Friday, March 20, 2009

Daewoo's Madagascar Deal Nixed

In a post last fall ("An Unprecedented Investment in Food Security"), we noted the report by the Financial Times that the Korean conglomerate had leased half the arable land on Madagascar for industrial farming. Yesterday, the Financial Times reported that that deal has been nixed ("Madagascar scraps Daewoo farm deal"). Excerpt:

South Korea’s project to transform Madagascar into its breadbasket, branded by some as neo-colonial, came to an abrupt end on Wednesday when the Indian Ocean island’s new president said he would shelve the plan.

Daewoo Logistic’s deal to lease a huge tract of farmland, half the size of Belgium, to grow food crops to send back to Seoul was a source of popular resentment that contributed to the fall of Marc Ravalomanana, the former president.

Andry Rajoelina, who was declared president by the military and constitutional court after months of demonstrations and who will be formally sworn in on Saturday, said that Daewoo’s plan was “cancelled”.


JK said...

A lot of protectionism in the air these days...China canceling the Coca Cola purchase for no good reason, Australians fighting the Rio deal, etc.

DaveinHackensack said...

That's part of it, I'm sure, but the article also notes that suspicions of corruption were aroused when folks realized that Daewoo was basically going to get the land for nothing:

"Once early prospecting of land became public, outrage at the president’s perceived use of political office to further his own business interests changed gear, said a well-connected Malagasy, who asked not to be named. “It was the news that said Daewoo expected to pay nothing for the land that accelerated the [political] trouble,” he added."