AGOA ELIGIBILITY REVIEW FOR CHAD

UNCLAS NDJAMENA 001500

SIPDIS


DEPARTMENT FOR AF, EB, USTR FOR CHAMILTON

E.O. 12958: N/A
TAGS: ETRD PREL ELAB PHUM CD AGOA USTR
SUBJECT: AGOA ELIGIBILITY REVIEW FOR CHAD

REF: STATE 170577


1. Post recommends that Chad continue to be deemed compliant
with AGOA eligibility requirements. The government continues
to support the Revenue Management Process, and is taking
measures to improve the human rights situation, reform the
military, and curb corruption. The country also continues to
be a strong U.S. partner in the war on terrorism. However,
irregularities in a recent referendum, a critical verification
report by the Revenue Management College, and continued human
rights violations all indicate that Chad's record on democracy
and good governance requires improvement. Post will continue
to work with the host government to improve the capacity of
its democratic institutions. Remarks on each specific
criterion follow.


2. Country Background Summary: Population of 8.9 million.
2004 GDP was estimated at $4 billion and per capita income at
$257. A public referendum was held in June 2005 to alter the
Constitution to allow the President to run for a third term.
Several ministers changed positions in August 2006.


3. Market-based Economy: A World Bank-proposed plan to
privatize the country's cotton parastatal was approved this
year. The government is also planning to work with the Bank
to develop plans to privatize the telecommunication and energy
sectors. Foreign interest in other economic sectors in Chad
continues to grow as a result of the new oil export
activities. Unfortunately, an investment code to encourage and
support foreign investment has still not been developed.



4. Political Reforms/Rule of Law/Anti-Corruption: The
government has identified problems within its judicial and
democratic institutions and is working to implement
recommendations from the internal review of the judiciary.
The Oil Revenue Management College continued to oversee the
expenditure of oil revenues in priority sectors. The College
completed its first project verification report in May 2005
and has made recommendations to priority sector ministries to
correct deficiencies. The Government hosted an internal
review of the military with the aim of downsizing and
professionalizing the military in April 2005. It also created
an anti-corruption Ministry that is developing ethics codes
for the various ministries, reaching out to religious groups
and civil society to encourage values of anti-corruption, and
beginning to sensitize the population to the negative effects
of corruption.


5. A public referendum to amend the Constitution to allow
unlimited presidential terms held in June 2005 was flawed and
marred by numerous irregularities. The opposition and civil
society refuse to participate in upcoming communal,
legislative, and presidential elections. These groups are
pursuing a dialogue on the modalities of a political
transition to make the electoral process more transparent.
Finally, the Oil Revenue Management College's project
verification report identified serious problems with contracts
in several priority sectors.


6. Poverty Reduction: The IMF re-implemented its Poverty
Reduction Growth Facility program in Chad in February, and
gave a positive review of the program in August.
Additionally, oil investment activities have generated
economic growth in the southern region, as well as attracted
new foreign investment. Unfortunately, a weak budgetary
system makes the implementation of poverty reduction projects
extremely challenging, and transportation and communication
deficiencies continue to make timely data collection a
challenge. Over the past year, Government officials have
expressed their desire to amend the oil revenue management law
to include security services and the military as priority
sectors.



7. Workers' Rights/Child Labor/Human Rights: Worker and
children's rights are legally protected. . The Government is
currently harmonizing its legal code with international labor
conventions. Labor unions continue to play an important role
in promoting workers rights and promoting government reform.
The Government recently created a position of "Minister of
Human Rights" to advise the government on the promotion of
human rights. The new Minister's first priority is to improve
the situation of Chad's prisons and releasing prisoners who
are awaiting trial for minor offenses.


8. Several journalists were arrested in the past year under
questionable pretenses, but all have been released. Child
Labor laws have been very difficult to enforce due to lack of
capacity and cultural factors. Security forces operate with
impunity and are responsible for numerous extrajudicial
killings. Violence and societal discrimination against women,

trafficking in persons, and forced child labor are still
common practices.



9. International Terrorism/U.S. National Security:
Counterterrorism is an important priority for the Chadian
Government. Chad continues to be an important partner in
combating international terrorism. TSTCI and ATA assistance
has led to the training of several military and police units.
The Government has identified its weaknesses in securing its
borders and the need for more training and equipment for
border and airport security and the importance of undertaking
an anti-corruption campaign. This year, Chad has ratified
three of the twelve counterterrorism conventions. Three
others are in the process of ratification. In June 2004, Chad
worked with the United Nations Drug Control's Terrorism Branch
to begin the ratification of all twelve conventions. The
country's rugged terrain, porous borders, and the lack of
equipment for the military and national police hinder the
Government's ability to combat terrorist activity.


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