Tuesday, April 24, 2012

Big Changes to Ambatondrazaka After Nearby Sapphire Discovery

Ambatondrazaka has been abuzz lately, with full hotels, newly opened offices, and foreign faces everywhere. The reason? Newly discovered sapphires about 50 km southeast, near the town of Didy.

The changes were subtle at first, but over the past few days one can see them everywhere. I bought a soda at a corner store on Friday and by Sunday it was empty and repainted. The owner closed down because she was offered about $600 a month in rent for the space. The rent should not have been more than a hundred dollars or so. Paying money like that, it's no wonder so many people are closing up shop here.

Fortunately, it appears that more successful businesses are remaining open, at least for now. A friend of mine owns a hotel restaurant, and over the past week has added a covered outdoor bar and seating area. Several of the gem buyers, almost all Sri Lankan, are staying at his hotel indefinitely. Eating lunch there today, I witnessed a trio of Frenchmen approached by a Malagasy man with stones. They examined them for several minutes right at their table before politely declining to buy them.

The road to Didy is very bad, so big tractors with long, open trailers are the most common way to get people and supplies there from Ambatondrazaka. The street where these tractors depart used to be a very quiet place, though it is now common to see four or five tractors loading up at once.

The majority of stone buyers have opened office fronts close to this makeshift tractor station. They are freshly whitewashed buildings, clean and newly painted inside, with one Sri Lankan buyer sitting behind a desk. Two or three empty chairs are ready for anyone who stops by with stones for sale. The reason that so many come from Sri Lanka is the long history of Sapphire mining and trading there. As one buyer told me, Sri Lankans have been in the Sapphire business for generations, so they know it well. And though most of the buyers are Sri Lankan, there are French and Malagasy buyers here as well (though they haven't opened offices).

Not only do the buyers need office space, but they also need places to live. Some are still staying at hotels, but many have already found semi-permanent residences. I've talked to people who have been approached by buyers looking to rent houses. As with the office spaces, incredibly high rents are offered for housing to get people to acquiesce. A family may rent a cheap house elsewhere and rent out their own house to buyers, making a healthy profit from the deal.

The changes in Didy are most likely even more noticeable than here in Ambatondrazaka. I've heard that rice is now 900 Ariary per cup there, whereas it was only 300 not too long ago. Beer has gone up to 7,000 Ariary a bottle, while it remains around 2,000 here. Didy has probably seen a huge influx of Malagasy migrants striking out for stones, and the supply of goods still hasn't caught up with the rapid rise in demand.

Another potentially troubling aspect of this stone rush is that the mining is occurring in a protected forest area. The head of the region apparently sent in the police to try to stop this, but who would expect that to work? The only result is that the cost of business now includes paying off officers so mining can continue. How much forest will be disturbed by mining activities is still unknown because the extent of the area with sapphires is still unknown.

And the worst part of this entire charade is that it is another instance of Africa's resources being exploited by foreigners who take the vast majority of the profits. The previous president, Marc Ravalomanana, banned the export of unprocessed stones to try to remedy this problem. But when he was ousted in a coup in 2009, foreign investment in processing here in Madagascar dried up. So the export ban was lifted in 2010, and almost all the sapphires being found in Didy will be sent abroad to be cut and polished.

It is still very early, so it's hard to tell exactly what the long term changes to Ambatondrazaka and Didy will be. Some of the buyers are said to be prepared to stay here as long as stones are being found, which could be several years. And it isn't change itself that worries me, but the unsustainable influx of money that has begun. Will people invest that money, or just spend it? Will they invest it in businesses catering to the gem buyers, which will then go under if the mine gets tapped out? I'm apprehensive to say the least. But, forever the optimist, I'm hoping nothing too bad happens to the city I now call home.

7 comments:

  1. Wow, Evan...900AR for a kap of rice and 7000AR for beer?

    It'll be interesting to see the long term impact this has in Ambato/Didy.

    ReplyDelete
  2. As one Malagasy columnist wrote 11 years ago about the sapphire in Ilakaka in 1998 and in Andilamena in 2001 "Madagascar is rich in natural resources without cause but poor without mystery".
    Unfortunately, people (not only in Madagascar but around the world)'s motto is "eat, drink and be merry", live for today. That's why the prostitution and bar businesses were booming in Ilakaka and Andilamena. Wall Street folks are no better as Citigroup CEO Chuck Prince told the Financial Times in July 2007: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” (Source: http://www.barrypopik.com/index.php/new_york_city/entry/we_have_to_dance_until_the_music_stops/).
    Madalife

    ReplyDelete
  3. AFP's story about a month ago about mines in a region that discovered sapphires about 15 years ago... http://www.google.com/hostednews/afp/article/ALeqM5gMVmixB1uV1ltNRzrAjYrSa_GLUw?docId=CNG.37176bc8aa5ed3b74189854d32209466.f1

    That is what Alaotra-Mangoro has in store... There were always rumors that the head of the COBA (VOA) in Didy was profiting from illegal hardwood extraction; I wonder how well he is doing in this endeavor? I feel bad for my old home! (PS: road not that bad! Brousse rides used to take 3-10 hours... biking was much faster, even with the long parts needed to carry it through the mud!)

    Love your update, thanks and keep writing!
    -Chris Planicka

    ReplyDelete
  4. Hi Evan, Thanks for the informative update, We may have met last year during the Op Smile mission to Tana, I was doing the photos. I am researching this as a potential photo story, Would you mind getting in contact with me at zutelightfoot"at"yahoo.co.uk. Thanks Zute

    ReplyDelete
  5. Hi Evan,

    Thanks for the information. Could you please get me the contact details of the Mayor/ Local government contacts of Ambatondrazaka / Alaotra-Mangoro!

    Awaiting your kind reply.

    ReplyDelete
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