Identifier
Created
Classification
Origin
08NDJAMENA288
2008-07-14 13:28:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ndjamena
Cable title:  

HARD TIMES: CHAD NEEDS USG HELP TO MEND FENCES

Tags:  PREL ECON EFIN IMF IBRD EPET ETRD CD 
pdf how-to read a cable
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RR RUEHWEB

DE RUEHNJ #0288/01 1961328
ZNR UUUUU ZZH
R 141328Z JUL 08
FM AMEMBASSY NDJAMENA
TO RUEHC/SECSTATE WASHDC 6322
INFO RUEHFR/AMEMBASSY PARIS 2323
RUEHLO/AMEMBASSY LONDON 1769
RUEHDS/AMEMBASSY ADDIS ABABA 0995
UNCLAS NDJAMENA 000288 

SENSITIVE

SIPDIS

STATE FOR AF/C AND AF/EPS
PARIS AND LONDON FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: PREL ECON EFIN IMF IBRD EPET ETRD CD
SUBJECT: HARD TIMES: CHAD NEEDS USG HELP TO MEND FENCES
WITH THE BANK AND THE FUND

REF: Ndjamena 0171

UNCLAS NDJAMENA 000288

SENSITIVE

SIPDIS

STATE FOR AF/C AND AF/EPS
PARIS AND LONDON FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: PREL ECON EFIN IMF IBRD EPET ETRD CD
SUBJECT: HARD TIMES: CHAD NEEDS USG HELP TO MEND FENCES
WITH THE BANK AND THE FUND

REF: Ndjamena 0171


1. (U) This is an action message: See para 15.

--------------
Summary:
--------------


2. (SBU) Chad's new Prime Minister believes that the World Bank
already has unfairly and unilaterally decided at the highest level
to end its relationship with Chad in the petroleum sector, which
would be a major blow to his government's ability to implement its
ambitious reform agenda. The IMF delegation currently in Chad is
seeking seriously to engage with the GOC to put Chad on an
extraordinary "staff monitored program" aimed at getting the IMF-GOC
relationship back on a more normal track in the near future. The
IMF delegation appears to understand the geopolitical situation in
which the GOC finds itself in a highly unstable region and with
massive Darfur refugee and IDP presence in Chad, and is under no
illusions as to Chad's capacity to reform its practices to put its
financial and budgetary houses in better order. Even so, the IMF is
trying not/not to "give up on Chad," in stark contrast to what the
bank seems poised to do.


3. (SBU) Embassy N'Djamena believes that USG interests in Chad,
including relieving the humanitarian tragedy emanating from Darfur
and seeking a resolution of the Darfur conflict, require helping
Chad to make progress on the national reconciliation agenda and
political reform program of new Prime Minister Youssouf Saleh Abbas.
A breakdown in the relationship of Chad with the IFI's could deal a
severe blow to the new government's chances of success; undermine
confidence in the international community's humanitarian efforts in
eastern Chad, including EUFOR and MINURCAT, as well as its efforts
to resolve the Darfur crisis; and undercut USG interests by
complicating the operations of the Chad-Cameroon oil pipeline
project, a major American private investment. We believe that the
department should intervene to advocate at the highest possible
levels that the Bank and the Fund make their best efforts to

maintain a productive relationship with Chad. End Summary.

--------------
Chad and the World Bank
--------------


4. (SBU) On Friday, 11 July, Prime Minister Youssouf Saleh Abbas
convoked Ambasssador Nigro to discuss the Chad-World Bank
relationship. The Prime Minister said that he now had firm evidence
that the problems in the relationship were the result of an
"ideological" opposition on the part of President Zoellick to
continuing the Chad-World Bank relationship in the petroleum sector.
He said that the source of his information was from inside the Bank
itself.


5. (SBU) The Prime Minister described the course of relations since
he came to the Primature. First, there was the Bank's failure to
send its resident representative back to Chad after the events of
February. Then, there was the Bank's failure to engage with the
Chadian delegation in Washington in April, when the delegation had
been told that a Presidential letter would be necessary before
normal engagement might resume. Then there was the request that the
Prime Minister plan to come to Washington to discuss the
relationship. The Prime Minister said that he had complied in good
faith, writing himself to the Bank and to the IMF that he wanted to
maintain Chad's relationship with both institutions and that he
planned to visit Washington in early July.


6. (SBU) Then the bank had said that Mr. Zoellick was not available
at that time, so the Prime Minister rescheduled his visit to a later
date in July. Finally, there was a communication from the bank
through the Chad administrator that the Government of Chad must meet
some requirements - laid out in eight points - before further
discussion of a visit to Washington could be discussed. The Prime
Minister said it was evident from this chain of communications that
the Bank was seeking to break with Chad at least in the petroleum
sector.


