Chad input for 2008 Annual AGOA Report

UNCLAS NDJAMENA 000125

SIPDIS

SIPDIS

DEPARTMENT FOR AF/EPS DAVIDSON AND POTASH

E.O. 12958: N/A
TAGS: ETRD AGOA ECON CD
SUBJECT: Chad input for 2008 Annual AGOA Report

Ref: State 020082


1. Post submits the following input for the 2008 President's Annual AGO
report. Paragraphs/topics are organized according to the report templa
instructions.

-------------- --------------
Market Economy/Economic Reform/Elimination of Trade Barriers
-------------- --------------


2. Flows of foreign direct investment into Chad continued to concentrat
entirely in the petroleum sector. Chad has a small formal sector and a
thriving informal sector. Almost eighty percent of the population is in
agriculture (subsistence farming, herding and fishing.) The state rema
involved in most economic sectors, and parastatal and party-affiliated
continue to dominate trade and industry. Over the past decade, the Gove
Chad has made some progress in privatizing state enterprises, eliminati
controls and liberalizing the economy. Although the government continu
express interest in encouraging foreign direct investment, investors re
business climate could be significantly improved. Additionally, the act
rebellion in eastern Chad and widespread corruption dampen Chad's econo
prospects.

--------------
Trade Liberalization
--------------


3. (U) Chad has no discriminatory rules to deter foreign investors. As
of CEMAC (the Central African Economic and Monetary Community) and a
signatory to OHADA (the Organization for the Harmonization of African
Business Law),Chad participates in regional efforts to standardize tax
and commercial law, but limits investment in sectors deemed sensitive s
cotton, electricity production, and telecommunication in order to prote
enterprises. Chad has made little progress in reducing impediments to i
such as weak infrastructure, chronic energy shortages, high-energy cost
of skilled labor, a high tax burden, and corruption.

--------------
Political Pluralism/
Rule of Law/
Anti-Corruption
--------------


4. The government of Chad continues to have a weak record on rule of la
political pluralism, and the safeguarding of due process rights. In Ma
flawed Presidential elections were held and major political opposition
not participate. While the law provides for an independent judiciary,
remained weak and subject to significant political intervention. Corru
universally acknowledged as one of the most serious problems in Chad.

--------------
Poverty Reduction
--------------


5. Chad remains one of the poorest countries in the world. Under an ag
with the World Bank for oil sector infrastructure financing, 70 percent
government revenue is to be allocated to poverty reduction and capacity
efforts. Expenditure on military spending continues to be high, reflec
from rebel groups based in Sudan. In early 2007, the International Mon
Fund (IMF) began a review of Chad's progress to receive debt relief und
Heavily Indebted Poor Country program. The IMF is also considering a r
of Chad's Poverty Reduction and Growth Facility, which failed to take p
late 2005. Recent comments by the IMF in early 2008 noted concerns abo
Chad's deteriorating fiscal performance

--------------
Labor/Child Labor
--------------


6. Chadian law allows all employees except members of the armed forces
or form unions of their choice without excessive requirements, and the
government generally respects this right. Chad ratified ILO Convention
1969 and ILO Convention 105 in 1961. Unions may organize and bargain
collectively; however, the law permits imprisonment with forced labor f
participation in illegal strikes. The Chadian Government's efforts to
worst forms of child labor have been centered on laying the legal found
meet its commitments to international labor conventions aimed at protec
children. The government is also partnering with UNICEF on child prote
activities. Although the labor code stipulates that the minimum age fo
employment in the formal sector is 14, the government does not enforce
Few children have the opportunity for education beyond the primary leve
estimated 20 percent of children between the ages of six and 18 work in
exploitive labor conditions in the urban informal sector as street vend
laborers, domestic servants and helpers in small shops. Children throu
country work in agriculture and herding. Chad has ratified ILO Convent
but a comprehensive executive decree harmonizing Chad's legal code with
182 and 138 submitted to the Council of Ministers in 2005 has yet to be

Human rights problems include restrictions on freedom of the press; arr
detention, and harassment of journalists for publishing articles critic
government; restrictions on freedom of assembly; and limitations on fre
association.

TAMLYN