Export processing zones in Madagascar: a success story under threat?

The success of export processing zones or the Zone Franche in Madagascar since 1990 is, with the exception of Mauritius, an isolated and unknown case in Africa. This paper, based on first-hand data, explains that the Zone Franche has had a highly significant macroeconomic impact in terms of exports and jobs. We show that average wages in the Zone Franche are equivalent to the other formal activity sectors, other things being equal, and that labor standards there are higher than average. The Zone Franche quickly recovered from the 2002 crisis and has benefited a great deal from AGOA. The final phase-out of the Multi-Fibre Arrangement in 2005 is expected to have a negative impact on the Zone Franche.