March 19, 2009 / 10:53 AM / in 10 years

Norway says aid to Madagascar remains frozen

ANTANANARIVO (Reuters) - Norway said on Thursday an aid freeze imposed on Madagascar this week remained in force under the new government of President Andry Rajoelina whose rise to power has drawn international disapproval.

Madagascar's new president Andry Rajoelina greets his suppoters at Antananarivo city centre March 18, 2009. REUTERS/Siphiwe Sibeko

Norway, which gives 90 million crowns (9.6 million pounds) in annual aid, appears to be the only nation to have publicly announced such a sanction despite threats from other countries during the Indian Ocean island’s political upheaval.

Oslo said other unnamed donors had taken the same step. Standard & Poor’s has cut Madagascar’s long-term foreign currency sovereign credit rating to “B-“ from “B,” citing political uncertainty after weeks of protests.

The political unrest in Madagascar has killed at least 135 people, devastated the $390 million-a-year (268 million pound) tourism sector and worried multinationals with investments in the fast-developing mining and oil industries.

Rajoelina, who at 34 is Africa’s youngest president, took power on Tuesday after leading strikes and demonstrations against President Marc Ravalomanana since the start of 2009.

Ravalomanana handed power to the military, and they in turn appointed Rajoelina. A former disc jockey and sacked mayor of Antananarivo, Rajoelina is nicknamed “TGV” after the fast French train due to his rapid-fire personality.

Though Madagascar’s Constitutional Court has endorsed Rajoelina’s takeover, various world bodies including the African Union (AU) and United Nations have expressed concern at the change in leadership without a vote.

Zambia wants Madagascar suspended from southern African bloc SADC and the AU.

Rajoelina, who has been putting together his cabinet and thanking supporters, is due to be inaugurated on Saturday.

The new leader — six years too young to be president under the current constitution — now heads a transitional government which has pledged to hold a poll within two years on the world’s fourth biggest island, lying off Africa’s southeastern coast.

“I’M LEGAL”

“Now everything is legally sound. Power was transferred by a legal document,” he said at his house late on Wednesday.

His main challenges are to improve living standards for locals — whose frustrations at poverty fuelled Rajoelina’s support — and to handle international concerns at his ascent.

The new president will also be on the lookout for any dissent in the armed forces, where some officers were opposed to his takeover, diplomats say.

Norway’s Foreign Ministry announced the aid freeze just before Ravalomanana resigned. It said in that statement “a number of other donor countries” had taken the same step.

“The actual decision was made before the change of president because of the unstable situation,” ministry spokeswoman Ragnhild Simenstad said on Thursday. “It probably will be in force until we assess the situation further.”

An EU commission spokesman also said the situation remained very unclear and needed clarifying. The EU has allocated 588.2 million euros development aid to Madagascar for 2009-2013.

Nervous of more turmoil, the U.S. embassy has ordered non-essential staff and their families to leave Madagascar.

But the streets were calm on Thursday, as Madagascar’s 20 million people tried to resume normal lives after months of chaos in the capital and fear over the future across the island.

While the military was crucial in installing the opposition leader, analysts say he also has the backing of exiled former president Didier Ratsiraka and his allies. Some analysts said former colonial ruler France gave him tacit support too.

Paris has said it will keep aid flows going, though it criticised the 24-month vote deadline as too long.

Ravalomanana’s whereabouts are still unclear. The opposition had accused him of corruption and of losing touch with the majority of the population who live on less than $2 a day.

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