TRANSFORMING CHAD: A CAUTIONARY TALE

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SUBJECT: TRANSFORMING CHAD: A CAUTIONARY TALE


1. (SBU) SUMMARY: Over the last three years the United
States has devoted more attention and resources to Chad than
at any time since the joint fight against Libyan aggression
in the 1980's. Chad is a major beneficiary of the Trans
Saharan Counter-Terrorism Partnership initiative. It
receives significant technical help as a test case for the
transparent management of oil revenues. It is a player in
diplomatic initiatives for peace in Darfur. And it is host
to a massive relief effort for nearly half a million refugees
and displaced persons. But with a few exceptions, the
results have been far from what I hoped when I arrived three
years ago. In some areas Chad has actually gone backwards.
Regime survival trumped all other considerations. We should
continue our support for Chad on the issues that engage our
interests, but we also need to encourage efforts to address
the democratic deficit inside Chad, which is at the root of
its fragility. END SUMMARY


2. (U) The last three years in Chad have provided no
shortage of material for an account by this departing
ambassador of what happened on his watch. This message
examines what we tried to do on counter-terrorism, oil,
Darfur, and refugees and displaced persons. A subsequent
message will look at the Chadian roots of the conflict that
complicated, if not stymied, our efforts in each of these
areas.

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Counter-Terrorism and Counter-Insurgency
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3. (SBU) In early June 2004, at the same time as Chadian
rebels were holding the notorious leader of the Algerian
terrorist Salafist Group for Preaching and Combat in a cave
in the Tibesti Mountains of Chad's far north, a squadron of
U.S. Marines was about to arrive to begin training the first
company of Chadian soldiers under the recently launched Pan
Sahel Initiative. Three years later, El Para had been handed
over to Algerian authorities; our intel cooperation
reinforced; hundreds of law enforcement personnel trained
under our Anti-Terrorist Assistance program; our outreach to
Chad's large Muslim community enhanced; and the capabilities
of the Chadian military strengthened under the Trans Saharan
Counter-Terrorism Partnership (TSCTP). This was not hard to
achieve. Chad is eager to be our partner in the war on
terrorism. It welcomes additional security assistance.
Despite harboring isolated pockets of extremist sympathizers,
its Islamic majority and leadership remain moderate,
tolerant, and pro-Western. Notwithstanding the hard feelings
from a bungled attempt with the French to upgrade intel
collection in eastern Chad in July 2005, our partnership with
Chad on counter-terrorism made impressive strides.


4. (SBU) But we have also run into problems implementing
these programs, some of them of our own making. Resources
available for economic assistance and public diplomacy
outreach have not kept up with those for Chad's military and
police. The problems have also arisen because of Chad's own
precarious political and security environment. While for us
the concern is fighting terrorism, for Chad's regime the
concern that overrides everything is squelching the rebellion
that has simmered in eastern Chad since late 2005. This
insurgency has complicated and at times disrupted our efforts
to work with Chad's military. For much of the last year, the
first anti-terrorism unit we worked with has been unavailable
for training, having been deployed guarding the strategic
border crossing at Adre. On one occasion, our EUCOM trainers
were fired on by a Chadian army helicopter that mistook them
for a rebel column advancing on the capital.


5. (SBU) Much of the Chadian public is quick to interpret
outside military support as propping up a discredited regime
that refuses to accept peaceful democratic change. While the
highly visible presence of the French military has largely
kept us from being seen as Deby's palace guards so far, we
increasingly risk being seen in this light. We need to work
to complement our cooperation with Chad's security services
by discretely but visibly promoting political reform, by
providing greater support for economic development and public
diplomacy, and by adjusting the pace and scale of TSCTP
implementation to take account of shifting political and
security conditions.

