VZCZCXYZ0005
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 
 
¶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