VZCZCXYZ0010
RR RUEHWEB

DE RUEHNJ #0137/01 0950819
ZNR UUUUU ZZH
R 040819Z APR 08
FM AMEMBASSY NDJAMENA
TO SECSTATE WASHDC 6139

UNCLAS NDJAMENA 000137 
 
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 
AGOA report.  Paragraphs/topics are organized according to the report 
template and instructions. 
 
-------------------------------------- 
Market Economy 
/Economic Reform 
/Elimination of Trade Barriers 
-------------------------------------- 
 
¶2. Flows of foreign direct investment into Chad continued to 
concentrate almost entirely in the petroleum sector. Chad has a small 
formal sector and a large, thriving informal sector. Almost eighty 
percent of the population is involved in agriculture (subsistence 
farming, herding and fishing.) The 
state remains heavily involved in most economic sectors, and parastatal 
and party-affiliated companies continue to dominate trade and industry. 
Over the past decade, the Government of Chad has made some progress in 
privatizing state enterprises, eliminating price controls and 
liberalizing the economy.  Although the government continues to express 
interest in encouraging foreign direct investment, investors report tha 
the business climate could be significantly improved. Additionally, the 
active rebellion in eastern Chad and widespread corruption dampen Chad' 
economic prospects. 
 
-------------------- 
Trade Liberalization 
-------------------- 
 
¶3. (U) Chad has no discriminatory rules to deter foreign investors. As 
a member 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 policies and commercial law, but limits investment 
in sectors deemed sensitive such as cotton, electricity production, and 
telecommunication in order to protect enterprises. Chad has made little 
progress in reducing impediments to investment such as weak 
infrastructure, chronic energy shortages, high-energy costs, scarcity 
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 
law, political pluralism, and the safeguarding of due process rights. 
In May 2006, flawed Presidential elections were held and major politica 
opposition groups did not participate.  While the law provides for an 
independent judiciary, the judiciary remained weak and subject to 
significant political intervention.  Corruption is 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 
agreement with the World Bank for oil sector infrastructure financing, 
70 percent of government revenue is to be allocated to poverty reductio 
and capacity building efforts.  Expenditure on military spending 
continues to be high, reflecting threats from rebel groups based in 
Sudan.  In early 2007, the International Monetary Fund (IMF) began a 
review of Chad's progress to receive debt relief under the Heavily 
Indebted Poor Country program. The IMF is also considering a renewal of 
Chad's Poverty Reduction and Growth Facility, which failed to take plac 
in late 2005.  Recent comments by the IMF in early 2008 noted concerns 
about Chad's deteriorating fiscal performance 
 
----------------- 
Labor/Child Labor 
----------------- 
 
¶6. Chadian law allows all employees except members of the armed forces 
to join or form unions of their choice without excessive requirements, 
and the government generally respects this right.  Chad ratified ILO 
Convention 29 in 1969 and ILO Convention 105 in 1961.  Unions may 
organize and bargain collectively; however, the law permits imprisonmen 
with forced labor for participation in illegal strikes.  The Chadian 
Government's efforts to combat the worst forms of child labor have been 
centered on laying the legal foundation to meet its commitments to 
international labor conventions aimed at protecting children.  The 
government is also partnering with UNICEF on child protection 
activities. 
 
Although the labor code stipulates that the minimum age for 
employment in the formal sector is 14, the government does not enforce 
the law.  Few children have the opportunity for education beyond the 
primary level.  An estimated 20 percent of children between the ages of 
six and 18 work in abusive, exploitive labor conditions in the urban 
informal sector as street vendors, manual laborers, domestic servants 
and helpers in small shops.  Children throughout the country work in 
agriculture and herding.  Chad has ratified ILO Convention 182, but a 
comprehensive executive decree harmonizing Chad's legal code with ILO 
182 and 138 submitted to the Council of Ministers in 2005 has yet 
to be approved. Human rights problems include restrictions on freedom o 
the press; arrest, detention, and harassment of journalists for 
publishing articles critical of the government; restrictions on freedom 
of assembly; and limitations on freedom of association. 
 
TAMLYN