Productivity growth in non-resource sector is generally considered as a successful strategy to reverse poverty trend. This policy brief investigates the possibility of addressing the challenge of productivity growth in Madagascar’s garment industry by the promotion of FDIs in the Export Processing Zone. Evidences show that this industry has enormous potential to reduce poverty through growth enhancing effects, high productivity, and employment and wage effects. However, poor business climate as well as weak institutions and lack of capacity to promote good governance impede the full exploitation of this potential.
