The Competitive Dynamics of the Clothing Industry in Madagascar in the post-MFA Environment

The last few years have witnessed two major shifts in global trading and industrialisation patterns. The first is the rise of China (with the South East Asian region in tow) as the dominant force reshaping the competitive dynamics between developing and developed countries as well as within the developing world itself. The second is exemplified in the rapid rise of a clothing industry sector, with a concomitant impact on wage employment, in some sub-Saharan African countries (amongst which Madagascar has been prominent), as a direct result of the African Growth and Opportunities Act (AGOA) of 2000. However, the end of the Multifibre Arrangement and the massive impact of China on the global dispersion of clothing production have threatened to substantially disrupt these processes. Despite the plethora of warnings, there is very little empirical analysis of the real changes taking place as a result of the changed global environment. Based on international trade data and field research undertaken in Madagascar, this article aims to analyze the clothing industry's current dynamics in Madagascar, given the impact of AGOA and the end of apparel quotas. The first section situates the clothing industry in Madagascar within the changing global environment. The second section provides an analysis of the competitiveness dynamics and global linkages operating in Madagascar based on primary research through firm level interviews undertaken in Madagascar in 2005. The article concludes by assessing the policy implications in the post-MFA world.