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Madagascar: South Korean Land Deal Sparks Controversy

South Korea has just leased half of all the arable land in Madagascar according to the Financial Times. This has stirred quite a debate in the Malagasy blogosphere about land sovereignty and economic development. It is still unclear whether the land deal has actually been signed by both parties. Meanwhile, bloggers are arguing whether this sort of deal should be considered “neo-colonialism”.

Here is an overview of what is know so far.

On November 19, the Financial Times reported on the deal between South Korean company Daewoo Logistics and the Malagasy government.

On the Global Dashboard blog, Alex Evans summarizes the findings:

South Korea has just struck a 99 year deal with Madagascar to lease an area half the size of Belgium to grow palm oil and no less than half of South Korea’s corn demands [..] Carl Atkins, of consultants Bidwells Agribusiness, said Daewoo Logistics’ investment in Madagascar was the largest it had seen. “The project does not surprise me, as countries are looking to improve food security but its size it does surprise me.”

A few hours later, a follow-up article in the Financial Times added that Daewoo Logistics would not have to pay fees for the lease, but would instead provide the means to allow exploitation and development of the land.

Alex Evans, quoting from the second article, says it's even worse news than he thought:

A few hours later, a truly astonishing new angle on the story emerged. Guess how much South Korea had paid for its 99 year lease? Answer: Zip. Zero. Nada. Not a cent. The sum total of the benefits for Madagascar, according to a Daewoo spokesman? “We will provide jobs for them by farming it, which is good for Madagascar.” This in a country where 3.5% of people are on WFP food aid…
The benefits for South Korea, on the other hand:
“We want to plant corn there to ensure our food security. Food can be a weapon in this world,” said Hong Jong-wan, a manager at Daewoo. “We can either export the harvests to other countries or ship them back to Korea in case of a food crisis.”


Photo by Foko-Madagascar

The Malagasy government has yet to release an official statement on the issue. Reuters reports that the deal is far from being finalized. Daewoo Logistics, however, has issued several statements that contest the veracity of the articles.

Robert Koelher, blogging from Seoul at The Marmot’s Hole, explains the points of contentions from the South Korean company:

In another report, the Maeil Gyeongje said experts believe the FT report, with its provocative talk of “neo-colonialism” and “pirates,” was intended as a warning against an increased Asian presence in Africa, long considered Europe’s backyard. The piece did include a quote from a Daewoo Logistics official, however, who said Madagascar was quite sensitive about this issue because when China invests, it only goes after its own profits [..]
The JoongAng Ilbo, meanwhile, released an editorial blasting the FT, asking why the paper was turning a blind eye to British Jatropha farms in Madagascar (used for biodiesel fuel) and French plantations on the island while going after a Korean company only. And besides, the land Daewoo is acquiring is undeveloped, the new farms will provide employment, and the Madagascar government will be taking a 30% cut of the farm profits in taxes.”

Reactions to news of the land deal were heated and diverse in the Malagasy blogosphere:

The Malagasy diaspora website Sobika reported on the deal (Fr) moments after the Financial Times and asked their readers to react. Over 100 comments were posted on the articles within a few days. In a follow-up article, Sokiba speculates that the outrage expressed on the internet has led the company deny the conditions of the deal [Fr].

The outrage is far from being unanimous though. Some bloggers feel that the land deal could benefit Madagascar by increasing productivity on parts of the land. Aiky on the community blog Malagasy Miray adds [Mg]:

Ny tombontsoa indray kosa raha jerena amin’ny saina tsy miangatra dia :
– ny fanomezana asa ireo tantsaha eny ambanivohitra ka miteraka fidiram-bola maharitra ho azy ireo izany.
– ny fanajariana ireo tany izay tsy noeritreretina fa afaka ambolena na ihany koa tany ngazana ka rahatrizay vita ny fifanarahana izany hoe afaka zato taona dia mba ho moramora ho an’ireo taranaka fara aman-dimby ny hampiasa sy hamboly azy (raha tsy lasa fanan’olom-bitsy indray avy eo)
– raha misy fidiram-bola maharitra ireo tantsaha dia mety ho hita ihany koa ny fiatraikan’izany ka mahasoa ho an’ny manodidina na “effet d’entraînement”. […]
-Asa na tafiditra ao anaty fifanarahana fa mety hihatsara ihany koa ireo lalana sy tambanjotra misy any amin’ireo faritra.
– afaka mifehy ny fiakarana an-tanandehibe ny mpitondra raha misy asa eny ambanivohitra (maîtrise de l’exode rural)

