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March 18, 2009

Madagascar's new leader cancels Korean land deal

by Sebastien Berger

Madagascar's new military-backed leader, Andry Rajoelina, has cancelled a vast and hugely controversial land deal with a South Korean company. Only a day after the president, Marc Ravalomanana, resigned, Mr Rajoelina, 34, said that the agreement was off.

Under it Daewoo Logistics was to rent 3.2 million acres – a large proportion of the country's arable land and an area half the size of Belgium.

The firm's plan was to use it to grow maize and biofuels, and it was one of the most striking examples of the rush for resources in Africa, which has been led by China.

But Mr Rajoelina said: "In the constitution, it is stipulated that Madagascar's land is neither for sale nor for rent, so the agreement with Daewoo is cancelled."

As the opposition leader he had accused Mr Ravalomanana of running the Indian Ocean island as a private company, citing the project as an example.

Ever since reports of the agreement first emerged last year, it has been shrouded in secrecy and controversy. In January a Daewoo official said that it had been stalled in a backlash against "neo-colonialism."

Analysts said that other foreign investors were unlikely to be affected. Philippe de Pontet, of Eurasia Group, said that while the Daewoo Logistics deal was "off the table," "major mining and oil investors on the ground will likely ride out the crisis without losing their projects"

The London-listed mining giant Rio Tinto is Madagascar's biggest foreign investor and said it did not foresee any problems in the wake of the takeover.

Daily Telegraph

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