UN seeks $35.7 million to help battered Madagascar

GENEVA (Reuters) - Madagascar faces a freezing of bilateral aid after being hit by drought, cyclones and political instability, the United Nations said on Tuesday, launching a $35.7 million appeal to save lives in the Indian Ocean island.

A lack of rain is expected to delay the next harvest on Madagascar by three months until June and reduce it by 30 to 40 percent, leaving a significant food gap, it said.

Nearly 3.4 million people in Madagascar -- where 71 percent of the population lives on under two dollars per day -- now need humanitarian assistance, the U.N. Office for the Coordination of Humanitarian Affairs said in an appeal to donor countries.

"The political crisis over the past three months has worsened the already poor situation of large segments of the Malagasy population through disruptions in basic social services, a climate of fear and uncertainty, and caused delays or cessation of services to a number of aid and development projects across the country," it said.

Andry Rajoelina took power last month in a transition branded a coup by foreign leaders. He has pledged to hold a presidential election in October 2010 to restore democracy.

The current administration's capacity to meet the basic needs of the affected population has been "severely curtailed", leaving delivery of most aid to relief groups, the U.N. said.

"The growing political isolation of Madagascar, and the decision of some donors to suspend non-humanitarian aid, are likely to even further affect the government's capacity to respond to the needs of its population, increasing caseloads of those requiring international assistance to survive," it said.

France, the country's biggest bilateral donor, denied reports last Friday it was suspending aid. It repeated calls for a return to constitutional rule.

Some $200 million in official development assistance (ODA) has already been frozen, including all direct budget support to the government, according to the U.N. appeal document.

ODA to Madagascar's public sector reached $600 million last year, 75 percent of the government's investment budget, it said.

The government has resources to pay civil servant salaries in April but has indicated it will struggle to pay them in May, it said.