VIII. TRADE AND PROJECT FINANCING BRIEF DESCRIPTION OF BANKING SYSTEM See "Efficient Capital Markets and Portfolio Investment" in Section VII above. FOREIGN EXCHANGE CONTROLS AFFECTING TRADING There is an interbank foreign exchange market, established May 1994, which allows the rate of the FMG to float. Exporters are required to repatriate their foreign currency earning within ninety days of acquisition. GENERAL FINANCING AVAILABILITY The availability of local financing has been constrained recently by the central bank. The purpose of this policy is to control inflation in the wake of large public sector fiscal deficits that have absorbed much of the available pool of local savings. Excessive money creation by the central bank has already contributed to Madagascar's eighteen percent rate of inflation. FINANCIAL EXPORTS AND PROJECT FINANCING Eximbank financing is not available currently in Madagascar. The World Bank and the African Development Bank have financed a variety of infrastructure and other types of projects. Generally speaking, the financing possibilities that are available to local firms are quite limited both in terms of variety and capacity. LIST OF BANKS WITH CORRESPONDENT U.S. BANKING ARRANGEMENTS: BTM: Bankers Trust/New York Citibank/New York Bank of New York French/American Bank/New York Societe Generale/New York BMOI: French/American Bank/New York Dresdner Bank/New York UCB: Citibank/New York BNI: Bankers Trust/New York Bank of New York Citibank/New York American Express International Bank/New York Chase Manhattan Bank/New York Riggs National Bank/ Washington, D.C. BFV: Bank of New York American Express International Bank/New York Bank of America/San Francisco Bankers Trust/New York Chemical Bank/New York French/American Bank/New York MULITLATERAL DEVELOPMENT BANKS: International Bank for Reconstruction and Development The International Bank for Reconstruction and Development (IBRD), a member of the World Bank group makes long-term loans at market- related rates primarily to developing nations. The International Development Agency (IDA), the soft loan window of the World Bank, lends to the poorest of the development countries. Both the IBRD and IDA work to promote broadly based economic growth and frequently focuses on structural adjustment, sectoral reform and individual project lending and operate under the same set of procurement guidelines. Typically the World Bank does not finance the entire cost of a project. Rather, it finances the components of a project purchased with foreign exchange, which on average is about 40 per cent of the total project cost. Each project may cover a wide variety of sectors and can involve anywhere from one to hundreds of separate contracts providing export business opportunities for suppliers worldwide. CONTACTS: U.S. Department of Commerce Liaison to the U.S. Executive Directors Office International Bank for Reconstruction and Development 1818 H. St., NW Washington D.C. 20433 Tele: (202) 458-0118 Fax: (202) 477-2967 Office of Multilateral Development Banks U.S. Foreign Commercial Service U.S. Department of Commerce Room H-1107 Washington D.C. 20230 Tele: (202) 482-3399 Fax: (202) 273-0927 African Development Bank The African Development Bank (AFDB), headquartered in Abidjan, Cote d'Ivoire, is an international financial institution created by Africans in 1963 to promote the economic and social development of its member African countries. Founded with initial capital resources of USD 250 million, it has authorized capital today of over USD 22.3 billion. The bank belongs to the African Development Bank Group (ADBG) which also includes the African Development Fund (ADF) and the Nigerian Trust Fund (NTF). The AFDB makes loans to development projects in 51 countries in Africa. The ADB provides development financing on concessionary terms to the poorer African member countries. The NTF was established by the Government of Nigeria in 1976 to assist in the development efforts of the poorer ADB members. The ADFB has 21 non-regional members. The United States joined in 1982. CONTACTS: U.S. Department of Commerce Liaison Office to the U.S. Executive Directors Office African Development Bank Ave. Joseph Anoma 01 B.P. 1387 Abidjan 01, Cote D'Ivoire Tele: (225) 21-46-16 Fax: (225) 22-24-37 Office of Multilateral Development Banks U.S. & Foreign Commercial Service U.S. Department of Commerce Room H-1107 Washington, D.C. 20230 Tele: (202) 482-3399 Fax: (202) 273-0927