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Oil Money for Arms or the Poor?
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6. (U) In July 2004 Chad received its first check from
ExxonMobil and the other partners in the new oil production
consortium. By the end of last year it had already received

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nearly US dols 1.3 billion and should receive nearly as much
this year, astronomical sums in this dirt-poor country and
significantly greater than anticipated at the start of the
project. Whether Chad could absorb such inflows without
succumbing to the "resource curse" that has undone other
similarly poor and weakly governed countries was at the heart
of the debate whether the World Bank should support the
project. In the end it decided to do so, based on Chad's
commitment to spend 85 percent of the royalties on
poverty-alleviation projects. With support from U.S.
Treasury technical advisors, it also established an
independent review board to assure transparency. The World
Bank's participation helped unlock the financing for the US
dols 6.0 billion now invested in the project, said to be the
largest single U.S. private investment in Africa.


7. (SBU) The jury is still out, but after nearly three
years it appears that the World Bank's critics were right.
At the end of 2005, President Deby, under pressure to pay for
the fight against the rebellion in eastern Chad, pushed
through amendments that overturned key parts of the oil
revenue law. The World Bank responded by blocking transfers
of oil royalty payments into Chad's accounts. With the
insurgency raging and the blocked funds accumulating,
President Deby reacted with an ultimatum: either release the
funds or shut down oil production. By the summer of 2006 a
messy compromise was reached which allowed Chad to spend more
on the military but still commit the bulk of revenues -- not
only oil royalties but also oil taxes and non-oil revenues --
to agreed priority sectors.


8. (SBU) Even this additional leeway was not enough. In
the first five months of this year spending on arms and
equipment was already almost five times the amount budgeted
for the whole year. This, together with runaway
infrastructure spending, rendered the budget agreement with
the IMF meaningless. The principal beneficiaries of Chad's
oil bonanza have turned out to be arms merchants and a few
road-building firms, not its poor. Not surprisingly,
countering threats to the regime took precedence over
promoting development and good governance. If the current
relative calm in eastern Chad continues, pressures for more
military spending may diminish. At this stage, the World
Bank, IMF, and the EU remain committed to supporting efforts
to keep Chad's public finances on track. Despite the
uncertain prospects, the United States should too. We hope
funding can be found to allow us to continue providing
technical assistance for Chad's oil revenue management
program.

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Chad's Darfur Dilemmas
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9. (U) Chad and Sudan are inextricably linked in Darfur.
Bashir helped Deby take power from Darfur in 1990. The
Zaghawa elite in Chad has close ties to the Zaghawa rebels in
Darfur, and no doubt played a role in the rise of the
rebellion. Deby's own role is nuanced. By early 2004 Chad
was already foundering in the cross-currents of the conflict
in Darfur. Deby tried to broker a ceasefire agreement that
spring, but it quickly broke down. In May he barely survived
a coup attempt, led by close family members who felt he was
not doing enough to come to the defense of their Zaghawa
clansmen victimized by the violence in Darfur. He made
another attempt to end the conflict when in early 2005 he
convened an African Union summit meeting in N'Djamena that
included President Bashir among the participants. That
effort too soon collapsed. The stirring of the Chadian
rebellion, stoked by Sudan's suspicions of Deby, aroused
Deby's suspicions of Sudanese complicity. Over the next year
he gave up any pretense of neutrality, pulling out of the
Darfur mediation effort and increasingly siding with the
Darfur rebels. In April 2006 he broke relations with Khartoum
and expelled its ambassador.


10. (SBU) In February 2006 Qadhafi brokered the first of a
series of agreements between the two feuding neighbors. In
August he even succeeded in convincing Bashir to return to
N'Djamena to attend Deby's inauguration to a third term as
president. Relations deteriorated in the fall as Deby fended
off repeated rebel attacks coming from the Chad-Sudan border.
In April 2007 Chadian soldiers pursuing rebels into Sudanese
territory clashed with Sudanese regular army troops. Yet
still another agreement between Deby and Bashir to stop
supporting rebels aimed at the other -- this one signed in
Riyadh with Saudi Arabia's backing -- has contributed to a
lull in rebel skirmishes in recent weeks. The coming rainy
season should help keep the border region quiet through the
rest of the summer, but the track record for this relative

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calm lasting beyond that is not good.


