Identifier
Created
Classification
Origin
07NDJAMENA790
2007-10-11 15:47:00
UNCLASSIFIED
Embassy Ndjamena
Cable title:  

CHAD: AGOA ELIGIBILITY REVIEW

Tags:  ECON ETRD CD 
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RUEHGI/AMEMBASSY BANGUI PRIORITY 1432
RUEHKH/AMEMBASSY KHARTOUM PRIORITY 0491
RUEHLO/AMEMBASSY LONDON PRIORITY 1736
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RUCNDT/USMISSION USUN NEW YORK PRIORITY 0997
UNCLAS SECTION 01 OF 03 NDJAMENA 000790 

SIPDIS

SIPDIS

DEPARTMENT FOR AF/EPS (JANET POTASH); PASS TO USTR FOR
CONNIE HAMILTON

E.O. 12958: N/A
TAGS: ECON ETRD CD
SUBJECT: CHAD: AGOA ELIGIBILITY REVIEW

REF: STATE 132189

UNCLAS SECTION 01 OF 03 NDJAMENA 000790

SIPDIS

SIPDIS

DEPARTMENT FOR AF/EPS (JANET POTASH); PASS TO USTR FOR
CONNIE HAMILTON

E.O. 12958: N/A
TAGS: ECON ETRD CD
SUBJECT: CHAD: AGOA ELIGIBILITY REVIEW

REF: STATE 132189


1. In response to Reftel, Embassy N'Djamena submits the
following updated AGOA country eligibility information.


2. TPSC subcommittee on AGOA implementation country
eligibility recommendations 2007 state submissions

Country: Chad
Current AGOA Status: Eligible

Country Background: Chad, a landlocked African nation, has a
population of approximately 9.4 million inhabitants. In
2005, the GDP was estimated to be about $5 billion and per
capita income was an estimated $550. President Deby has
governed since taking power by coup d'etat in 1991. The May
2006 presidential election was flawed and major political
opposition groups did not participate. The next presidential
elections are scheduled for 2011.

The Government of Chad has committed to use oil revenues for
poverty reduction and continues to be a strong partner with
the United States in the war on terror. However, an uneven
record in disbursement of oil revenue funds for poverty
reduction projects, and continued human rights violations all
indicate that Chad's record on democracy and good governance
requires improvement. The World Bank and the GOC reached an
agreement in July 2006 on the management of oil revenues
which allowed the government to use some oil revenues for
defined security purposes in addition to social spending.

Comments on Eligibility Requirements


I. Market-based Economy


A. Major Strengths Identified

- As a result of the high international price of oil, the GOC
has seen a significant boost in tax receipts from the
Chad-Cameroon oil pipeline project. The U.S.-supported
consortium continues to bring new fields on-line and conduct
exploration.

- Chad's Government joined the Extractive Industry
Transparency Initiative (EITI) in August 2007. Much work
remains for the GoC to meet all conditions, but the
government has expressed commitment to EITI.


B. Major Issues/Problems Identified

- Chad's cotton industry has experienced a continuing decline
in recent years and the World Bank-supported effort to
privatize the country's cotton parastatal has yet to be
implemented.

- Chad runs the risk of losing access to the IMF's Poverty
Reduction and Growth Facility due to weak fiscal discipline.


- Chad's current weak business environment constrains private
sector-led development. Chad ranks 173 out of 178 countries
on the World Bank's global ranking of the ease of conducting
business.

II. Political Reforms/Rule of Law/Anti-Corruption


A. Major Strengths Identified

- In August 2007, the Government and opposition parties
signed a political accord on electoral reform which, if fully
implemented, would make Chad's electoral system more credible.

- In July 2006, the GOC removed two ministers for alleged
misappropriation of resources, and the Ministry of
Moralization has begun criminal investigations against them.
Other investigations are ongoing.


B. Major Issues/Problems Identified

- Corruption remains a major impediment to economic
development. According to the Transparency International
Index, Chad (in a tie) is the 8th most corrupt country in the
world.

NDJAMENA 00000790 002 OF 003



- According to the Fund for Peace and Foreign Policy
Magazine's Failed States Index, Chad tops the rankings as the
state most at risk of failure (5th).

- The presidential elections in May 2006 were marred by
numerous irregularities and boycotted by the major opposition
parties. Citizens' right to peaceably change their
government remains restricted.

- There is near total impunity for human rights abuses
committed by members of the security forces, which include
extrajudicial killings, torture, beatings, and rapes.

- The judiciary is ineffective, under funded, overburdened,
vulnerable to acts of intimidation and violence, and subject
to executive interference. In practice, government officials
and other influential person often enjoyed immunity from
judicial sanction.

III. Poverty Reduction


A. Major Strengths Identified

- In 2006, the GoC and the World Bank reached an agreement
that committed 70 percent of the country's budgetary
resources to poverty reduction, and called for a
reinforcement of the Oil Revenue Management oversight body
and reform of Chad's public finance system.

- In June 2007, the IMF sent an assessment team to discuss
with the GOC the renewal of Chad's Poverty Reduction and
Growth Facility.


B. Major Issues/Problems Identified

- The Oil Revenue Management oversight body identified
serious problems with contracts in poverty reduction projects
in its 2005 report.

- Poverty is still widespread. According to the Human
Development Index, Chad ranks near the bottom at 171 place
out of 177 countries and territories.

IV. Workers' Rights/Child Labor/Human Rights


A. Major Strengths Identified

- Worker's and children's rights are legally protected.

- The Government is currently harmonizing its legal code with
international labor conventions. Labor unions continue to
play a role in promoting workers rights.

- The Government created a position in 2005 of "Minister of
Human Rights" to advise the government on the protection of
human rights.

- In 2007, the government acknowledged that under-age
military recruitment was a serious problem and signed an
agreement with UNICEF to demobilize child soldiers and
integrate them into civilian life.


B. Major Issues/Problems Identified

- While the law allows unions to conduct most of their
activities without interference, employees of the Ministry of
Interior were not authorized to join the general strike that
occurred from May 2 to September 9, 2007.

- While the law prohibits forced or compulsory labor, there
were continued reports of forced labor in the formal economy
and isolated instances of local authorities demanding forced
labor by children and adults in the rural sector. There were
also reports that children were forced into slavery-related
activities.

- Exploitative child labor remains a serious problem and the
government lacked the means to ensure the enforcement of laws
to protect children from undertaking harmful and forced labor.

- The government acknowledged under-age recruitment into the

NDJAMENA 00000790 003 OF 003


armed forces and there were reports of cases of forced
recruitment into the national army. Security forces operate
with impunity and are responsible for numerous extrajudicial
killings.

- Trafficking in children was a problem. Children were
trafficked for the purpose of forced labor, particularly as
herders or domestic workers. Child prostitution was also
prevalent in the southern oil-producing region of the country.

- The government periodically placed limits on freedom of
speech and the press, including harassment and detention of
journalists, and on freedom of assembly.

- Prison conditions continue to be harsh and
life-threatening.

- Violence against women continues to be a widespread and
serious problem.


V. International Terrorism/U.S. National Security


A. Major Strengths Identified

- Counterterrorism is a priority for the Chadian Government
and Chad continues to be a strong partner with the U.S. in
combating international terrorism.

- 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.

- Chad has ratified or acceded to all international
anti-terrorism conventions.


B. Major Issues/Problems Identified

- 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.
TAMLYN