working to improve economic condi- tions and to avoid serious domestic unrest through a mix of concrete actions and political persuasion. We believe that some of Ratsiraka's decisions, such as negotiating with Western donors and international financial institutions for buffer stocks of imported rice, may help to soften the adverse effects of reform measures on living standards. He also has given numerous assurances to Western donors that he in- tends to pursue economic liberalization, which inter- national financial institution officials believe will help Madagascar achieve minimal self-sufficiency in rice and other agricultural products in three to five years. According to the US Embassy, most Malagasy elite 13 Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Figure 4. View of Antananarivo \??,` now appreciate the difficulties posed by the current economic crisis and appear to accept the need for reforms. Further, US Embassy reporting indicates that, since Ratsiraka's acknowledgement of the trou- bled economy in his January 1986 speech, the popu- lace has appeared content to wait for economic condi- tions to improve. We believe Ratsiraka has learned from the past and is determined not to make the missteps that helped topple his predecessors. In our view, Ratsiraka is a cunning politican who has the skill and resourceful- ness to contain potentially threatening unrest over the next few years. According to US Embassy reporting, Ratsiraka thus far has managed to prevent large-scale violence largely through a mix of authoritarianism, political persuasion, timely concessions, and, as a last resort, a willingness to use force against opponents. For example, a US Embassy official notes that in 1985 a harsh security clampdown against a vigilante group effectively intimidated the populace and rein- forced Ratsiraka's image as a strong leader. extreme distrust of foreigners, but may also indicate his sensitivity to the potential for politicization as the forces are used more often for internal security. We have reports of occasional morale problems in the military but, according to US Embassy reporting, Ratsiraka effectively curtails mili- tary dissent by shuffling assignments and by detain- ing, surveilling, or retiring potential troublemakers. His success in retaining the loyalty of his security forces probably results also from his efforts to assign command positions evenly among the ethnic groups and to balance priorities and resources among the three main components?the 21,000-man Popular Army, the 500-man combined Aeronaval Forces, and the 5,000-man National Gendarmerie. For example, udi- The Role of the Military and Soviet Influence The transition from French to Soviet influence in the armed forces over the past decade has had no discern- ible effect on the-character of the military, which we believe remains apolitical. Ratsiraka nevertheless takes pains to assure the loyalty of the officer corps and to minimize the potential for Soviet meddling in armed forces affairs. His concern probably reflects his Secret ciously divided the Soviet shipment of armored vehi- cles delivered in mid-1985 between the Gendarmerie and the Army. These tactics appear to be paying off. Last year the Army and Gendarmerie demonstrated a high degree of cooperation and support for the regime in a joint internal security crackdown. We have seen no sign that the security forces oppose Ratsiraka's overtures to the West, and we believe they will continue to support the regime as long as their 14 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret interests and the means to carry out their mission are protected. In the unlikely event Moscow were to sever its ties to Ratsiraka and stop the flow of assistance, however, military morale and backing probably would plunge. Ratsiraka almost certainly is aware that military support for the regime is to a great extent contingent upon his ability to obtain external military assistance. Rat- siraka has put out tentative feelers to the West in a bid for some military equipment and security assis- tance. He may be gambling that improving relations with the West, and with France in particular, will provide him alternative sources of military assistance should Moscow cease deliveries. present position or long-term goals in the region, and seem willing to do their best to protect their equities in Madagascar. / On the basis of Moscow's record of dealing with other self-styled socialist Afri- can states?such as Guinea, Mali, and Congo?that are dependent on both Soviet military assistance and Western economic aid, we believe that the Soviets will continue to mark time in Madagascar. While the Soviets almost certainly are seeking at least to main- tain their contacts in the Malagasy military, ( The President has taken a number of steps to circum- scribe Soviet influence. the approximately 70 Soviet advisers now in the country are primarily confined to sectors where they have little access to key military decisionmakers. J we cannot rule out future Soviet med- dling in internal affairs as circumstances change. appointed pro-Western officers to key Outlook command positions in the Air Force./ Over the past year or so, Ratsiraka has made other moves to monitor the Soviets. that the government has denied Soviet advis- ers access to military air facilities currently under construction. \ We doubt that Moscow intends to react punitively to Ratsiraka's actions. The Soviets probably do not view these precautionary moves so far as injurious to their 15 President Ratsiraka probably will be able to balance competing domestic and foreign interests successfully and remain in power over the next two to three years. He has survived for over a decade because of a combination of factors that we expect to prevail at least until the presidential election in 1989: ? Although Ratsiraka is not popular, he is widely feared and respected, and, as an elected leader, his legitimacy is unquestioned. ? The President's political opponents have been un- able to develop a broad base of national support, and they are unlikely to do so over the near term, in our view. No other political leader or party at this time represents the spectrum of ethnic, political, and social interests found in AREMA under Ratsiraka's leadership. ? Ratsiraka's candor in addressing the economy and his efforts to stem the decline probably have won a grace period from the public and he should have some time to implement the planned reforms. Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret ? Military backing for Ratsiraka is likely to continue if, as we believe likely, Ratsiraka can assure a reasonably steady flow of military assistance and continues to distribute resources evenly. International financial officials believe that the cur- rent gloomy economic picture could begin to brighten over the next few years if Ratsiraka presses on with reform. While austerity will continue to be felt over the near term, we believe that the people already have absorbed its harshest effects. Popular unrest should diminish further if Ratsiraka's reforms begin to edge living standards upward over the next year or so. With rice prices now stabilized at fairly low levels, the regime will have greater freedom to introduce struc- tural reforms in other sectors of the economy where the impact on living standards will be less painful. External assistance will continue to be instrumental in assuring the government's stability. As long as Ratsir- aka continues to implement his economic reforms, Western donor confidence in the regime should re- main fairly high. We expect Ratsiraka to seek to ensure continued development assistance from the West by improving his relations with the United States and France. We foresee no major changes in relations with Moscow, at least for the near term, and believe Ratsiraka will avoid any actions?such as granting port visits for Western naval ships?that could induce the Soviets to increase pressure on him for similar privileges or to curtail or cease their military assistance. Ratsiraka will continue to rely on Moscow to meet his military needs, but he also may explore options for gaining some Western military assistance as a hedge against a change of heart by Moscow. Scenarios for Change If Ratsiraka fails to balance competing domestic and foreign interests in order to maintain stability, or if his sometimes erratic behavior leads him to misstep badly, we see two scenarios for a change of leadership that could come into play. Popular Uprising. We believe that the government could be brought down if either economically or politically motivated urban demonstrations and Secret violence got out of hand, although Ratsiraka's government is better positioned today to preempt such a develop- ment than were the governments of 1972 and 1975. A combination of events?such as a government failure to ensure adequate food supplies or a brutal crack- down against opponents?could lead to widespread urban unrest. If, in such circumstances, the military lost confidence in the government and failed to con- tain the violence, we judge that the President would be compelled to resign.' At present we believe there is no more than a low to moderate chance of such a scenario developing within the next two or three years. If violent social unrest were about to precipitate a government collapse, we see the possibility that, rath- er than follow the constitutional procedures instituted in 1975, Ratsiraka could follow earlier precedents and turn power over to the military in an effort to restore order. We judge that the military probably would not seek to retain power, but rather, as it did in 1975, would govern for an interim period until a new government, possible comprising both military and civilian officials, could be formed. We do not know who would eventually assume power under this sce- nario. We believe, however, that a successor regime would not cut off the country's military ties to Moscow. An inexperienced military leadership, or a civilian leadership from the more populist political parties?such as the MFM and MONIMA-K?most likely would continue Ratsiraka's pragmatic balanc- ing of economic and military interests to assure both Western and Soviet Bloc support. On the basis of the public record of the parties to date, an AKFM-based regime almost certainly would align more closely with Moscow, while a VONJY-led government would turn more to the West. ' The Malagasy Constitution provides that in the event of the president's resignation, incapacitation, or assassination, the dean of the Supreme Revolutionary Council (SRC) is to assume government control until an election, which must be scheduled within the next 60 days, is held. The current dean of the SRC is Arsene Ratsife- hera?a staunchly pro-Soviet leading member of the Congress Party for Malagasy Independence. 