Nov. 7 (Bloomberg) -- Madagascar’s political leaders agreed last night to end their standoff by creating a transitional government with former Antananarivo Mayor Andry Rajoelina as president and other positions split between the island nation’s four main movements.

“What the deal says is to put in place a cooperative entity,” said El Ghassim Wane, a spokesman for the African Union Peace and Security Council, which helped broker the talks along with the South African Development Community. “Rajoelina will remain president.”

In addition to the presidency, the deal creates two co- presidents, one of whom will be Fetison Rakoto Andrianirina, a top aide to ousted President Marc Ravalomanana. The second co- presidency was assigned to Emmanuel Rakotovahiny, from the political movement of former president Albert Zafy.

Madagascar has been in political limbo since Ravalomanana was forced to resign in March following two months of protests by supporters of Rajoelina, in which more than 100 people died. Rajoelina was declared president with the support of the military, a move that led Western countries to freeze aid and to Madagascar’s suspension from the AU and the 15-nation Southern African Development Community.

Prime Minister Eugene Mangalaza, a former university professor, will retain his office under the agreement, which creates a 31-member government, a 65-member council of transitional advisers, and a 258-member transitional congress. It also calls for the leaders of the country’s four political movements to create an independent electoral board in preparation for national elections.

The agreement doesn’t define the responsibilities of the various executives or how they’ll work together.

Earlier Agreement

Madagascar’s political rivals agreed at a meeting in the Mozambican capital, Maputo, on Aug. 8 that a transition period was needed to restore stability to the country before elections are held. The signatories included Ravalomanana, Rajoelina, Zafy and another former president, Didier Ratsiraka.

Last month, they agreed that Rajoelina, a 35-year-old former nightclub disc-jockey, would remain president during the transition. Ravalomanana later rejected that agreement, saying in an interview on Oct. 29 that he wanted the transitional administration to be neutral and won’t accept “coup leader” Rajoelina as its leader.

Vanilla, Sapphires

Madagascar is the world’s largest vanilla grower and one of the biggest producers of sapphires. It is also one of the world’s poorest countries, with per capita income declining to $290 in 2005 from $473 in 1970, according to the World Bank.

Rio Tinto Group, the world’s third-largest mining company, owns a $1 billion ilmenite project in the country. Exxon Mobil Corp., the world’s biggest oil company, is exploring in the country, while Total SA last year took a 60 percent interest in Madagascar’s Bemolanga license, where heavy oil has been discovered.

The agreement came after four-days of talks in Addis Ababa, and just hours after the Madagascar government canceled an auction of oil exploration rights due to the standoff.

To contact the reporter on this story: Jason McLure in Addis Ababa at jmclure@bloomberg.net.

Last Updated: November 7, 2009 01:28 EST