The advantages as seen from a less emotional perspective:
– The new employment prospects for the farmers which in turn would lead to additional source of revenues.
– The exploitation of lands that were thought to be of little value and that could be still exploited after the lease.
– the chain reaction from such increase in revenues [..]
– the potential improvement in the status of the national roads and other facilities in that part of the country.
– A possible incentive to stop the exodus from the rural areas

On The Cyber Observer, a lawyer and blogger in Antananarivo, Andrydago, had the the amazing foresight to raise the legal issue of the sovereignty of land and foreign investment in October, a full month before this controversy. It is striking that the laws that make this lease permissible were amended earlier this year:

Recently, the new Malagasy investment law: act 2007-036 of January 14th, 2008, has brought a very key change concerning the possibility for foreigners to own their land in Madagascar. This law provided that foreign companies or foreign investors (individuals who have been granted with investor visa), can buy Malagasy land under the following conditions:

1. the land has to be used exclusively for professional exploitation. Any personal use and exploitation which is different from the nature of exploitation he “promised” to the Malagasy governement, are forbidden. If there is a breach of such condition, the governement can legally withdraw its title of land ownership;

2. the foreign company or investor has to submit its business plan (investment planning in Madagascar) to a public body named EDBM (Economic Development Board Madagascar). Such plan has to describe and detail its intended business and its pertaining investment in Madagascar;

3. the foreign company or investor has to apply for a formal approval named “authorization for land acquisition” before the EDBM in order to be allowed to purchase legally a Malagasy land. Such authorization if granted, gives to the foreign company or investor the same rights as for a Malagasy entity to purchase and to own land in Madagascar.

32 comments

  • […] and international outrage, the land deal that would have let South Korean firm Daewoo Logistics lease a large swath of Madagascar's arable land, was finally rejected.  The number of reported land deals between wealthy countries and developing […]

  • […] natsahatra ihany ilay fifanarahana hampanofa amin'ny orinasa Koreana Tatsimo Daewoo Logistics ny ampahany betsaka amin'ny tany azo volena eto Madagasikara. Nefa mihamitombo hatrany koa etsy ankilan'izany ny fifanarahana fampanofana tany eo […]

  • […] All things have their due time. who knows if this warring play is just to hide the free giving of one million hectares of land to Daewoo, or the 250 thousand hectares to the […]

  • […] l'accordo fondiario che avrebbe concesso in affitto alla società coreana Daewoo Logistics una vasta fascia della terra coltivabile del Madagascar [in] è stato infine respinto. Il numero di accordi fondiari segnalati tra Paesi ricchi e nazioni […]

  • Matt

    Greetings I hope your day is going well.

    I live just outside of Olympia Washington USA (70 miles south of Seattle) and besides my job as a computer specialist my wife and I have a tiny farm. We grew all of our crops by hand, meaning very little machinery. Our Organic practice is much closer to how most Malagasy farm than most American or big Agribusiness farmers.

    I have seen American farms where as far as you can see the land is tilled, fertilized, planted, pesticide, herbicide, fungicide, watered, weeded, and harvested by machines. Corn is one of the crops that can be raised by machines. These thousands of acre farms employ about 10 farmers and 50 to 200 big machines. This would be the employment benefit Big Business will be boasting about. Big farms do not make BIG profits and usually get some form of subsidy so the great taxes they boast will be none existent. Deforesting Madgascars’ fragile ecosystem to plant thousands of acres of corn will denude vast tracts of land of countless plants and animals destroying beauty and biodiversity of Madagascar!

    I can only hope that if this deal goes through it will be better than we currently see. Hopefully the Malagasy leadership will be wise and make sure their people are protected and lent a hand from this deal, not bearing it on their backs so big business can make big profits.

    Can we get a letter campaign going to the Malagasy government expressing concern and have it signed by people from around the world? It is a very common practice used in the USA to get tens of thousands of signatures to send to congress over hot issues.

    Can we do that here? Draft a letter, e-sign it and send it to the UN and President of Madagascar.

  • Jay_Pablo_69

    I honestly cannot believe that a country (Madagascar) who’s ecosystem is revered by every countries in this earth would think of touching a plot of its vegetation, much more give it away for what?! It is a very ‘stupid’ act by the government. Madagascar has about 5% of the world’s total ecosystem, and to give it away for nothing is very distressing. Even to give it away for something is still not acceptable, for 99 years is PURE MADNESS (giving away half the size of Belgium is ……..??????……….. I really have no word for that yet).