16 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Military Coup or Assassination. Chances are good that the armed forces would move against Ratsiraka if his more moderate economic and foreign policies provoked a cutoff in Soviet aid. If the military toppled the regime, we believe, on the basis of precedent, it would eventually form a government that would include civilians, possibly opposition leaders and tech- nocrats from Ratsiraka's government. Any new gov- ernment would be sensitive to the military's interests and most likely would seek to restore ties to Moscow to ensure a flow of military assistance Ratsiraka, mindful that his immediate predecessor was assassinated during a chaotic transition of power one week after assuming the presidency, has built up his personal security regiment and has carefully guarded his public movements. Despite his security precautions, however, Ratsiraka could be assassinat- ed, a development that almost certainly would usher in a period of uncertainty during which moderate and radical political elements would contend for power. We believe that the military, if it deemed it necessary, would step in to restore order, and probably would have a major voice in designating a new government in order to ensure that the government would be favorable toward the military's interests. Implications for the United States Ratsiraka's continuing efforts to balance competing interests will provide increasing opportunities for the United States and the West to counter Soviet influ- ence in the region. Soviet involvement in Madagascar probably will remain at current levels as long as Ratsiraka can assure stability and resist Moscow's pressure to expand its presence and obtain access to Malagasy air and naval facilities. Although US Em- bassy reporting indicates that Ratsiraka would like to allow Western naval ships to call, he undoubtedly will continue to deny access to all nonlittoral powers both to maintain his nonaligned credentials and to forestall Soviet requests for reciprocity. We believe this situa- tion helps assure continued safe passage for Western ships transiting nearby Indian Ocean shipping lanes. Reverse Blank 17 To a large extent, the interests of the United States in Madagascar will continue to overlap those of France. The US Embassy reports that, because of France's island possessions of Reunion and Mayotte, Paris seeks to preserve Western influence in the southwest- ern Indian Ocean and is willing to provide large amounts of economic assistance to Madagascar, in part to woo Malagasy cooperation. We expect that France will remain the preeminent source of Western influence in Madagascar as Franco-Malagasy rela- tions quietly continue to improve. At present, we believe that, although US political influence in Mada- gascar is growing because of Ratsiraka's moves to- ward a more genuinely nonaligned posture, US com- mercial leverage will remain far behind that of France because of both Madagascar's remote location and limited export base. Ratsiraka's suspicious nature will keep him wary of Soviet involvement in Madagascar. He is likely to circumscribe internal Soviet activity to the extent possible without risking the loss of military assistance. If Ratsiraka loses his grip on power, which we judge to be unlikely at least for the near term, successor regimes would require substantial backing from the military, and therefore would be reluctant to reduce ties to Moscow further. Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Appendix Profile of the National Front Most existing Malagasy political parties were formed?some clandestinely?during the latter part of the colonial era. Despite ideological differences, the parties shared a desire for Malagasy independence and an impulse of staunch nationalism as a way to overcome entrenched French interests. As they achieved their common goals with Madagascar's movement away from France and toward greater control over its own affairs, this broad consensus eroded. The parties fragmented and their popular support waned. Shortly after coming to power Ratsir- aka established the broad-based National Front for the Defense of the Malagasy Socialist Revolution as a means to co-opt political opponents and rally support- ers under his socialist banner. Most existing parties, including the more rightwing groups, agreed to join the National Front. US Embassy reporting indicates that, although the political identities of the other members of the National Front have been weakened by continued close association with Ratsiraka's domi- nant Advance Guard of the Malagasy Revolution (AREMA), they pose a latent, but fragmented, oppo- sition to the President. 19 Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Advance Guard of the Malagasy Revolution (AREMA) Ratsiraka established AREMA in early 1976 as the nucleus for a one-party state, and he remains the party chief. Opposition to the one-party concept led Ratsiraka to form the National Front later that year, a move that gave AREMA a prominent role in the umbrella organization. According to US Embassy sources, AREMA is the only party to have a national constituency and a broad base of support among most ethnic groups and economic classes. The preeminent Red AREMA faction, composed of a variety of ethnic groups, follows Ratsiraka's ideology closely and espouses unswerving support for North Korean?styled socialism. The small but influential White AREMA, predominately Merina, is supported by government technocrats and is less dogmatic. The lackluster AREMA/Fianarantsoa faction caters al- most exclusively to Betsileo interests and is openly critical of pro-cotier policies. Richard Andriamanjato Congress Party for Malagasy Independence (AKFM) Established in the late 1950s, the AKFM is strongly pro-Soviet and widely known to receive funding from Moscow, according to the US Embassy. It has links to African nationalist movements and European Com- munist parties. The AKFM advocates total land redistribution and nationalization, and provides politi- cal counterpressure to Ratsiraka's initiatives on open- ing the economy. Based in the capital, with some support in Antsiranana (Diego Suarez), the AKFM