VZCZCXRO0018
OO RUEHGI RUEHMA RUEHROV
DE RUEHNJ #0509 3051130
ZNR UUUUU ZZH
O 311130Z OCT 08
FM AMEMBASSY NDJAMENA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6554
INFO RUCNFUR/DARFUR COLLECTIVE PRIORITY
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0497

UNCLAS NDJAMENA 000509 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PGOV IMF IBRD MASS US CD
SUBJECT: IMF DELEGATION TO VISIT CHAD AS "STAFF MONITORED 
PROGRAM" FOR 3RD AND 4TH QTR 2008 FOUNDERS 
 
REF: A. A) NDJAMENA 493 
     ¶B. B) NDJAMENA 431 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1.  (SBU)  IMF RESIDENT REPRESENTATIVE JOSEPH KARANGWA TOLD 
AMBASSADOR OCTOBER 30 THAT THE IFI WILL SEND AN 
"OVERSIGHT DELEGATION" TO CHAD EARLY NEXT MONTH EVEN THOUGH 
THE FUND'S AMBITIOUS PLAN TO PUT CHAD ON A "STAFF MANAGED 
PROGRAM" FOR THE SECOND HALF OF 2008 HAS FAILED.  THE 
REASON FOR THE FAILURE WAS POOR GOC PERFORMANCE WHICH DID 
NOT PERMIT THE FUND TO CERTIFY COMPLIANCE WITH THE MINIMAL 
BUDGETARY DISCIPLINE REQUIREMENTS IT HAD AGREED WITH CHAD 
IN JULY 2008. 
 
¶2.  (SBU)  KARANGWA SAID THAT CHAD'S GENERALLY OPAQUE 
"EXTRAORDINARY SECURITY EXPENDITURES" ACCOUNT, WHICH THE 
GOC ESTIMATED LAST JULY AT FCFA 90 BILLION FOR THE 
AUGUST-DEC 2008 TIME PERIOD, IN FACT WILL BE NEARLY DOUBLE 
THAT SUM.  THIS WOULD MAKE IT IMPOSSIBLE FOR THE "STAFF 
MONITORED PROGRAM" TO CONTINUE.  THE IMF HOPES TO OVERSEE 
CHAD'S PERFORMANCE FOR THE REMAINDER OF 2008 AND WORK WITH 
CHAD ON ITS 2009 BUDGET, IN THE HOPE THAT CHADIAN 
PERFORMANCE CAN IMPROVE ENOUGH TO MERIT A MORE NORMAL 
RELATIONSHIP WITH THE FUND STARTING IN 2009. 
 
¶3.  (SBU)  KARANGWA STRESSED THAT THE IMF HAS TRIED VERY 
HARD TO REESTABLISH A NORMAL WORKING RELATIONSHIP WITH THE 
GOC, BUT THAT CHAD'S PERFORMANCE HAS BEEN AS DISMAL IN 2008 
AS BEFORE.  THE "EXTRAORDINARY SECURITY EXPENDITURES" HAVE 
BEEN THE MAIN VILLAIN, BUT CHAD CONTINUES MORE GENERALLY TO 
RESORT TO "EXTRA-BUDGETARY SPENDING" ON DUBIOUS, 
ILL-PREPARED AND ILL-COORDINATED PROJECTS; DECISION-MAKING 
ON SPENDING HAS OFTEN BEEN SHORT-CIRCUITED BY PRESIDENTIAL 
FIAT; "DIRECT CONTRACTING" HAS RESULTED IN ABUSES OF ALL 
SORTS; AND THE INFRASTRUCTURE MINISTRY WIELDS TOO MUCH 
AUTHORITY OVER AREAS IN WHICH IT LACKS EXPERTISE AND 
OVERSIGHT. KARANGWA SAID THAT THE IMF WOULD MAKE ANOTHER 
EFFORT TO REESTABLISH A GOOD WORKING RELATIONSHIP WITH 
CHAD, BUT THAT SOME CONCRETE PROGRESS ON THE CHADIAN SIDE 
WOULD BE ESSENTIAL FOR SUCCESS IN THIS ENDEAVOR. 
 
¶4.  (SBU) KARANGWA SAID THAT THE IMF MADE NO JUDGMENTS ON 
WHAT KIND OF MILITARY SPENDING WAS APPROPRIATE FOR CHAD OR 
EVEN HOW MUCH FUTURE GOC MILITARY SPENDING SHOULD BE.  BUT 
FUTURE MILITARY PURCHASES, SUCH AS THAT OF STRATEGIC AIR 
PURCHASES LIKE THE U.S. C-130JS, SHOULD BE PART OF THE 
GOC'S BUDGET PLANNING AND SUBJECT TO BUDGET DISCIPLINE. 
 
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COMMENT 
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¶5.  (SBU)  THE IMF HAS BEEN A VERY GOOD FRIEND TO CHAD, 
DEMONSTRATING REAL UNDERSTANDING REGARDING CHAD'S CRITICAL 
CURRENT SITUATION AND TROUBLED HISTORY, THE MILITARY 
THREATS IT FACES, AND THE NEED FOR EXTRAORDINARY SPENDING 
ON SECURITY AND DEFENSE.  BUT WE WONDER IF THE FUND CAN 
CONTINUE TO EXPEND EFFORTS AND RESOURCES ON CHAD ABSENT A 
SERIOUS AND SUSTAINED GOC COMMITMENT TO IMPROVING ITS 
BUDGETARY PERFORMANCE. 
NIGRO