    Look at this Korean excerpt:

    “…And besides, the land Daewoo is acquiring is undeveloped, the new farms will provide employment, and the Madagascar government will be taking a 30% cut of the farm profits in taxes.”

    ‘Underdeveloped’ what is that?! ‘30% cut from profit in TAXES’ that’s trash. This shows that all they want is nothing but profit, same with other Asian countries in Africa. All they want is to ‘milk’ Africa and go. No Asian country will ever lease more than 5 plots of land to an African country (that’s if they are willing to lease 3). Look at the sizes of our embassies in these countries, that will give you an idea.

    I totally agree with Matt (from Olympia Washington USA), the so-called employment benefits the natives will get is BIG MACHINES and nothing more.

    One thing we Africans should understand is that these Asian countries creeping into Africa are not here to help us but to deplete the little resources we have left (through PIRACY and NEO-COLONIALISM). All they want is to really make us beg. They want to colonize us again. We have been through a lot in history, we suffered under colonization, Madagascar case is nothing but neo-colonialism and piracy. We CANNOT go through it again.

    It’s time to SAY NO TO PIRACY & NEO-COLONIZATION!

  • […] a young self-made businessman, not unlike the current president. – November 2008: Prospective land deal with Daewoo Logistics draws outrage nationally. – December 2008: Conflict over the alleged improper broadcasting of […]

  • […] fotoana izao no nandresy azy. – Novambra 2008: Niteraka fahatezerana nanerana ny firenena ny fifanarahan-tany niaraka tamin'ny Daewoo Logistics. – Desambra 2008: Fifandirana mikasika ny lazaina ho fandefasana tsy ara-dalàna kabary politika sy […]

  • Faye Keene

    Leasing 50% of Madagascar’a arable land to Daewoo for 100 years is so outrageous. How can the Malagasy government be so short sighted? This is so shameful and makes me want to shout when the majority of Malagasy people eat only once a day. If South Korea needs corn, Madagascar can grow corn and export it to South Korea.

    This has always been the practice of trade. If Madagascar grows the corn, it can also generate jobs for the Malagasy people, in addition exporting the product would empower Malagasy farmers and make them the large source of the country’s GDP. The income from the export can be used to build infrastructure. Malagasy people grow and exports letchis, vanilla and coffee, why can’t we grow corn to feed our own people and export the left over. Malagasy people are very hard working people, they just need empowerment such as heavy equipment to exploit a large surface of land. The government can use micro-credit or buy the equipment for the farmers. It is so so so sad that the President does not even have faith in his own people. He prefers selling his own land to Daewoo for nothing than giving his own people the very opportunity for growth.

    For example: Madagascar imports cars. Is Madagascar going to build a car manufacturing plant in South Korea, because South Korea has the resources and ship the cars to Madagascar and would South Korea accept that. Definitely NO. South Korea will manufacture the cars and sell them to Madagascar. I don’t blame South Korea bacause that is the law of trade and that makes sense.

    Currently, the US is the major exporter of corn to South Korea, why don’t South Korea lease a land the size of Rhode Island to South Korea? The US would reject the offer because they make a better deal exporting than giving away a large piece of land to a foreign country. South Korea just takes advantage of the vulnerability of the Malagasy economy by proposing such a deal and our President is just too dumb accept it. Our President is a businessman but does not have a sense of business at all. His sense of business is to sell Madagascar and that is his way of showing he loves Madagascar “Tiako i Madagasikara” it is to ironic.

    I am so mad at the current government, it does not even think in the long term. How large the Malagasy population would be in 50 years? Probably more than 60 million. How are we going to feed our population? Probably Daewoo will sell the corn back to us at a very high price. This is 100% neo-colonization.

    And I say NO to NEO-COLONIZATION.

    If this deal is realized, that is the end of Madagascar as a sovereign nation. The Malagasy people will be pushed away in their own land.

    Moreover, Daewoo is such a corrupt corporation, I don’t trust it at all. Anyway, how can I trust such a firm that wants to occupy another country. Shame on you Daewoo. If you want corn, we will export it to you. If we need cars you will export them to us. That is fair trade to me.

  • Faye Keene

    I forgot, Daewoo plans to grow genetically modified corn in Madagascar. However, genetically modified seeds are dangerous as their negative effects are uncontrollable.
    Ravalomanana, please wake up, don’t sell out our land, the heritage of our ancestors. Shame on you Ravalomanana.

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