CHAD SCENESETTER

C O N F I D E N T I A L SECTION 01 OF 04 NDJAMENA 001411

SIPDIS

SIPDIS

KHARTOUM PLEASE PASS TO S/E NATSIOS

E.O. 12958: DECL: 12/07/2016
TAGS: PREL PREF PHUM PGOV CD SU
SUBJECT: CHAD SCENESETTER

Classified By: DCM LUCY TAMLYN FOR REASONS 1.4 (B) AND (D)


1. (C) Summary: N'djamena today is a tank-ringed garrison
town as President Idriss Deby Itno defends his 16-year regime
against increasingly emboldened rebels -- many of them from
his own clan. Civil society and the opposition political
parties have called for an inclusive dialogue and an end to
violence. But most Chadians are fearful that peaceful regime
change is impossible given Chad's weak institutions and
history of instability. New-found oil, exploited by a
U.S.-run oil consortium, provided a glimmer of hope to Chad's
9 million inhabitants -- among the world's poorest. However,
the risk of an impending political implosion threatens to set
back economic progress for them as well as jeopardize the
safety of the over 200,000 Sudanese refugees in eastern Chad.
It also portends a chain reaction in the chronically
unstable CAR. Chad has been a good partner with the United
States in counter-terrorism efforts, and its leaders support
a moderate and tolerant Islam. President Deby has expressed
support for an international force in eastern Chad under UN
auspices. Encouraging a peaceful political transition in
Chad and supporting democratic institutions are significant
challenges for our diplomatic efforts; they are also critical
for peace and security in the central African region. End
Summary.

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SIC TRANSIT GLORIA MUNDI
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2. (C) Fireworks and lavish banquets attended the
inauguration of President Deby for a third five-year term on
August 8, 2006. The unprecedented price of oil had sent his
tax receipts skyrocketing. He successfully trounced a rebel
attack on the capitol on April 13 with help from the French
forces stationed in N'djamena. And a much-publicized feud
with the World Bank over use of oil resources for poverty
reduction was resolved to the government's benefit. But the
euphoria would be shortlived. Although President Deby has
presided over Chad's most peaceful era since independence,
his legacy is undermined by his unwillingness to move
seriously toward opening the political arena, and, more
importantly, demonstrating that a peaceful transition of
political power is possible in Chad. Not surprisingly, three
months later, N'djamena is a tank-ringed garrison town as
Deby - a master warrior - fights for his political life and
that of his regime. The population is hunkering down for an
indefinite period of uncertainty and anxiety as rebel groups
splayed along the eastern border make increasing inroads in
eastern Chad. French support for Deby is theoretically
limited to logistics and reconnaissance, but the French press
is wondering how deep the French government would -- or
should -- go to support the regime.


3. (C) Dangers abound within the President's palace as well.
The public enrichment of his Zaghawa clan is a source of
division, both from outsiders jousting for a share of the
spoils, and insiders scheming to maintain the family's place
at the public trough. The state of the President's health -
a constant source of speculation - has led some observers to
predict that he will not live through his current term,
adding to the uncertainty which veils Chad's political
future.

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THE CROSS-BORDER DARFUR CONFLICT
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4. (C) The Darfur conflict is frequently labeled a cross
border conflict. But the nature and roots of the conflict
differ between Chad and Sudan. In Chad, the Zaghawa (the
President's ethnic group) are the masters; in Sudan, the
Zaghawa are the victims. In Chad the government has ceased to
provide basic protection to its citizens as it devotes its
resources to stemming rebel attacks. In the ensuing vacuum
of authority, opportunist attacks by janjaweed (who may be
Chadian or Sudanese arabs) as well as traditional disputes
between pastoralists and nomads have spiraled out of control
and created 90,000 Chadian Internally Displaced Persons
(IDPs). In Sudan, changing land-use patterns which bring more
settled agriculturalists into conflict with pastoralist
groups and the asymmetrical impact of Khartoum's involvement
in inter-ethnic clashes has forged a deadly conflict that can
no longer be resolved by traditional dispute settlement
procedures.

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THE SUDAN FACTOR

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5. (C) Chad's make-up-to-break-up relationship with Sudan has
come full circle - and then some - over the last year. In
the summer of 2005, Chad was still a mediator in the Darfur
conflict. But Sudan's support for Chadian rebels in late
2005 forced Chad's hand, and Chad withdrew from the scene as
a mediator and eventually broke diplomatic relations with
Sudan. Following the signing of the Darfur Peace Agreement
(DPA),although it would appear that President Deby had
everything to gain from peace returning to Darfur, DPA
signatory Minni Minawi accused the regime of supporting DPA
non-signatories.


