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For the first time since the beginning of the crisis, the Government spent massively in October through a combination of debt-service and investment outlays. Over the next few months, the new Government is expected to face three daunting challenges with significant financial implications:

• Organizing institutions and the electoral process (US$10-20 million for each election and an additional US$5-7 million per month to run the institutions)
• Managing humanitarian vulnerability to climatic and external shocks (e.g.,US$40 recovery cost in 2007/2008)
• Minimizing the economic slowdown and job losses that might require budget support.Those amounts would come on top of programmed resources in the 2009-10 budgets and will produce tensions, possibly imposing trade-offs for both national authorities and donors.

See the complete Madagascar Economic Policy Update for November 2009.