U.S. to suspend non-humanitarian aid to Madagascar

WASHINGTON (Reuters) - The United States said on Friday it would suspend all non-humanitarian aid to Madagascar after opposition leader Andry Rajoelina's took power with the support of the army in what Washington regards as coup.

Madagascar's elected president, Marc Ravalomanana, was forced out on Tuesday after weeks of opposition protests that won the support of the military.

"This series of events is tantamount to a coup d'etat," State Department spokesman Robert Wood told reporters. "In view of these developments, the United States is moving to suspend all non-humanitarian assistance to Madagascar."

Wood was not able to say precisely how much aid would be affected.

The State Department said this week it provided $86.2 million in total assistance to Madagascar in fiscal year 2008, which ended on September 30, 2008. That includes $27.3 million in Millennium Challenge Corporation funds for poverty reduction projects and activities.

The Millennium Challenge Corporation, the U.S. government's main global development fund, said it is putting on hold the operations of its poverty-reduction grant to Madagascar, which totals $110 million over five years.

"This decision is made with deep regret. Madagascar is the first country with which MCC signed a compact after being created by Congress in 2004," said Rodney Bent, acting chief executive officer of the Millennium Challenge Corporation.

Bent said the fund and Madagascar have worked together over the past four years to increase land security and investments in farms and other rural businesses, and to modernize that country's financial sector. He said more than half of Madagascar's grant already has been provided.

(Reporting by Arshad Mohammed and Will Dunham)