* Doubts over Rajoelina’s grip
* May be unable to reduce poverty
* New crisis could come within a year
By Barry Moody
NAIROBI, March 19 (Reuters) - Andry Rajoelina took power in Madagascar this week after sweeping aside his predecessor in a stunning political upset, but his own grip on power is uncertain and the Indian Ocean island could suffer continuing instability.
Rajoelina, 34, who has less than two years of real political experience, led a populist uprising in the capital Antananarivo that forced Marc Ravalomanana to step down once much of the army turned against him.
Ravalomanana, a self-made millionaire, was vulnerable because he treated the army, political and commercial elites with disdain and failed substantially to improve life for the 20 million population of one of the world’s poorest countries.
Despite the undoubted unpopularity of his predecessor, there are doubts about how secure Rajoelina is himself.
He took power in a strikingly similar manner to Ravalomanana by using his position as mayor to mobilise the population of Antananarivo, centre of both political and economic power in the world’s fourth biggest island.
But it is very unclear whether the rest of the country supports him in a place where communication and transport are often primitive. Some analysts said that people in remote areas might not yet know what had happened.
The central issue is whether Rajoelina is in any position to reverse poverty on the island, key to Ravalomanana’s unpopularity.
If he does not do so, he could quickly become vulnerable to exactly the same kind of popular movement that brought him to power.
"There is a potential that in another six months to a year we could see exactly the same problems," said Edward George, an editor at the Economist Intelligence Unit (EIU) in London.
"He is in a very weak position, because after all he is a young guy with little political experience. He doesn’t really have a party behind him," said Madagascar expert Stephen Ellis, African studies professor at the Free University of Amsterdam.
"He does not have a real autonomous power base except possibly the urban mob in Antananarivo and I don’t think that takes you far," Ellis added.
Months of conflict between Ravalomanana and Rajoelina, in which at least 135 people died, seriously damaged an economy already reeling from the impact of the global economic crisis, which exacerbated its existing poverty.
The island’s efforts to exploit its unique culture and flora and fauna to attract tourists are in ruins and the $390 million tourism sector is likely to be decimated. The EIU’s George said it could drop by 90 percent this year.
More instability would prevent recovery.
Even before the unrest, international resource companies throttled back on billions of dollars of investment that were seen as the biggest hope for the economy. Canada’s Sherritt International has said it is likely to delay the $4.5 billion Ambatovy nickel project beyond its projected 2010 start.
The overthrow of Ravalomanana, a democratically elected president, by a military-backed rival has also been widely condemned internationally, especially by the African Union — which is alarmed by a rash of coups and attempted coups in the continent over the last year.
This disapproval is likely to dry up funding from foreign donors until Rajoelina can convince them of his legitimacy — and he says he will not hold elections for two years.
Norway, which gives $14 million a year to Madagascar, said on Thursday it had slapped an aid freeze on the island. It said other donors were taking the same step.
Rajoelina is believed to be backed by the traditional political class previously dislodged by Ravalomanana, including exiled former President Didier Ratsiraka and his allies.
Some analysts see Rajoelina as a front man for Ratsiraka and say his victory could restore the situation before Ravalomanana when the traditional political class was riven by disputes.
"Give it six months to a year in power without any clear constitution, any clear guidelines on who should be in control and we could see the re-emergence of huge factionalism, splits and potentially, political chaos," George said.
There is also believed to be a continuing power struggle within the military, which could worsen with time and make the situation even more volatile.
"I see more problems on the political front and within the military ... on a short term basis. There might be problems of internal rivalries within Rajoelina’s team," said Lydie Boka of the French-based risk analysis group StrategieCo.
But Kissy Agyeman of UK-based IHS Global Insight was more positive about Rajoelina’s chances of survival. She said he had the backing of the army and the constitutional court. "This would suggest he is relatively secure for the moment," she said.
Agyeman said Rajoelina had already taken actions likely to increase his popularity, especially cancelling a deal by the South Korean company Daewoo Logistics to lease 1 million hectares of agricultural land to grow food for export.
The deal had been a major factor in Ravalomanana’s unpopularity in a country that is not self-sufficient in the staple paddy rice.
"This will entrench his popularity ... it is visibly a step in the right direction for the people," she said. (Editing by Charles Dick)