[mgj-discuss] FW: World Bank: Anti-what? in Chad (fwd)

[basav at igc.org]

Reminds me a great deal about the Narmada Valley in India, where the Bank
(conveniently) withdrew when the project was well underway, and it was
clear that the Government of India was going to continue with it. 

The case for reparations grows stronger and stronger!
-B

---------- Forwarded message ----------
Date: Fri, 28 Apr 2006 08:30:02 -0700
From: 50 Years Is Enough Network <list at 50years.org>
To: 50 Years Email List <stop-wb-imf at 50years.org>
Subject: (50 Years) World Bank: Anti-what? in Chad

As many of you know, the World Bank has resumed its
participation in the Chad Cameroon oil pipeline. The Bank
had pulled out six weeks ago, when the government had
declared it would use a percentage of the money earned
from oil revenues for military purposes (the project
agreement says that the money must go to "poverty
reduction"). Under U.S. pressure, the Bank has gone back
in and agreed to the government of Chad's demand to use
some (30%) of the revenue for whatever the government
wants.

So what are the lessons civil society should learn from
this? It's hard to say. The social and ecological
devastation the project has caused, along with the
corruption that is coming to light through what is
essentially a renegotiation of the contract were all
predicted by civil society as they opposed the project.
The Bank making a show of pulling out was less
predictable, but somewhat meaningless: the project was
built and would find a way to continue with or without the
Bank.

As it turned out, the Bank did have to come in again to
save the project, which it did when the U.S. told them to
because Chad was threatening to halt oil production, which
may have further driven up already skyrocketing oil
prices. Maybe one lesson for us is not to take Wolfowitz's
anti-corruption talk too seriously: when the U.S. says
jump, the bank will ask "how high?" not "are we jumping
into more corruption?".

-Sameer.

***
http://www.alertnet.org/thenews/newsdesk/IRIN/4f20788d9f6c204340999a84bfb59f
07.htm

CHAD: World Bank reallocates oil revenue from development
to government

27 Apr 2006 17:41:47 GMT
Source: IRIN

NDJAMENA, 27 April (IRIN) - The World Bank is close to
ending a six month spat by agreeing a compromise deal that
would allow President Idriss Deby to access more of the
country's oil revenues, sparking fears that the cash will
be spent on guns and not development projects as initially
intended.

Under the new deal the government of Chad, which this
month fought off a rebel attack on the capital N'djamena,
would be able to access 30 percent of oil revenues,
compared to the previous limit of 10 percent, on condition
that the remaining 70 percent go on "priority poverty
programmes".

And the so-called "future generations fund" ? a special
account to guard 10 percent of oil income for future
development projects ? appears to have been scrapped by
the World Bank, too.

Last year the World Bank froze an escrow account holding
more than US $100 million of Chadian petrodollars and
suspended $124 million in loans to the cash-strapped
country after parliament voted to abolish the future
generations fund, a key component to initially securing
World Bank backing for development of Chad's burgeoning
oil sector.

The change of tack by the World Bank follows a threat from
the Chadian government to stop pumping oil at the end of
this month if a deal was not reached to free up its frozen
oil accounts.

"While the Government and the Bank are yet to conclude a
comprehensive and final agreement, they have reached an
interim accord," said the World Bank in a statement issued
in Washington DC late on Wednesday.

According to the text of Wednesday's agreement, the Chad
government will make the necessary changes as part of 2006
budget legislation.

If the bill is passed and implemented the World Bank said
it will drip-feed Chad's government the more than US $100
million on deposit in three tranches over the next three
months. It has also agreed to restart lending to
development projects.

Analysts expect the money will be spent on weapons and
security to bolster Deby's government against
heavily-armed rebels and army deserters who have been
challenging his regime since 2005.

"It's really coming down to the wire for the Chadian
government now", said Jason Mosley, Africa Editor at the
British research unit Oxford Analytica.

"They needed the oil money to buy more weapons and spend
on security measures. If Deby gets parliament to pass this
budget measure and then misappropriates 30 percent of the
first tranche, that still gives him several million
dollars to spend on security equipment. Considering the
precarious situation he's in that must sound better than
nothing," added Mosley.

The World Bank said in its statement that Chad has agreed
not to spend any of the forthcoming millions on military
equipment.

"The Chadian authorities also agreed to parallel actions
to strengthen the monitoring, transparency and
accountability of not only direct but also indirect oil
revenues and development aid", the World Bank said in its
statement.

But according to Mosley its ability to enforce this is
limited.

"The Bank has already exercised its enforcement measures
which are suspending the loans and freezing the money in
their Citibank account. Once they give them the first
tranche of money, all they can do then is freeze the rest.
I'm not optimistic about this working because the
situation in Chad is so unstable," he said.

World Bank backing for the US $3.7-billion oil pipeline
that carries around 170,000 barrels of Chadian oil 1,600
km each day to waiting tankers docked in Cameroon, was
touted as a model for making African natural resources
work for the African people by providing guidelines and
restrictions on how the oil money could be spent.

But the project has been troubled from the start when Deby
spent the first US $3 million of oil proceeds on guns in
2003.

The Bank also said that Chad had committed to implement
measures to "strengthen and expand" transparency and
accountability measures, including expanding the role of
the College ? the independent body with oversight of the
allocation and use of Chad's oil revenues for poverty
alleviation projects.

A member of the College contacted by IRIN said he could
not comment on the new transparency measures because the
College had not been consulted on the new agreement or
made aware of the new transparency measures.

Chad, an arid desert country in north-central Africa, is
the fifth poorest nation in the world, according to the
UN. It has chronic development problems and has been
fractured by civil war for most of the 46 years since its
independence from France.


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