has little appeal to the working class. It derives support mainly from middle- and upper-class intellec- tuals in the Merina and Protestant strongholds in the Founder of AKFM . frequently engages in anti-US rhetoric, advocates closer ties to the Soviet Union, widely regarded as a Soviet errand boy. . . member of the Supreme Revolutionary Council, but has limited influence with the President . . . Pastor of the largest Protestant congregation in Madagascar, longtime mayor of the capital. . . sophisticated, engaging personality, brilliant orator . . . about 56 years old. capital./ Secret 20 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Manandary Militants for the Establishment of a Proletarian Rakotonirina Regime (MFM) Established in the early 1970s, the Marxist-oriented MFM poses the most serious opposition to Ratsiraka, according to the US Embassy. The MFM has a populist base of support among peasants, laborers, and the unemployed. Its ideology?advocating Chi- nese-style agrarian reform and opposing the Soviet model for industrialization and state capitalism?also appeals to radical intellectuals, including many uni- versity professors, students, and some government workers. The MFM has opposed Ratsiraka's moves toward increased privatization and foreign invest- ment. Founder of MFM . . . advocates radical change, acknowledged spokesman for group representing in- terests of the unemployed . . . wary of the United States, distrusts all foreigners . . . astute politician, one of the most influential members of the Supreme Revolutionary Council . . . suspected of coup plotting and has been imprisoned on several occasions . . . sociology lecturer . . . about 38 years old. Marojama Razanabahiny Cofounder of VONJY. . . generally viewed as the , most moderate member of the Supreme Revolution- ary Council. . . politically ambitious, may be a contender in 1989 presidential election . . . head of . Libyan-Malagasy Friendship Society, has close ties to the French Socialist Party . . . warm and friendly in dealings with US officials, visited the United States under International Visitor grant in 1984 . . . French-trained gynecologist . . . 55 years old. Movement for National Unity (VONJY) More right wing than most of the other parties, VONJY is critical of Ratsiraka's continued close ties to the Soviets at the expense of better relations with the West The cotier- based party is strongest in the western provinces, but is attempting to extend its base of support. VONJY leadership currently is attempting to revitalize the party, following a loss of popular confidence in 1982 when internal rifts prevented it from emerging as a viable opposition to Ratsiraka in the presidential election. 21 Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Jaona Remanindry Founder of breakaway MONIMA faction . . . oppor- tunistic, politically ambitious but lacks an indepen- dent power base. . . favors Chinese development model . . . expelled from Supreme Revolutionary Council for supporting Monja Jaona 's candidacy in 1982 presidential election. Monja Jaona Founder of MONIMA -K . . . popular national figure for over 20 years . . . views himself as the conscience of the revolution and the leading Malagasy opposi- tion leader. . . political maverick, self-described Maoist, outspokenly anti-Soviet . . . rumored to be involved in numerous coup plots, according to the US Embassy . . . placed under house arresr for eight months in 1983 for advocating a nationwide strike . . . residual distrust of the West, probably stemming from colonial experience . . . in his late seventies. Socialist Organization MONIMA (VS MONIMA) VS MONIMA is a small, lackluster offshoot of MONIMA-K that remained within the National Front after Monja Jaona temporarily pulled MONIMA-K out of the organization in protest against government policies in 1977. The more mod- erate VS MONIMA coexists with MONIMA-K, largely in an effort to retain the privileges of belong- ing in the National Front. National Movement for the Independence of Madagascar (MONIMA-K) Established before independence, MONIMA-K is a staunchly nationalist party with support mainly among the less educated, and the herders and subsis- tence farmers in the southern province of Tulear. Virulently anti-Soviet but one of the more radical leftist groups, it has resorted to violence in opposing the government in the past. The US Embassy reports that Ratsiraka probably does not regard its elderly leader, Monja Jaona, as a threat, since he allowed Jaona to stand as the opposition candidate in the presidential election in 1982. Secret 22 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Solo Norbert Andriamorasata Founder of UDECMA . . . member of the Supreme Revolutionary Council . . . expressed interest in es- tablishing ties between UDECMA and US political parties. . . shy, modest. . . Roman Catholic. . . about 52 years old. 23 Secret Malagasy Christian Democratic Union (UDECMA) Probably the most marginal member of the National Front, UDECMA was established in the late 1970s in an effort to unite the divided Protestant and Roman Catholic communities. Backed largely by leftwing Christians in the capital and in the coastal city of Toamasina (Tomatave), UDECMA is moderate and anti-Communist and advocates policies that improve the quality of peasant life. The US Embassy notes that the UDECMA leadership to some degree com- promised its principles when it joined the National Front. Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 25X1 25X1 Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4 Secret Secret Declassified in Part - Sanitized Copy Approved for Release 2012/07/16: CIA-RDP88T00768R000400440001-4