Naturally Madagascar

Such is the slogan adopted by the government of Madagascar for its development vision. Conceived in 2002, it's meant to allude to the abundant natural beauty with which the island is endowed. It could also refer to the island's aspiration to become a natural choice for foreign investors. The far-reaching reform program that's supposed to make this a reality places a heavy emphasis on improving the regulatory framework to enable the private sector to act as the main source of growth. On a short visit to the capital this week, I've been impressed by the flurry of reform activity in seemingly every quarter.

Trade facilitation is a case in point. This year, Madagascar was one of the top reformers on the Trading Across Borders indicator, introducing an electronic data interchange that links all the main entities involved in the import and export process from customs and the ports to the commercial banks, the Central Bank and the Treasury. Based on the Singaporean model and inspired by Ghana's experience, the system is run by Gasynet, a public-private partnership between the government and SGS, a private company. In conjunction with improvements at the island's main port at Toamasina, the reforms introduced by Gasynet have so far led to an impressive three-week drop in the time required to clear import goods.

Gasynet's success has galvanized other parts of the government. The Bureau of Standards, for instance, is working on its own set of reform of standards and quality control. A new legislative framework was adopted earlier this year and the necessary infrastructure is expected to be in place by 2011. The initiative is important: the absence of a recognized quality control regime led, in 1997, to an EU embargo on Malagasy beef, which remains to this day. Better standards and quality control should help remedy this and provide a much-needed boost to exports.

Regional integration has been one of the major reform catalysts as Madagascar's membership in COMESA and SADC has meant tougher competition for markets. Doing Business has also played some part in the reforms: the government has set up a Doing Business task force that reports directly to the Prime Minister. With such high-level involvement, Madagascar seems a likely candidate for top reformer in future editions of the Doing Business report.