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ILAKAKA, Madagascar—Southern Madagascar is a land awash in superstition—of witches and reincarnation and haunted bridges where children leap out of the darkness to send cars careening into the abyss. As our driver pulls over for the night in the roadside town of Ambalavao en route south to Ilakaka, a once-booming sapphire town, I notice my French-Malagasy photographer Rija’s face turn ashen. He recalls his last stay here, when an unsettling late-night encounter with a delirious old woman ended in her vowing that he would not finish his journey “intact.” A few days later, his camera bag inexplicably vanished from the top of a bush taxi. He has never quite shaken the feeling that he was cursed that night in Ambalavao.
One might forgive Madagascar’s entire southern region for concluding it has been dealt a similar fate. In contrast to the verdant rolling hills of northern and central Madagascar, large swaths of the southern plains are arid and prone to food shortages. Seven in 10 southern households don’t have enough food. In 2009 a coup in the capital, Antananarivo, unleashed a cascade of crises across the country. Since then a series of droughts have conspired with the worst locust outbreak in more than 50 years to compound the south’s hardship. Heavily armed gangs of cattle rustlers now roam with impunity. Banditry has grown so bad that long stretches of national highways are no-go zones for authorities.
Every so often, however, the gods do smile on this forbidding land. Consider the case of Ilakaka. Until 1998 Ilakaka was home to a handful of houses, a few dozen residents, abundant scrubland—and little of particular interest. Then came the gemstone boom. Fifteen years later, with Madagascar having just elected a new president and hoping to finally put five years of political upheaval behind it, Ilakaka is the country’s greatest and unlikeliest boomtown—and a stark reminder of the persistent obstacles of making genuine progress in a blighted land.
The story of today’s Ilakaka begins in the early 1990s. The first significant discoveries of gemstones came in northern Madagascar, fueling waves of migration to the fringes of its vast forests. Meanwhile, in the south, a smaller number of prospectors were collecting garnets to sell to foreign dealers. One batch from Ilakaka, a sharp-eyed buyer noticed, were not garnets at all, but something exponentially more lucrative: pink sapphire.
Word spread quickly. Within a year thousands of ramshackle tenements sprawled on either side of National Route 7. Tom Cushman, a sailor-mouthed American gem dealer who’d first come to Madagascar in 1991, was one of the first to set up shop in Ilakaka. “I was down there in September  and there were only about five of us buying. Buying out of our cars. There was no town,” Cushman recalls. The vibe, he says, was 1849 Sacramento Valley. By early 1999, according to Cushman, there were tens of thousands of people seeking their fortunes. By late 1999 there were 100,000.
Cushman tried to spend at least $1,000 a day. The selection was endless—the deep blue sapphires international buyers lusted over were everywhere, alongside pinks, yellows, and rubies. Once the Thais and Sri Lankans, masters of the sapphire trade, arrived, as much as $2 million a week was changing hands. Virtually overnight this sleepy hamlet became the sapphire capital of the world. Anywhere from a third to half of the world’s sapphire production poured out of its once fallow soils. The myth of Ilakaka grew as fast as its population, drawn by the romance of a frontier town. Fantastic fortunes could be made with one lucky plant of a shovel. In a country where more than 90 percent of the population lives on less than $2 a day, single stones were being sold for hundreds of thousands of dollars.
We pulled into Ilakaka the next morning. The town leaves an underwhelming first impression: One drab gem dealership after the next lines a mile-long stretch of Route 7—Azmi Gems, Tonga Soa Siya Gems, La Terrasse Gems, New Sahara Alex Saphir. Inside, foreign dealers sit bored at their desks, waiting for the next miner or middleman to present the morning’s haul for inspection.
It’s immediately apparent that Ilakaka has fallen on hard times. Big stones are few and far between. The low-hanging fruit in the town proper has all been snatched up; miners must walk miles in search of untapped reserves. For three months, the dealers say, almost nothing worth touching has passed through their doors.
As we walk along the main street, a gregarious low-level dealer named Gilbert flags us down. He first came to Ilakaka in 1999 from a poor village in the southeast. He casually empties the contents of a pocket-sized manila envelope into his hand, trying to interest us in a purple stone he says he bought for 1,500 ariary (about 65 cents) and hopes to sell for 2,000. His demeanor cools as we indicate we’re here to talk, not buy. He does, however, offer a frustrated rumination on the state of business. “It’s not OK. Not good at all,” he huffs. “I have a lot of trouble finding buyers.”
The small crowd that’s gathered around us nods in agreement. The problem, says Jean Florent Ramonja, a security guard, is too few vazha—foreigners. The down market has sent many vazha packing for the up-and-coming gem fields in Mozambique and Tanzania. Like Gilbert, Ramonja arrived in Ilakaka in 1999 and has no intention of leaving. “There will always be business here,” he says, gesturing at the dozens of shops that now comprise something of a trading hub for sapphires from across the region. “And I can always go somewhere else if there are stones. But I will return here because it’s home.”