This case study, Natural Capital and Sustainable Development in Madagascar, summarizes the work done in the framework of the implementation of macroeconomic indicators to inform public policies on realistic and effective indicators. Madagascar is one of the five pilot countries engaged since 2011 in the Global Partnership for Wealth Accounting and the Valuation of Ecosystem Services - WAVES.
The total wealth of Madagascar is estimated at 6500 USD per inhabitant in 2014, nearly 36% of which is provided by natural capital. This contribution of natural capital increased quite significantly from 2012 due in particular to the growth of mining production. On the other hand, Madagascar's intangible capital steadily decreased between 2008 and 2014: it was at 50% of the total wealth in 2008 and only 38% in 2014.
Renewable natural resources (farmland, grazing and protected areas) are predominant as they alone accounted for 92% of the total value of the natural capital stock in 2014. However, the renewable character of these resources does not necessarily imply that they will be renewed over time. Despite a consistently positive national saving rate, the wealth stock in Madagascar is in decline. The Adjusted Net Savings rate is consistently negative, indicating that the sustainability of the country's national wealth is poor. Over the past six years, this rate has declined by more than 50% between 2008 and 2014, indicating that not only is capital depleted, but the rate of burnout is worryingly high. In order to improve the adjusted net saving rate and thus preserve and increase the stock of national wealth, it is important to reinvest natural resource revenues in other forms of productive capital. Madagascar will also have to focus on intangible capital, essentially the improvement of governance and the quality of institutions.
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