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Madagascar Holds President Run-Off in Bid to Revive Economy

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Dec. 19 (Bloomberg) -- Madagascar will hold a presidential run-off election tomorrow between candidates pledging to end an almost five-year political crisis sparked by a coup and help rebuild confidence in the economy.

Jean Louis Robinson, a medical doctor and ally of ousted President Marc Ravalomanana, faces former Finance Minister Hery Rajaonarimampianina in a second round of voting that threatens to escalate tensions in the world’s second-largest vanilla grower. Legislative elections will also take place.

“There will be a lot of tension after the elections, as neither of the candidates is likely to accept defeat and it will be a tight race,” Juvence Ramasy, a political analyst from the University of Toamasina in Madagascar, said in an interview.

The winner will replace Andry Rajoelina, a former nightclub disc jockey who ousted Ravalomanana in a military-backed coup in 2009, plunging the country into an economic crisis as the U.S. and European Union froze budget aid. The economy stalled and the government was forced to scale back services including education, water and health care, deepening poverty. Ninety-two percent of the country’s 22 million people live on less than $2 a day, according to the World Bank.

Robinson and Rajaonarimampianina are viewed as proxy candidates for Ravalomanana and Rajoelina, respectively, according to political analysts at companies including Strategic Forecasting Inc. and IHS Country Risk.

Missed Threshold

Robinson won 21 percent of support in the first round in October while Rajaonarimampianina received 16 percent. Both were short of the 50 percent threshold for an outright victory, according to results published by the Independent National Election Commission.

Last month, the government replaced governors in 10 out of the country’s 22 regions, filling some of the posts with senior military officials, citing reasons including that some of the politicians are candidates in legislative elections and recent reports of insecurity, according to a government statement.

“I think the army plays an important role and deals have been made with both Rajoelina, who still has much support in the military, and Robinson,” said Ramasy. “Some parts of the military do not want Ravalomanana to come back, while others see the need for a democratic election.”

Free, Fair

Observers from the European Union and African countries declared the first round as free and fair, while local newspapers reported that the number of ballots cast in some polling stations exceeded the number of registered voters.

The crisis in Madagascar has probably cost the economy, which relies on mainly tourism, agriculture, and mining, about $8 billion in lost output, according to the World Bank.

Rio Tinto Plc, based in London, has a $5 billion titanium mine in the country, Canada’s Sherritt International Corp. has a 40 percent stake in the Ambatovy nickel mine, and Lemur Resources Ltd., a Perth, Australia-based coal-exploration company, operates the Imaloto thermal-coal project. The country also produces sapphires.

The economy is forecast by the International Monetary Fund to expand 3.8 percent next year from an estimated 2.6 percent in 2013.

To contact the reporter on this story: Annelie Rozeboom in Antananarivo at arozeboom@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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