2005 AGOA REPORT FOR CHAD

UNCLAS NDJAMENA 000306

SIPDIS


DEPARTMENT FOR AF/C AND AF/EPS FOR FLEMING; USUN FOR
TAMLYN; LONDON AND PARIS FOR AFRICAWATCHERS

E.O. 12958: N/A
TAGS: ETRD PGOV PHUM CD
SUBJECT: 2005 AGOA REPORT FOR CHAD

REF: STATE 24616


1. Summary: Post submits the following for the 2005 AGOA
Report to the President. End Summary.


2. Status: AGOA Eligible.


3. AGOA Trade and Investment: In 2004, Chad,s GDP was $4.6
billion and per capita income was $536. Petroleum now
dominates Chadian exports to the United States. The Chadian
Government is in the final stage of signing an agreement for
a textile visa to allow Chad to qualify for third country
fabric preferences for Chadian textiles to the United States.



4. Market Economy/Economic Reform/Elimination of Barriers to
U.S. Trade: The government has privatized state-owned
enterprises in the sugar and insurance sectors. In 2004, the
Government developed plans to privatize cotton,
telecommunications, and energy parastatals. No parastatals
were privatized in 2004. A new investment code to encourage
and support foreign investment in Chad is being drafted.
Chad has no price controls or currency restrictions. The
government is implementing a civil service reform strategy
aimed at enhancing personnel management. In 2004, a
computerized system for revenue expenditures was put in
place. The Chad-Cameroon Pipeline and other petroleum
development is enhancing Chad,s capacity for trade and
attracting increasing foreign interest. The bulk of American
investment remains tied to the oil sector, but there is
growing interest in construction, technology, and service
sectors.


5. Pluralism/Rule of Law/Anti-Corruption: Chad,s
democratic institutions remain weak. Irregularities marred
past elections. The ruling party dominates the National
Assembly. A public referendum to remove presidential term
limits will be held in 2005. Long-delayed municipal
elections had still not been held in 2004. Numerous
political opposition parties and human rights groups operate
in Chad. Rule of law also remains weak and the judiciary is
vulnerable to executive branch interference. However, the
Government is taking some steps to increase the capacity of
the judiciary. In December 2004, magistrates were named to
the newly created commercial court to handle investment
disputes. A judicial oversight body has removed and fined
judges for corrupt activities. Corruption continues to
hinder economic growth. In July 2004, the President created
a new ministry and minister responsible for monitoring and
curbing corruption. The Ministry of Finance also began
cracking down on corruption, primarily in the customs
service.


6. Poverty Reduction: IMF approval of Chad,s Poverty
Reduction and Growth Facility Program (PRGF) was delayed in
late 2004 while the Government met several conditions. The
program was approved in early 2005. The World Bank Boards
approved an interim PRSP in July 2000. The final PRSP has not
yet been approved. Data collection on poverty is difficult
to collect given the lack of infrastructure. The 2005 budget
provides for the use of oil revenues in the priority
development sectors of education, health care,
infrastructure, and rural development, with an emphasis on
poverty reduction. The first oil revenues were repatriated
to Chad from a London escrow account in June 2004 and an
oversight body comprised of government and non-government
representatives began reviewing project proposals for the
expenditure of the oil revenues in the priority sectors.


7. Human Rights/Labor/Child Labor: Chad,s human rights
record remained poor. Security forces continued to commit
serious human rights abuses. Arbitrary and prolonged
detentions still occur. These abuses were not routine or
sanctioned by the government. Nonetheless, the government
rarely prosecutes members of the security forces. The
government at times limited freedom of the press and
assembly. Several incidents of press harassment occurred in
2004, but the independent press and radio is free to
criticize the government. Child labor, largely poverty
driven, remains a problem in Chad,s informal sector. There
are reports that some children are trafficked into situations
of forced labor. The Government, however, is involved in
efforts to raise public awareness of the problem, assist

children found in these situations, and punish offenders.
Several Government ministries, including Labor, Education,
Justice, Social Action and the Family, and Public Security in
collaboration with UNICEF are taking steps to combat the
worst forms of child labor. Organized labor is recognized
and active and numerous unions went on strike during 2004,
most notably teachers. The Government ratified ILO 29, 105,
and ILO 182.


8. Outreach: In Chad, the U.S. Embassy in N,Djamena and
USAID worked with the Chadian Chamber of Commerce to organize
a well-attended public information seminar on AGOA in April

2004. The Embassy also established an AGOA resource center
that provides information to the general public on
AGOA-eligible products and the requirements for export to the
United States. In October 2004, the Embassy,s commercial
section hosted one-day seminars in two cities on &Doing
Business with the United States8 for Chadian businessmen and
women. Also, post assisted AGOA committee and the Ministry of
Commerce in drafting visa arrangement between Chad and the
United States to allow Chadian textiles and apparel articles
to claim third country fabric preferences under section 112
of title I of the & Trade and development act of 20008 as
amended by section 3108 of the & Trade act of 20028.

WALL


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