Sat, Feb 19, 2005 - Page 6 News List

Innovative oil program in Chad insufficient: report

NAIROBI , KENYA

A year after Chad joined the ranks of African oil exporters, development groups question whether a government weakened by corruption and instability has the will and the ability to use its new wealth to combat poverty.

"The record of Chad's first year as a petro-state provides many reasons for concern," the Maryland-based relief and development group Catholic Relief Services and the Washington-based World Bank watchdog the Bank Information Center said in a report released Thursday titled Chad's Oil: Miracle or Mirage?

The two groups noted that Chad has been touted as a model because a World Bank loan that enabled it to start exporting oil required it to pledge to devote oil earnings to anti-poverty programs in a country where 80 percent of the 9.5 million citizens survive on subsistence farming. As part of the World Bank agreement, the first of its kind, Chad also set up a monitoring body comprising representatives from government and civil society and charged with ensuring oil revenues were properly used.

Those steps reflected an acknowledgment that elsewhere in Africa, adding oil to repressive, corrupt and poor countries resulted in more repression and corruption -- and not necessarily any alleviation of poverty.

The remedy the World Bank proposed for Chad was innovative, but incomplete, Thursday's report said.

For example, regulations on oversight of oil activities and revenues do not apply to developments outside the first three fields in southern Chad, operated by a U.S.-Malaysia consortium of ExxonMobil, ChevronTexaco and Petronas, according to the study.

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