CHAD SCENESETTER FOR DEPUTY SECRETARY NEGROPONTE

C O N F I D E N T I A L SECTION 01 OF 04 NDJAMENA 000302

SIPDIS

SIPDIS

FOR DEPUTY SECRETARY NEGROPONTE

E.O. 12958: DECL: 04/04/2012
TAGS: PGOV PREL PREF OTRA SU CD
SUBJECT: CHAD SCENESETTER FOR DEPUTY SECRETARY NEGROPONTE

Classified By: AMBASSADOR MARC M. WALL FOR REASONS 1.4(B) AND (D)


1. (C) Summary: United States interests in Chad have
evolved over the last seven years. Highlights of the new
relationship include U.S. humanitarian support for the
Sudanese refugees in eastern Chad and U.S. political
leadership in seeking a resolution of the Darfur conflict,
U.S./Chad cooperation on counterterrorism efforts and the
presence of a large U.S.-led oil consortium. Some measure of
stability is necessary to pursue these interests, but
interference by stronger neighbors and weak democratic
institutions contribute to Chad's -- and to the region's --
chronic instability. End summary.

CHAD OVERVIEW
--------------


2. (C) Chad is situated in the increasingly unstable heart of
Africa. Violent regime change has been the rule since
independence in 1960. Chad's estimated 9.4 million people
are primarily farmers or herders; new oil revenues have yet
to trickle down to the village level, and infant mortality
and illiteracy rates are among the world's highest. Chad has
been an excellent partner with the United States in
counter-terrorism efforts, and its leaders support a moderate
and tolerant Islam.


3. (C) Chad is deeply implicated in the Darfur crisis, not
only because Darfurians claim ethnic loyalties with groups in
eastern Chad, but also because Chad and Sudan's soured
relationship is manifested in proxy wars waged against the
other, creating a near-permanent state of insecurity in the
border region. A chronically unstable Chad provides an
inviting target for interference by its stronger neighbors
Libya and Sudan; President Deby's reluctance to accept an
international force to protect humanitarian operations in
eastern Chad reflects his concern that Libya and Sudan will
see this as a provocative act.


4. (C) A more stable Chad would be a better partner in
addressing regional instability, including the Darfur
conflict, the chronically unstable Central Africa Republic
and terrorist threats from extremist ideologies. So far,
President Deby has successfully warded off most challenges to
his 16-year regime by arms and negotiation. Encouraging a
peaceful political transition in Chad and supporting
democratic institutions are significant challenges for our
diplomatic efforts.

President Deby Beats the Odds
--------------


5. (C) President Deby continues to beat the odds. The
unprecedented price of oil had sent his tax receipts
skyrocketing. He successfully trounced a rebel attack on the
capitol in April 2006 with help from French forces stationed
in N'djamena. A much-publicized feud with the World Bank
over use of oil resources for poverty reduction was resolved
to the government's benefit. And he recently brokered a
peace agreements with rebel leader Mahamat Nour. But the
price of his success is high, both financially as well as in
the increasingly strained social fabric of the country. 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. French support for President Deby is
theoretically limited to logistics and reconnaissance, but
the French press is wondering how far the French government
would -- or should -- go to support the regime. Although
President Deby has presided over Chad's most peaceful era
since independence, his legacy risks being undermined by his
unwillingness to move toward opening the political arena,
and, more importantly, demonstrating that a peaceful
transition of political power is possible in Chad

AN INTERNATIONAL FORCE IN EASTERN CHAD?
--------------


6. (SBU) The focus of our dialogue with President Deby at
this time is gaining acceptance of an international force in
eastern Chad. Chad's eastern border hosts 12 refugee camps
containing over 200,000 Sudanese refugees and over 100,000
Chadian IDPs. This environmentally fragile region has been
negatively impacted by the presence of refugees competing for
water and firewood with the local inhabitants. The proximity
to the border compromises the civilian and humanitarian
nature of the camps, and President Deby has asked that the
camps be moved further into the interior.


7. (SBU) As Chadian rebels make bolder inroads into Chad, and
violent clashes with the Chadian army become more frequent,

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eastern Chad has become a zone of peril for the UN and its
partner NGOs. The security vacuum has led to opportunistic
attacks on border towns by armed militias (Chadian or
Sudanese janjaweed)- the most recent one last week resulting
in 65 deaths. The UN is now in Phase IV security (similar to
Darfur) and has evacuated non-essential staff. Many
development projects are at a standstill. Only essential
humanitarian aid -- to refugees as well as IDPs -- continues.


