World Bank Ends Effort to Help Chad Ease Poverty - NYTimes.com
http://www.nytimes.com/2008/09/11/world/africa/11chad.html?_r=1&o...
September 11, 2008
World Bank Ends Effort to Help Chad Ease Poverty By LYDIA POLGREEN
DAKAR, Senegal — When the World Bank agreed in 2000 to help finance a $4.2 billion pipeline to tap the undeveloped oil wealth of Chad, one of the world’s poorest and most unstable nations, the agreement was a novel response to a persistent African quandary: how to make the continent’s rich natural resources pay off for its people, not only for its powerful. The strategy was to use the World Bank’s money and credibility to persuade Chad to dedicate its earnings from oil to attacking its poverty by building schools, roads and hospitals. That experiment ended quietly this week. Chad repaid the $65.7 million it owed the World Bank out of national coffers swollen by more than $1 billion a year in oil revenues, but it had not honored its bargain, the bank said. “Chad failed to comply with the key requirements of this agreement,” the World Bank said in a statement on Tuesday. “The government did not allocate adequate resources critical for poverty reduction.” Thus concluded one of the most ambitious efforts to escape Africa’s “resource curse,” wherein the wealth of mineral-rich nations gets siphoned by corrupt officials. Under the plan, the World Bank helped finance a 665-mile pipeline for an oil consortium led by Exxon Mobil, linking oil fields in southern Chad with Atlantic Ocean terminals in Cameroon. In exchange, the government of Chad agreed to channel most of its royalties into fighting poverty. An independent oversight board was to approve or deny spending projects based on their prospects for reducing poverty. But it never really worked that way. In May 2005 the board, in a damning investigation, found that much of the money was being wasted on abuses like shoddy school desks made of buckled wood, computers and printers purchased at inflated prices, and wells, schools and hospitals that were paid for but not completed. Life has gone from bad to worse for most people in this landlocked country. According to Unicef, child mortality rose from 1990 to 2006. Only one adult in four is literate, and 37 percent of children are underweight. Civic groups and opposition political parties had opposed the pipeline, saying Chad was too corrupt and poorly governed to manage the gusher of oil money. “We knew from the very beginning how this would end,” said Antoine Berilengar, a Roman Catholic priest and anticorruption activist in Chad who served on the oversight panel. “Chad is a corrupt country with no real democracy. The government has simply enriched itself.” Ian Gary, an Oxfam America specialist in managing mineral resources, said it was no surprise that the experiment had failed. “The World Bank made a gamble,” he said. “It knew the situation in Chad going in, but it argued it could build the capacity of the Chadian government and the governance situation would improve alongside the oil
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World Bank Ends Effort to Help Chad Ease Poverty - NYTimes.com
http://www.nytimes.com/2008/09/11/world/africa/11chad.html?_r=1&o...
boom. But what we have seen in Chad and in so many other places, it is that boom and that flow of revenue that undermines governance rather than improving it.” Chad’s government repeatedly tried to change the World Bank arrangement. It argued that the threats it faced from a rebellion and from the humanitarian crisis that spilled over from the neighboring Darfur region of Sudan required it to spend oil money on security. In 2006 a compromise was reached that gave the government a freer hand, but the terms were never fully respected. The World Bank agreement was conceived in the late 1990s, when oil sold for about $20 a barrel, making the prospect of building a 665-mile pipeline through deepest Africa a money-losing proposition. That has all changed — Chad produces 170,000 barrels a day and expects to collect $1.4 billion in oil revenues this year. Michel Wormser, the bank’s director of operations for Africa, said by telephone that the World Bank would continue to help Chad invest its oil windfall in fighting poverty. But he said the demise of the pipeline deal showed that a nation’s mineral resources could benefit its people only if “the government is truly committed to sharing these resources in an inclusive manner.”
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