VZCZCXRO7130
PP RUEHGI
DE RUEHNJ #0790/01 2841547
ZNR UUUUU ZZH
P 111547Z OCT 07
FM AMEMBASSY NDJAMENA
TO RUEHC/SECSTATE WASHDC PRIORITY 5782
INFO RUEHUJA/AMEMBASSY ABUJA PRIORITY 1439
RUEHGI/AMEMBASSY BANGUI PRIORITY 1432
RUEHKH/AMEMBASSY KHARTOUM PRIORITY 0491
RUEHLO/AMEMBASSY LONDON PRIORITY 1736
RUEHNM/AMEMBASSY NIAMEY PRIORITY 2996
RUEHFR/AMEMBASSY PARIS PRIORITY 2255
RUEHYD/AMEMBASSY YAOUNDE PRIORITY 1614
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 
 
¶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