This document is hence organized notaround the three types of challenges, but around five themesof governance, public finance issues, private sector-ledeconomy, poverty and environment, and human capital, allcrucial to achieving faster, more inclusive and sustainablegrowth. Chapter one provides the country context. Chaptertwo discusses the quality of governance, an overarchingissue in Madagascar. It has a direct bearing on the pace,the inclusiveness and sustainability of growth. Whileacknowledging the importance of improving governance forMadagascar, which is a difficult, medium term undertaking,this Systematic Country Diagnostic argues that progress isalso possible. Chapter three discusses how amelioration inmanaging public finances, and increasing revenue inparticular, could be used as a lens for improved governance.Chapter four discusses the role and challenges of theprivate sector, the main driver of growth. Chapter fivediscusses the challenges for achieving higher human capitalin a country with a very young population and some of thehighest infant stunting and malnourishment rates in theworld. Chapter six discusses the faces of poverty, which arepredominantly rural, agricultural and informal. A structuraltransformation has not started in Madagascar and poverty andenvironment are closely intertwined. The chapter alsodiscusses the challenges to enhancing the management ofnatural resources and protecting the poor from naturaldisasters and impacts of climate change. Chapter sevensummarizes the challenges and prioritizes the reforms.
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