11. (SBU) Chad's entanglement in the conflict in Darfur has
complicated its role as a partner in peace efforts there.
Deby has called repeatedly for international intervention in
Darfur. He saw the spreading violence early on as not only
threatening his hold on power but also having the potential
of triggering a regional upheaval as explosive as the one in
Africa's Great Lakes region. But his ability to play a
constructive role has been compromised by his own struggle to
fend off the insurgency against him. He -- or at least his
close family members and allies -- provided support to the
Darfur rebel armies in exchange for them supporting him as a
proxy force against the Sudanese-supported Chadian rebels.
His worries about further antagonizing Libya and Sudan made
him reluctant to accept a UN peacekeeping force to help
stabilize his eastern border. Although now agreeing in
principle to a French plan for an international security
force, he is skittish about going along with harsher measures
aimed at Khartoum if it means allowing Chad to be used as a
Trojan Horse against his neighbor. We need to be aware of
these sensitivities, and we should be careful how far we go
in embracing his regime in our effort to secure his
cooperation on Darfur.

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Preventing Humanitarian Catastrophe
--------------


12. (U) Perhaps our worthiest accomplishment in Chad over
the last three years is the result of Chad's biggest tragedy.
Though violence in Darfur and now in eastern Chad continues,
a concerted international response has mitigated the terrible
humanitarian consequences. In late 2003 and early 2004
nearly 200,000 Sudanese victims made their way west to the
border and settled in a string of make-shift camps just
inside Chad. There were doubts that enough food and
medicines could get there before the rainy season rendered
deliveries virtually impossible. Support improved
considerably over the next year, and the numbers of refugees
from Sudan and the Central African Republic stabilized. The
emergency took another turn for the worse last year as mainly
Chadian-on-Chadian ethnic violence flared up, especially in
the Dar Sila region south of Abeche. By last spring, Chad
harbored not only nearly 300,000 refugees from Sudan and CAR,
but also over 150,000 of its own people who had fled attacks
on their villages for safehaven further inside their country.


13. (SBU) The challenge of keeping nearly half a million
people alive in a region as destitute as eastern Chad is
daunting. The border area barely supports its existing
populations in the best of times. Equidistant from the
Mediterranean, the Red Sea, and the Gulf of Guinea, it is as
far away from a seacoast as you can get in Africa. The area
is virtually outside control by state authority, impassable
during the rains, and at times a virtual war zone. The
humanitarian operation there has been described as not the
biggest ever undertaken, but possibly the most logistically
challenging. U.S. assistance has been the essential linchpin
in this effort. We are the largest donor by far. We moved
relatively early to address the needs of the Chadian host
populations, many of them whose lives are harsher than the
Sudanese refugees in the nearby camps. We have begun
mobilizing assistance for the swelling numbers of Chadian
IDP's. The most urgent need now is to assure humanitarian
security. That will mean scaling back our ambitions for a
large international force with a mandate to stabilize the
border region, and instead supporting the French plan for a
mixed European-Chadian force to protect the refugees, IDP's,
and UN and NGO workers.

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Worthy Goals Whipsawed by Harsh Realities
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14. (SBU) The last three years in Chad provide a cautionary
tale on the perils of promoting transformation in a country
gripped by ethnic conflict and a border insurgency. Our work
has centered around four goals: counter-terrorism, oil
revenue management, Darfur peace efforts, and humanitarian
relief. The harsh realities of the insurgency in eastern
Chad have hobbled Chad's ability to be an effective partner
with us in pursuing each of these goals. This
regime-threatening conflict has interfered with its
cooperation on TSCTP, diverted oil revenues destined for its
poor, forced it into siding with the Sudanese rebel groups
opposed to the Darfur Peace Agreement, and worsened the
humanitarian emergency on its border with Sudan. For Chad to
be the partner we want it to be and need it to be, the
insurgency in eastern Chad must be understood and steps taken

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to resolve it. While aggravated by instability spreading
from Darfur, that conflict stems importantly from the failure
of Chad's leadership to address another fundamental goal of
our policy here, i.e., the consolidation of democratic
governance. What went wrong and what can be done to deal
with it is the subject of a subsequent message.
WALL