7. (SBU) The Prime Minister complained that the Bank was singling
out Chad for punishment unfairly. The World Bank continued to have
petroleum-sector relationships with Congo-Brazzaville, the
Democratic Republic of Congo, and Sudan, despite record of
non-compliance with norms by both those governments. Even if the
Bank considered only Chad's performance to be so poor that the
relationship must be ended, then the Bank should at least give the
GOC a chance to explain its side of the story before making its
definitive decision.



8. (SBU) The Prime Minister said that Chad had welcomed the IMF's
decision to send a delegation to Chad and that he had instructed his
ministers to work seriously with the delegation. The Prime Minister
said that he had requested that the Bank send a delegation as well
but had received no answer. The Prime Minister said that he had
proposed that a Chadian delegation could meet a Bank delegation
outside of Chad, such as in Paris. But that had been met by the
listing of eight preconditions, as he had mentioned earlier.


9. (SBU) The Prime Minister repeated that he was committed to
building a better relationship with the World Bank, but that the
Bank was evidently opposed to this. He said that a break with the
Bank would be a severe blow to his new government, which needed the
help of the international community, including the IFI's, if it were
to succeed in "turning the page" on the errors of the past and make
real progress for the Chadian people. The Prime Minister said that
the Bank should take into account Chad's current situation and the
role it was playing in midst of a regional security and humanitarian
crisis. This was not the time for the World Bank "to slam the door"
in Chad's face. The Prime Minister requested USG support in the
GOC's attempt to maintain normal, across-the-board relationships
with the IMF and the World Bank.

--------------
IMF Delegation in Chad
--------------


10. (SBU) An IMF technical delegation arrived in town last week.
Ambassador met with the delegation over brunch on Saturday, July 12.
The delegation head said that they were seeking seriously to engage
with the GOC again after the most recent failure of Chad to perform
to IMF criteria. He said the current goal might be to put Chad on a
"staff monitored program," which has no financial incentives for
Chad and which is aimed at putting the IMF-GOC relationship back on
a more normal track in the near future, as early as six months from
now, if Chad performed adequately. The IMF delegation was
cognizant of Chad's history of internal instability, as well as of
the difficult geopolitical situation in which the country finds
itself today -- in a highly unstable region, with massive Darfur
refugee and IDP burdens, and with active enmity for its neighbor to
the east.


11. (SBU) At the same time, the delegation's analysis of Chad's
financial and budgetary problems indicated that it was under no
illusions as to Chad's current performance and future capacity to
reform its practices and to put its financial and budgetary houses
in better order. The delegation's position seemed to be that it was
too early to give up on the IFI-Chad relationship and that the
importance of Chad efforts to resolve regional tensions and provide
humanitarian assistance to refugees and IDPs argued in favor of
continued efforts to work with the GOC to make progress in managing
its petroleum revenues responsibly.
--------------
Comment:
--------------


12. (SBU) The World Bank and the IMF appear to be pursuing rather
different courses of action regarding Chad. While the Bank seems to
be engineering a break with Chad, at least in the key petroleum
sector, the IMF seems to be doing its best to maintain a working
relationship with Chad, despite previous setbacks and continued
marginal performance on Chad's part. In short, the IMF seems intent
not/not to "give up on Chad," in stark contrast to what the bank
seems poised to do.


13. (SBU) Embassy Ndjamena believes that USG interests in Chad,
including relieving the humanitarian tragedy emanating from Darfur
and seeking a resolution of the Darfur conflict, require helping
Chad to make progress on the national reconciliation agenda and
political reform program of new Prime Minister Youssouf Saleh Abbas.
A breakdown in the relationship of Chad with the IFI's would be a
severe blow to the new government's chances of success. It could
undermine confidence in the international community's humanitarian
efforts in eastern Chad, including EUFOR and MINURCAT, as well as
its efforts to resolve the Darfur crisis. And it could undercut USG
interests by complicating the operations of the Chad-Cameroon oil
pipeline project, a major American private investment in the region.



14. (SBU) Embassy Ndjamena believes that the Department should
intervene to advocate at the highest possible levels at the Bank and
at the IMF for both IFI's to make their best efforts to maintain a
productive relationship with Chad. It is especially important that
the Chad-World Bank relationship in the petroleum sector be

maintained, in order not to complicate the operation in the
Chad-Cameroon pipeline project. End Comment.

--------------
Action request
--------------


15. (SBU) Action Request: That the Department intervene at the
highest possible levels at the World Bank and at the IMF to ensure
that both institutions make their best efforts to maintain a
productive relationship with Chad.

NIGRO