EU WORKING TO KEEP CHAD ON TRACK FOR 2009

C O N F I D E N T I A L SECTION 01 OF 03 NDJAMENA 000510

SIPDIS

ACCRA FOR REGIONAL USAID

E.O. 12958: DECL: 10/31/2010
TAGS: PREL PGOV ECON PREF EU PINR IBRD EIB CD
SUBJECT: EU WORKING TO KEEP CHAD ON TRACK FOR 2009
ELECTIONS, DESPITE SETBACKS, AND WILL TACKLE GOC OIL
REVENUE MGMT, TOO

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Classified By: DCM REGribbin for reasons 1.4 b&d

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SUMMARY
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1. (C) The Chief European Union Representative in Chad
believes that the electoral reform process that he is
spearheading can result as planned in communal/legislative
elections in 2009, but that success is by no means assured at
this point. The EU Ambassador believes that enough momentum
has developed in the cabinet so that draft legislation to
reestablish a reformed National Electoral Commission would be
sent to Parliament next week, but notes that Zaghawa and
other hard-liners near the President remain committed to
torpedoing progress. Powerful ministers, the "hawks" he
called them -- Bachir at Interior, Younousmi at
Infrastructure and Moussa Faki at Foreign Affairs --
continued to try to undermine the President's and the PM's
reformist inclinations. The EU Ambassador reported agreement
in principle with the President and PM for an EU-funded
expanded transparent mechanism to track all/all oil revenues
and expenditures, with the EIB, the IMF, the World Bank, and
the Oil Revenue "College" as possible partners. The EU Chief
Representative judged that in Chad the greatest development
obstacle is not lack of money, but lack of expertise. END
SUMMARY.

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ELECTORAL REFORM ON TRACK, BUT....
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2. (U) Gilles Desesquelles, Ambassador of the European Union
in Chad since 2006, shared views with the AMB and DCM on
October 29. The EU is the lead donor in funding and
supporting Chad's internal democratic reform process and
Desesquelles himself was the main architect of the August 13,
2007 Accord on electoral reform that undergirds that process
Desesquelles said that finally the long-stalled draft
legislation to reform and reestablish the National Electoral
Commission should be approved in cabinet on October 31 and
sent to Parliament for passage. He noted that now as in the
past it will take a mustering of influence and leverage by
the Prime Minister and the President to move ahead.
Desesquelles identified three ministers - Bachir at Interior,
Younousmi at Infrastructure and Moussa Faki at Foreign
Affairs -- as the hard-liners, or "hawks," as he called them,
dedicated to preservation of a Zaghawa-dominated power
structure that admitted allies of other ethnic groups,
especially Gorane northerners. Desesquelles opined that they
would continue to be obstructionists, working through allies
in the National Assembly. (Faki's obstructionism was
political, Desesquelles surmised, "He wants to be Prime
Minister again.") Nonetheless, the EU ambassador was
optimistic that, once the cabinet logjam was broken, that
legislation could be pushed through by the end of the year.
Desesquelles said he was prepared to break a logjam by going
directly to President Deby to give him a kind of ultimatum.
The National Assembly, the EU Chief noted, had never refused
to respond rapidly and positively to Presidential direction.

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EU TO WORK ON OIL REVENUE TRANSPARENCY
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3. (C) Desesquelles said Chad's recent conflict with the
World Bank and inability to maintain a normal relationship
with more forthcoming IMF underlined the massive weakness in
Chad's public financial management -- lack of a competent,
transparent mechanism to track all extractive-industry
revenue sources, especially those derived from indirect oil
production activities. Direct revenues like royalties and
some other payments were covered by Oil Revenue Monitoring
Body, the so-called "College," set up IAW the GOC-World Bank
agreements of 2002 and 2006. Although the World Bank has
"withdrawn from the petroleum sector," the College remans
charged by the GOC to monitor direct payments which
constitute about a third of all revenues. The indirect
revenues, however, especially taxe on profits nd other such
sources, escape meaninful oversight, never having been
covered by the ank-GOC agreement in the first place. These
indrect revenue sources now constitutetwo-thirds of Chad's
oil revenues. Desesquelles has proposed, and President Deby
and PM Youssouf Saleh Abbas have accepted, Desesquelles's
plan for the EU to fund ways to make the spending of all/all
of Chad's oil revenues transparent. Desesquelles said he

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would approach the IMF, the World Bank, and the European
Investment Bank for assistance on this. we noted that the
College's President had told us that Deby had in January
authorized the College to oversee and report on spending of
both indirect and direct oil revenues, starting in 2009.
Desesquelles sauid he woul be happy to work with the College
as well.

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DEVELOPMENT ISSUES
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4. (C) On longer-range developmental issues, Desesquelles
professed to be an optimist. He said the EU goal was to get
the GOC to match EU spending in priority-sector projects
heath, education, infrastructure (roads and potable water),
and rural development in some meaningful portion -- say, 25
percent to 50 percent of such projects. The GOC performs
better when it partners like this with a Western agency or
organization. Desesquelles said that he has President Deby's
agreement to this EU-GOC partnership onndevelopment spending.


5. (C) Desesquelles said that sadly the biggest development
obstacle was lack of human development in Chad, lack of
skills, preparation, and expertise on the part of Chadian
workers, technicians, administrators, etc. The GOC just did
not have the work force capable of moving projects to
fruition. He noted that roads and water development were the
two areas where tangible results could now be seen, but he
added primarily because of an infusion of foreign expertise.
He lamented the GOC's uncoordinated and unfocussed
"scatter-shot" approach to development. There was no solid
set of national priorities. And far too much authority was
vested in the Ministry of Infrastructure, at least in part
because physical engineering was easier than social
engineering. We agreed, noting that key ministries, like the
Ministry of Health, for example, had not yet seen much
budgetary benefit from oil revenues lately.

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THE ELEPHANTS OF ZAKOUMA
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6. (C) Desesquelles said that the EU was still deeply
interested insaving the elephants of Zakouma Game Park, in
southeast Chad. Most of the animal populations were thriving,
he reported, but the elephant population was still at great
risk from aggressive poachers. Desesquelles said that he was
working with the GIOC to reinforce security at the park,
adding Chadian army troops to the Nomad Guard units already
patrolling there. He said he wa working as well on
admittedly small-scale plans to increase visitors to the
park.

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COMMENT
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7. (C) Desesquelles is energetic, active, and productive. He
has recruited an impressive professional staff of about
twenty and has additional experts placed in ministries as
advisors. As architect and champion of the Electoral Reform
Process, he has the confidence of both ruling-party and
opposition leaders. He appears to have a pretty good working
relationship with President Deby and is of course well-placed
to keep a finger on the pulse of the development process.
That he is willing to extend the EU's purview to responsible
management of the GOC's oil revenues demonstrates both his
understanding of the importance of the revenue-management
issue but also the breadth of his commitment to putting the
EU behind progress in this area, as in others, with resources
and expertise. Despite the efforts of Desesquelles and
others, the average Chadian citizen has not yet come to
believe that the government has a pro-development or
pro-democracy agenda. Such attitudes may evolve if the
democratic reform process ends in credible 2009 elections and
if/when more of the bricks and mortar "partnership" projects
Desesquelles described become more visible.


8. (C regime) We were a bit surprised at Desesquelles's
linking of FORMIN Faki with Bachir and Younousmi, but
consuming personal ambition long has been a leading
motivation for Chadian political actors; there is no reason
that Moussa Faki should be immune to its temptations.
Younousmi, a Gorane, represents the continued strong if not
decisive influence of Goranes in the Zaghawa-dominated Deby.

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