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. President Deby continues
to be concerned that such a force would provoke the wrath of
neighbors Sudan and Libya and be seen by them as a
"back-door" into Sudan. He has argued that an armed gendarme
force is sufficient to protect humanitarian workers, refugees
and IDPs in eastern Chad. He also insists that Chad will be
responsible for its border. Chad has yet to grant permission
for a UN Advance Team to come to Chad to prepare the ground
work for an eventual force

THE SUDAN FACTOR
--------------


9. (C) Chad's make-up-to-break-up relationship with Sudan
has come full circle - and then some - over the last two
years. 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. The 2006 Tripoli agreement, brokered by Libyan
President Qaddafi signaled a renewal of relations and an
agreement to cease supporting rebel movements bent on
destabilizing or overthrowing the other. 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. 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.

DEBY, OIL, AND DONORS
--------------


10. (U) Chad's first oil began pumping in 2003 and flowing
down the 1070-kilometer pipeline to the Cameroonian coast.
The largest single U.S. private investment in Africa, the $6
billion project is managed by a consortium led by ExxonMobil.
In 2007 alone, Chad will earn over USD 1 billion in combined
profit taxes and royalties from the consortium. The pipeline
is now handling up to 170,000 barrels of oil per day and new
oil fields are being brought on line. Experts anticipate a
relatively swift peaking of Chad's oil production and the
life of the oil fields is not expected to exceed 20 years.


11. (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.


12. (SBU) 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.)
Chad's ability to maintain fiscal discipline is severely
taxed by low government capacity and the use of revenues for
security spending. Absent better fiscal discipline, Chad
runs the risk of losing access to the IMF's Poverty Reduction
and Growth Facility.

FIGHTING TERRORISM
--------------

13. (SBU) Chad's vast and porous borders leave it open to
infiltration by terrorist elements. In March 2004, the
Chadian army engaged in an intense battle with members of the

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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.


14. (C) Post also works to counter terrorist threats by
implementing a program of Muslim outreach and providing
development assistance to counter the conditions which can
foster extremism. 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.

DEBY, DEMOCRACY, AND DEVELOPMENT
--------------

15. (SBU) Chad's human rights record remains poor and
government institutions lack the capacity and the will to
bring justice to average Chadians. Under the State of
Emergency declared in November 2006 (and recently extended
for another 6 months),the press is censored. President
Idriss Deby Itno oversaw a return to democracy in 1995 after
seizing power by force, but subsequent presidential and
legislative elections were flawed and the Constitution was
revised in 2005 to abolish Presidential term limits. The
President was re-elected for a third five-year term in May
2006 in an election boycotted by the opposition. However,
some positive steps have been taken concerning electoral
reform for the upcoming communal and legislative elections,
with the support of the European Union (EU) and the UN. If
successful, these will lay a positive foundation for
Presidential elections in 2011.


16. (C) 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. 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
skilled work force hinder foreign and domestic investment.

THE U.S. PRESENCE IN CHAD
--------------


17. (SBU) The United States closed its USAID Mission in Chad
over ten years ago. A modest amount of U.S. assistance is
managed directly by the Embassy and supports grass-roots
efforts to improve education, provide access to water, and
promote human rights. TSCTP development funding for
community empowerment and conflict mitigation in areas where
the risk of Islamic extremism is deemed high is handled by a
USAID sub-contractor, the Academy for Educational Development
(AED). The Mission also maintains a strong outreach to Muslim
communities through its public diplomacy programs.


18. (SBU) The United States Embassy in Chad has 28 direct
hire-Americans. The American community in Chad - never large
- was reduced significantly following the drawdown of
personnel from the UN, international NGO's and the oil
consortium after the April 2006 attacks on N'djamena by
Chadian rebels. As a result of unrest, the Peace Corps
program has been closed and suspended indefinitely.
Americans are not targets in the struggle between President
Deby and rebel contenders, but the danger of widespread civil
disorder is very real.

OUR MESSAGE
--------------

19. (SBU) Key points in our message to President Deby
include:

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-- Chad-Sudan border: We support deployment of a robust
international force to counter threats to Chadian civilians,
Sudanese refugees, and humanitarian workers in eastern Chad.
We intend to consult closely with Chad on the modalities of
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.

-- 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.


20. (U) Tripoli minimize considered.

WALL