CHAD AND THE WORLD BANK AGREE TO TRY A RENEWED

UNCLAS NDJAMENA 000374 SIPDIS SENSITIVE PARIS AND LONDON FOR AFRICA WATCHERS, STATE FOR AF - DAS SWAN, AF/C, AND AF/EPS E.O. 12958: N/A TAGS: EFIN ECON IBRD ETRD EPET IMF PGOV CM CD SUBJECT: CHAD AND THE WORLD BANK AGREE TO TRY A RENEWED RELATIONSHIP, BUT THE GOC MUST "BUY OUT" THE BANK'S INVOLVEMENT IN THE OIL SECTOR FIRST. REF: A) NDJAMENA 288, B) NDJAMENA 248, C) NDJAMENA 171 ¶1. (SBU) THE VISIT TO CHAD AUGUST 24-25 OF WORLD BANK VP FOR AFRICA OBIAGELI ESEKWESILI APPEARS TO HAVE LAID THE GROUNDWORK FOR A RECONCILIATION BETWEEN CHAD AND THE BANK, AFTER AN ESTRANGEMENT OF SOME SIX MONTHS, BUT IT WILL COST CHAD SOME USDOLS 60-70 MILLION IN EARLY DEBT REPAYMENT, WHICH WILL ENABLE THE BANK TO END ITS INVOLVEMENT IN THE PETROLEUM SECTOR IN CHAD. ¶2. (SBU) OFFICIALLY, THE GOC WELCOMED THE AGREEMENT IN AN OFFICIAL ANNOUNCEMENT (SEE PARA 4). TAMANA ABDOULAYE, WHO PRESIDES OVER THE PARASTATAL OIL REVENUE MONITORING BODY AND WHO PARTICIPATED IN THE MEETING BETWEEN ESEKWESILI AND THE PRIME MINISTER, TOLD AMBASSADOR AUGUST 28 THAT THE VISIT WAS SUCCESSFUL FROM THE GOC'S POINT OF VIEW AND THAT THE GOC WAS WILLING TO REPAYING ITS DEBT EARLY AND SEE THE BANK WITHDRAW FROM THE OIL SECTOR IN EXCHANGE FOR A RESUMPTION OF THE CHAD-BANK RELATIONSHIP I OTHER SECTORS, LIKE HEALTH AND AGRICULTURE. FORMER PM AND GOVERNMENT PERENNIAL HAROUN KABADI GAVE AMBASSADOR AND DCM LATER THAT SAME DAY THE IMPRESSION THAT THE GOC WAS LESS-THAN-ENTHUSIASTIC ABOUT THE NECESSITY TO PONY UP SUCH A SUM TO OBTAIN A RENEWED RELATIONSHIP WITH THE BANK, SAYING THAT THE BANK DEMANDED THE REPAYMENT BE MADE BEFORE SEPTEMBER 5, WHICH WOULD STRAIN GOC BUDGETARY RESOURCES SEVERELY, AT LEAST IN THE SHORT TERM. ¶3. (SBU) IT APPEARS THAT THE BANK AND THE GOC HAVE AGREED TO A TWO-STEP PROCESS. THE FIRST STEP WOULD BE THE "LIQUIDATION" OF THE GOC-BANK RELATIONSHIP IN THE PETROLEUM SECTOR THROUGH REPAYMENT BY THE GOC OF SOME USDOLS 60-70 MILLION IN DEBT TO THE BANK TO FINANCE THE GOC'S PARTICIPATION IN THE CAMEROON-CHAD OIL PIPELINE PROJECT. THE SECOND STEP WOULD BE THE RESTORATION OF THE CHAD-BANK RELATIONSHIP IN OTHER SECTORS, WITH THE BANK SENDING TO CHAD A RESIDENT REPRESENTATIVE, A POSITION VACANT SINCE FEBRUARY. ¶4. (U) THE GOC RELEASED THE FOLLOWING COMMUNIQUE ON AUGUST 26: LE PREMIER MINISTRE, M. YOUSSOUF SALEH ABBAS, A RECU HIER LA VICE-PRESIDENTE DE LA BANQUE MONDIALE, REGION AFRIQUE, MME OBIAGELI ESEKWEZILI. LA COOPRATION ENTRE LE TCHAD ET LA BANQUE MONDIALE A ETE ABORDEE AU COURS DE CETTE AUDIENCE. DANS UN COMMUNIQUE DE PRESSE RENDU PUBLIC CE MATIN, LE MINISTRE DE L'ECONOMIE ET DU PLAN, M. OUSMANE MATAR BREME INDIQUE QU'A L'ISSUE DES ECHANGES ENTRE LA DELEGATION DE LA BANQUE MONDIALE ET LE GOUVERNEMENT, LES DEUX PARTIES ONT CONVENU DE CE QUI SUIT: -- APURER LES CONTENTIEUX NES DE LA PARTICIPATION DE LA BANQUE MONDIALE AU FINANCEMENT DU PROJET PETROLE; -- ENVISAGER DANS LES MEILLEURS DELAIS LA RELANCE DE LEUR COOPERATION AU MIEUX DES INTERETS DU TCHAD, Y COMPRIS L'OUVERTURE DE LA REPRESENTATION DE LA BANQUE MONDIALE AU TCHAD, PRECISEMENT A N'DJAMNA. ¶5. (SBU) COMMENT: THIS AGREEMENT MAY END A LONG PERIOD OF TENSION BETWEEN THE BANK AND THE GOC, ALTHOUGH EVIDENTLY AT SOME COST TO THE GOC. PM YOUSSOUF SALEH SALEH ABBAS CONSIDERED THE BANK-GOC SQUABBLE A MAJOR THREAT TO THE SUCCESS OF HIS FIVE-MONTH OLD GOVERNMENT OF "NATIONAL REFORM AND RECONCILIATION" (REF C). THE GOC MAY WELL HAVE DECIDED THAT IT WAS WORTH THE CANDLE, IF A USDOLS 60-70 MILLION ONE, TO RESUSCITATE ITS RELATIONSHIP WITH THE WORLD BANK. WE DO NOT KNOW IF THE TERMS OF THE AGREEMENT HAD ANYTHING TO DO WITH THE SUDDEN DISMISSAL LAST WEEK OF FINANCE MINISTER ABAKAR MALLAH MOURTCHA. ¶6. (SBU) COMMENT CONTINUED. IF IMPLEMENTED, THE AGREEMENT COULD CLEAR THE WAY FOR A VISIT OF THE PRIME MINISTER TO WASHINGTON AND NEW YORK, WHICH WOULD PROVIDE AN OPPORTUNITY FOR HIM TO BECOME MORE FAMILIAR WITH USG POSITIONS THROUGH MEETINGS WITH SENIOR US POLICY MAKERS, AS WELL AS WITH SENIOR OFFICIALS AT THE UN AND THE INTERNATIONAL FINANCIAL INSTITUTIONS. WE WILL CONTINUE TO SEEK PERSPECTIVE ON THE ESEKWESILI VISIT, THE RESULTING AGREEMENT, AND THE FUTURE OF THE CHAD-WORLD BANK RELATIONSHIP. END COMMENT. NIGRO