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Cablegate: World Bank Ends Chad Visit On High Note, Pointing Toward

VZCZCXRO7511
PP RUEHGI RUEHMA RUEHROV
DE RUEHNJ #0519/01 3151334
ZNR UUUUU ZZH
P 101334Z NOV 08
FM AMEMBASSY NDJAMENA
TO RUEHC/SECSTATE WASHDC PRIORITY 6567
INFO RUCNFUR/DARFUR COLLECTIVE PRIORITY
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0503

UNCLAS SECTION 01 OF 02 NDJAMENA 000519

SIPDIS
SENSITIVE

TAGS: ECON EFIN PREL EPET IBRD UN IMF PGOV FR CD

SUBJECT: WORLD BANK ENDS CHAD VISIT ON HIGH NOTE, POINTING TOWARD
"NORMALIZATION" OF BANK-CHAD RELATIONS SOON

REF: NDJAMENA 493

NDJAMENA 00000519 001.2 OF 002


--------------
SUMMARY
--------------

1. (SBU) The World Bank delegation finished its visit to Chad on a
high note, if not the highest possible note, this week. In a
presentation to the diplomatic corps November 7 by the GOC Ministers
of Finance and Economy and the Bank delegation head, the visit was
portrayed as "positive" and "constructive," and Bank officials
stressed that the Bank was still involved in projects in Chad
outside the petroleum sector; would continue with those and consider
new ones; and all but promised that the Bank would reopen its office
in Chad with a permanent resident representative soon. The Bank's
review of Bank-funded projects, GOC performance in priority sectors,
and public finance management discovered many "areas for
improvement." But according to the Bank team both publicly (and
privately) there would be an attempt to "normalize" its relationship
with Chad in the near future. We think that the delegation will
recommend that the Bank re-open its N'Djamena office, thereby
"normalizing" relations with Chad. That would be the occasion for
the Prime Minister to plan to visit Washington, as he long has
wanted to do. We will see later this week what the IMF delegation,
which is already in town, can do on its end to bring Chad into
better synchronization with the IFIs. END SUMMARY.

2. (SBU) Ambassador and Acting POLOFF attended a presentation late
November 7 chaired by the GOC Ministers of Finance (Gatta Ngoulou)
and Economy (Ousmane Matar Breme), and the head of the World Bank's
visiting delegation, Kathryn Hollifield. The 15-person Bank
delegation has been here since October 26 to dialogue with the GOC
on all aspects of the Chad-Bank relationship (reftel). The
delegation was joined this week by the Bank's Country Director for
Central Africa, Mary Barton Dock, resident in Yaounde and former
resident representative in Chad. The meeting, called at the last
minute, was not especially well attended, but key partners besides
the United States -- UNDP, France, Germany, Switzerland -- were
represented by their chiefs of assistance programs.

3. (SBU) The Ministers and Hollifield briefed on the facts and
findings of the visit. The overall objective of the Bank's visit
was "to evaluate the progress that the GOC had made in the area of
concrete results in the priority development sectors, especially the
areas in which the Bank had invested." There were four specific
objectives: Review Bank-financed projects; evaluate progress made
in priority sectors; evaluate the GOC's management of public
spending, as well as the linkage between the budget, the second
National Strategy for Poverty Reduction (NSPR), the Medium Term
Expenditure Plan, and priority action plans of line ministries in
terms of the execution of the 2008 budget and the preparation of the
2009 budget; and review future plans for Bank-financed projects.

4. (SBU) The Bank's review found many areas for improvement. For
example, in Bank-financed projects, the review found that the
special accounts of completed projects had not been properly
reconciled between the Bank and the GOC. In Priority Sector
performance, the Bank's scrutiny of coordination between the
Infrastructure Ministry and the "line ministries" -- health and
education -- revealed very high construction costs for schools and
clinics (leading it to recommend a study of these); irregular
payment and training of teachers; and "dispersion of responsibility"
among the various ministries involved in Rural Development. Also in
Priority Sector performance, the Bank found deficiencies in the
urban development, telecommunications, and energy (electricity)
sectors. Finally, on Public Finances, the Bank's review
highlighted: The "explosion" of civil and military salaries that
now consume all the GOC's non-petroleum revenues; the massive GOC
subvention of the electric company STEE and the cotton monopoly
Cotontchad; questionable public investment practices in general; and
the fact the nearly half of GOC spending in 2008 was outside the
parameters of the state's own budget. Despite all the problems they
discovered, the Bank delegation pronounced itself satisfied with the
cooperation of GOC officials in this review and expressed confidence
in the ability and apparent willingness of the GOC on the working
level to address deficiencies.

----------------
COMMENT
----------------

5. (SBU) The Bank's public posture tracked with what Barton Dock
and Hollifield told the Ambassador privately earlier this week, as
the delegation's work was proceeding. We think that the delegation
will recommend that the Bank re-open its N'Djamena office, thereby
"normalizing" relations with Chad. We will see later this week what
the IMF delegation, which is already in town, can do on its end to
bring Chad into better synchronization with the IFIs. We believe

NDJAMENA 00000519 002.2 OF 002


that only after Chad and the Bank "normalize" relations will the
Prime Minister plan to visit Washington.

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