The President’s blunder does have immediate and lasting consequences for the country. The UN has estimated that it will take at least 7 years for the country to recover from the looting, burning and protesting. The lost harvest and burned goods could cause a food shortage in the near future. This is compounded by the fact that the World Bank, and many other aid groups have pulled funding to the country since President Ravalomanana cannot exactly say where he got the $60 mill for the jet.
A very close to home effect of this loss was explained to me by my landlord. He is a contractor and builder. He is about to finish building a school, dormitory and sanitation project in the countryside about 50 km away. He took out a loan to do this, and now the government can’t pay for it. They owe him money for the project and he is very worried that he will never get it. The bank is harassing him and the government is telling him just to wait. He cannot work on other projects until this one pays and he has money for more materials and labor.
Part of the problem is the lack of liquid capital in the market, it is sort of always like this, waiting for money to come. Part of the problem is that the government has no more money to pay for the public works it needs. This is not to say that the government would pay promptly if there was money, but they would pay eventually. Now, Mr. Calixte may never see that money again.