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Rajoelina, 34, a former disc jockey, was meeting his ministers to plan anti-poverty programs demanded by locals, respond to international concerns at his rise and control some dissent within the armed forces.     Â
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President Marc Ravalomanana resigned on Tuesday, with no other real options after most of the military backed his rival, who had led weeks of anti-government strikes and protests.
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The nation's worst unrest in years killed at least 135 people, devastated a $390 million-a-year tourism sector and worried multinationals in its mining and oil industries.
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The outcome was also a slap in the face for the African Union (AU), which has censured recent violent transfers of power that have damaged the continent's reputation with investors.
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Experts said Western donors might cut aid to the world's fourth largest island, but only in the short-term.
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"With so many people below the poverty line I can't see the international community abandoning
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While military support was the crucial factor that installed the opposition leader in the presidency, analysts say he also has the backing of exiled former president Didier Ratsiraka and his allies. Some analysts said former colonial ruler France gave him tacit support too.
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Rajoelina, previously mayor of the capital, was feted by locals as he drove through the streets on Tuesday. The new government was seeking to re-open ministries in
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There was a heavy military presence at the palace in Iavoloha where Ravalomanana capitulated. A Reuters TV witness saw broken windows and furniture, as well as a crowbar lodged in the door of a safe. It was not clear whether departing presidential guards, the army or the public had ransacked the building.
INVESTOR SENTIMENT
Ravalomanana's whereabouts were unclear, while Rajoelina supporters planned a big party in the city's May 13 square. They had accused Ravalomanana of losing touch with the majority of the population who eke out a living on less than $2 a day.
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Rajoelina says his priority will be to address social needs on the huge island, which lies off
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According to Malagasy law, the head of parliament's upper house should have taken over after the president's resignation and organized an election within two months.
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Instead, Rajoelina -- who is six years too young to be president under the constitution -- now heads a transitional government which has pledged to hold a poll within two years.
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The AU had demanded the constitution be respected "scrupulously". But the fact the army refused to take over on Tuesday, as Ravalomanana had requested, means the AU may not brand the events a coup, which would have meant suspending
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"The fact the president let go of power offers the international community a legal footing (for relations with the new government) if it is looking for one," constitutional law expert Jean-Erik Rakotoarisoa told Reuters.
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After recent coups in
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That could further damage investor sentiment towards the continent, which had improved in the last few years partly as a result of a decrease in the frequency of coups and a perception that democracy was becoming better entrenched.
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South African President Kgalema Motlanthe, who is chairman of the SADC regional trade bloc, denounced the change of power -- underlining the diplomatic difficulties Rajoelina may face.
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Still, some analysts said the departure of Ravalomanana -- a 59-year-old self-made dairy tycoon -- would at least end the bloodshed for now and soothe the concerns of foreign investors.
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"The transitional government will probably not take aim at foreign investors in the extractive industries, in part because it will be desperate for those revenues," said Philippe de Pontet, Middle East and Africa analyst at
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