6. (C) A very public hug between President Deby and President
Bashir at Deby's inauguration ushered in the latest
reconciliation between the two countries. Chad and Sudan
agreed July 26 to reinstate diplomatic relations, and desist
from supporting Darfur rebel movements (Chad) and Chadian
rebels (Sudan). But peace was not long lasting. Chad has
now declared that it is "in a state of war with Sudan" due to
Sudan's continued support for Chadian rebels and written to
Secretary of State Rice asking for U.S. support to defend

SIPDIS
against Khartoum's efforts to put in place an Arab regime in
N'djamena. President Deby is adamant that his Government is
not supporting DPA non-signatories, but most believe that he
has lost control of other forces within his country
(including possibly his half-brother Daoussa Deby) which are
providing refuge and possibly arms, uniforms and vehicles to
Sudanese rebels. It is common knowledge that JEM soldiers
defend the Deby regime -- some, reportedly, standing guard in
front of the Presidential Palace. In sum, while Chad and
Sudan continue to see it in their interests to seek to
maintain a destabilizing wedge in the other's political
affairs, peace in Darfur is unlikely.

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REFUGEES IN CHAD - HOME ALONE AS THE UN DRAWS DOWN
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7. (SBU) Chad's eastern border hosts 12 refugee camps
containing over 200,000 Sudanese refugees and about 90,000
Chadian IDPs. As Chadian rebels make bolder inroads into
Chad, and violent clashes with the Chadian army become more
frequent, eastern Chad has become a zone of peril for the UN
and its partner NGOs. The UN is now in Phase IV security
(similar to Darfur) and has evacuated non-essential staff.
Development projects are at a standstill. Only essential
humanitarian aid -- to refugees as well as IDPs --
continues. President Deby has asked that the refugee camps
be moved further into the interior. UNHCR supports such a
move, as the civilian and humanitarian nature of the camps
has been severely compromised by their proximity to the
border. However, a move would require a modicum of
stability, and a great deal of additional funding. Chad's
environmentally fragile region has been negatively impacted
by the presence of refugees competing for water and firewood
with the local inhabitants. In recognition of the needs of
the local population, both the UN and donors (in particular,
the United States) have earmarked funding specifically to
improve livelihoods and living conditions for local
populations. The United States has also committed over USD
183 million over the past three years to UNHCR, the World
Food Program and other relief agencies in Chad, making it by
far the largest donor to the humanitarian relief effort.

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CHAD AND UNSCR 1706 -- WHAT KIND OF MULTIDIMENSIONAL FORCE?
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8. (C) Following the visit of a UN Department of Peacekeeping
Operations (DPKO) team to Chad and the Central African
Republic, deliberations are ongoing as to the size and nature
the "multidimensional presence" in Chad called for in UN
Security Council Resolution 1706. During French Prime
Minister de Villepin's recent visit to Chad, President Deby
agreed to accept an international force under UN auspices.
He is nevertheless concerned that a UN force would further
provoke the wrath of neighbors Sudan and Libya. Without a
very clearly defined mandate, such a force also runs the risk
of finding itself in the crossfire between the Chadian army,
Chadian rebels, and Sudanese rebels.
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DEBY, OIL, AND DONORS
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9. (U) Chad's first oil began pumping in 2003 and flowing
down the 1070-kilometer pipeline to the Cameroonian coast.

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The largest single U.S. private investment in Africa, the
over $4 billion project is managed by a consortium led by
ExxonMobil. Chad earned USD 260 million from oil revenues in

2005. Projected revenues for 2006 (from all sources) are
approximately USD 450 million and could balloon to over a
billion USD in 2007 if oil prices stay high. The pipeline is
now handling up to 170,000 barrels of oil per day and new oil
fields are being brought on line.


10. (SBU) As part of the financing package arranged by the
World Bank and other lenders, Chad agreed to an innovative
arrangement for managing its oil revenues whereby the bulk of
the royalties would be earmarked for social sectors such as
health and education. An oil revenue management body, with
members drawn from the government, civil society, religious
groups, and labor unions was to oversee expenditure. Not
surprisingly, this pathbreaking experiment in transparency
foundered in December 2005 when the President, strapped for
cash, unilaterally changed the Chadian law governing use of
oil revenues. This provoked a rupture with the World Bank
which has took over five months to resolve. The new
agreement recommits the Government of Chad (GOC) to funding
priority poverty reduction sectors, but allows wiggle room
for spending on security.


11. (SBU) In the meantime, the price of oil has eclipsed
all predictions, and Chad's indirect revenues (coming from
taxes paid by the oil consortium) have skyrocketed. Chad's
oil boom -- expected to last less than a decade -- will
severely test its absorptive capacity and ability to manage
and spend the resources so as to promote sustainable economic
growth and improve the Chadian standard of living (currently
ranked among the lowest in the world.)

