US embassy cable - 05NDJAMENA306

UNCLAS  NDJAMENA 000306 
 
SIPDIS 
 
 
DEPARTMENT FOR AF/C AND AF/EPS FOR FLEMING; USUN FOR 
TAMLYN; LONDON AND PARIS FOR AFRICAWATCHERS 
 
E.O. 12958: N/A 
TAGS: ETRD, PGOV, PHUM, CD, Economic Trends 
SUBJECT: 2005 AGOA REPORT FOR CHAD 
 
REF: STATE 24616 
 
 1.  Summary: Post submits the following for the 2005 AGOA 
Report to the President.  End Summary. 
 
2.  Status: AGOA Eligible. 
 
3. AGOA Trade and Investment: In 2004, Chad,s GDP was $4.6 
billion and per capita income was $536.  Petroleum now 
dominates Chadian exports to the United States.  The Chadian 
Government is in the final stage of signing an agreement for 
a textile visa to allow Chad to qualify for third country 
fabric preferences for Chadian textiles to the United States. 
 
 
4.  Market Economy/Economic Reform/Elimination of Barriers to 
U.S. Trade: The government has privatized state-owned 
enterprises in the sugar and insurance sectors.  In 2004, the 
Government developed plans to privatize cotton, 
telecommunications, and energy parastatals.  No parastatals 
were privatized in 2004.  A new investment code to encourage 
and support foreign investment in Chad is being drafted. 
Chad has no price controls or currency restrictions.  The 
government is implementing a civil service reform strategy 
aimed at enhancing personnel management.  In 2004, a 
computerized system for revenue expenditures was put in 
place.  The Chad-Cameroon Pipeline and other petroleum 
development is enhancing Chad,s capacity for trade and 
attracting increasing foreign interest.  The bulk of American 
investment remains tied to the oil sector, but there is 
growing interest in construction, technology, and service 
sectors. 
 
5.  Pluralism/Rule of Law/Anti-Corruption:  Chad,s 
democratic institutions remain weak.  Irregularities marred 
past elections.  The ruling party dominates the National 
Assembly.  A public referendum to remove presidential term 
limits will be held in 2005.  Long-delayed municipal 
elections had still not been held in 2004.  Numerous 
political opposition parties and human rights groups operate 
in Chad. Rule of law also remains weak and the judiciary is 
vulnerable to executive branch interference.  However, the 
Government is taking some steps to increase the capacity of 
the judiciary.  In December 2004, magistrates were named to 
the newly created commercial court to handle investment 
disputes.  A judicial oversight body has removed and fined 
judges for corrupt activities.   Corruption continues to 
hinder economic growth.  In July 2004, the President created 
a new ministry and minister responsible for monitoring and 
curbing corruption.  The Ministry of Finance also began 
cracking down on corruption, primarily in the customs 
service. 
 
6.  Poverty Reduction: IMF approval of Chad,s Poverty 
Reduction and Growth Facility Program (PRGF) was delayed in 
late 2004 while the Government met several conditions.  The 
program was approved in early 2005.  The World Bank Boards 
approved an interim PRSP in July 2000. The final PRSP has not 
yet been approved.  Data collection on poverty is difficult 
to collect given the lack of infrastructure.  The 2005 budget 
provides for the use of oil revenues in the priority 
development sectors of education, health care, 
infrastructure, and rural development, with an emphasis on 
poverty reduction.  The first oil revenues were repatriated 
to Chad from a London escrow account in June 2004 and an 
oversight body comprised of government and non-government 
representatives began reviewing project proposals for the 
expenditure of the oil revenues in the priority sectors. 
 
7.  Human Rights/Labor/Child Labor: Chad,s human rights 
record remained poor.  Security forces continued to commit 
serious human rights abuses. Arbitrary and prolonged 
detentions still occur.  These abuses were not routine or 
sanctioned by the government. Nonetheless, the government 
rarely prosecutes members of the security forces. The 
government at times limited freedom of the press and 
assembly.  Several incidents of press harassment occurred in 
2004, but the independent press and radio is free to 
criticize the government.  Child labor, largely poverty 
driven, remains a problem in Chad,s informal sector.  There 
are reports that some children are trafficked into situations 
of forced labor.  The Government, however, is involved in 
efforts to raise public awareness of the problem, assist 
 
children found in these situations, and punish offenders. 
Several Government ministries, including Labor, Education, 
Justice, Social Action and the Family, and Public Security in 
collaboration with UNICEF are taking steps to combat the 
worst forms of child labor.  Organized labor is recognized 
and active and numerous unions went on strike during 2004, 
most notably teachers.  The Government ratified ILO 29, 105, 
and  ILO 182. 
 
8.  Outreach:  In Chad, the U.S. Embassy in N,Djamena and 
USAID worked with the Chadian Chamber of Commerce to organize 
a well-attended public information seminar on AGOA in April 
2004.  The Embassy also established an AGOA resource center 
that provides information to the general public on 
AGOA-eligible products and the requirements for export to the 
United States.  In October 2004, the Embassy,s commercial 
section hosted one-day seminars in two cities on &Doing 
Business with the United States8 for Chadian businessmen and 
women. Also, post assisted AGOA committee and the Ministry of 
Commerce in drafting visa arrangement between Chad and the 
United States to allow Chadian textiles and apparel articles 
to claim third country fabric preferences under section 112 
of title I of the & Trade and development act of 20008 as 
amended by section 3108 of the & Trade act of 20028. 
 
WALL 
 
 
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