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DEBY'S DEDICATION TO FIGHTING TERRORISM
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12. (SBU) In March 2004, the Chadian army engaged in an
intense battle with members of the terrorist group GSPC. The
terrorist leader Al-Para was finally handed over to Algerian
authorities in October of that year. The cooperation of
Chad,s security services and army on counter-terrorism
issues has been excellent, and President Deby welcomes
additional U.S. counter-terrorism assistance provided under
the Trans-Sahara Counter-terrorism Partnership (TSCTP). In
July 2004, U.S. Marines finished training and equipping 179
Chadian soldiers as part of the Pan-Sahel Initiative (PSI),
the TSCTP precursor. These troops learned to respond to
internal threats from terrorism and banditry. In 2005 and
2006, Chad participated in several U.S. military training
programs, including the Flintlock exercise. U.S. assistance
continues with retraining of the PSI unit, and training of
additional recruits. For the most part, Chadian Muslims are
moderate and Muslim leadership in Chad is supportive of U.S.
programs throughout the country. Muslim leaders also work
closely with the government to rein in radical Islamic
elements.

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DEBY, DEMOCRACY, AND DEVELOPMENT
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13. (SBU) Chad's human rights record remains poor and
government institutions lack the capacity and the will to
bring justice to average Chadians. In addition to Deby's
heavy-handed attempt to revise the Constitution to allow him
to run for another term, government harassment of the media
has surfaced periodically. Under the State of Emergency
declared in November (and recently extended for another 6
months),the press is outright censored. The international
corruption watchdog organization, "Transparency
International" named Chad (along with Bangladesh) as the
world's most corrupt country in 2005. Corruption permeates
most aspects of government operations. Civil society remains
fragmented and too weak to pose a counterbalance to
government power. Aside from oil, most Chadians earn a
living through agriculture or livestock. Once a significant
source of revenue, Chad's cotton producing sector has been
unable to successfully pursue opportunities offered by
privatization. U.S. cotton subsidies are frequently blamed
as the source of the collapse of Chad's cotton sector, but
inefficient management by parastatals has as much to do with
the sector's failures. Chad is eligible to export products
under the African Growth and Opportunity Act, but, aside from
oil, has only managed to export small amounts of gum arabic
(used in food processing) and shea butter. Poor to
non-existent infrastructure, corruption and absence of a

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skilled work force hinder foreign and domestic investment.

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THE U.S. PRESENCE IN CHAD
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14. (SBU) The United States closed its USAID Mission in Chad
over ten years ago. A modest amount of U.S. assistance is
managed for the most part directly by the Embassy and
supports grass-roots efforts to improve education, access to
water, and promotion of human rights. The Mission also
maintains a strong outreach to Muslim communities.


15. (SBU) The United States Embassy in Chad has 34 direct
hire-Americans. The American community in Chad has been
reduced significantly following the drawdown of personnel
from the UN, international NGO's and the oil consortium. It
now numbers under 200. The Embassy was on evacuation status
for two months following April 2005 rebel attacks on the
city. Americans are not targets in the struggle between
President Deby and rebel contenders, but the danger of
widespread civil disorder is very real.

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OUR MESSAGE
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16. (SBU) Key points in our message to President Deby
include:

-- Chad-Sudan border: We are concerned by insecurity on the
border and threats to Chadian civilians, Sudanese refugees,
and humanitarian workers. We support deployment of an
international force to counter these threats. We want to
work with Chad on a plan for such a force.

-- Chadian instability: We condemn the use of violence to
overthrow recognized governments. We urge all Chadians to
engage in dialogue to address political grievances.

-- Darfur: We seek an end to violence in Darfur. All
parties must honor the cease-fire, support the Darfur Peace
Agreement, and implement the consensus framework achieved in
Addis Ababa last month.

-- Refugees: We appreciate the welcome that Chadians have
given refugees from Sudan. The United States has provided
over USD 183 million over the last three years for
humanitarian relief in eastern Chad and will continue to
provide support, including for programs to assist Chadian
IDPs and local populations.

-- Democracy: We believe political stability in Chad
requires steps to develop democratic institutions, promote
respect for human rights and rule of law, and create an
inclusive political environment which allows for credible
elections and a peaceful political transition.

-- Development: We stress the importance of Chad's oil
resources being used for poverty reduction.

-- Counter-terrorism: We value our partnership with Chad in
the war against terror. We look forward to working with Chad
on TSCTP and other programs of bilateral cooperation.


17. (U) Tripoli minimize considered.
WALL