DANGLING CHAD:

The Making of an African Petrostate (SOMINI SENGUPTA, 2/18/04, NY Times)

Oil is bringing big changes to Chad, some cultural, like the one Mr. Elie worries about, others practical, like the way the World Bank will be overseeing how Chad manages its new wealth. Chad, among the poorest countries in the world, is now Africa's newest petrostate.

Its $3.7 billion underground pipeline, stretching 670 miles, began ferrying crude oil through neighboring Cameroon to the Atlantic coast last year. The pipeline is the largest single private investment in Africa.

Because the pipeline stands to transform this landlocked country, for better or worse, Chad is under a special glare — from the oil industry, global lending institutions and development groups.

The investment has come with strings attached: the oil revenues are to be transparent, and the government is to use the wealth to better the miserable lives of its nine million citizens. A citizens' committee is to review all spending to see that it conforms to the law.

If the rules work as intended, they could set a new model for how oil business is done in Africa. But if the usual corruption sets in, if democratic reforms are postponed, it will be just one more case of the spectacular misery that has befallen Africa's oil states, like Sudan, where oil greased the engines of war, or neighboring Nigeria, where living standards plummeted since oil production began 40 years ago. [...]

This year, Chad will see its first share of oil royalties, about $100 million, an amount that will enlarge the government treasury by about 40 percent, virtually overnight. While this allotment will be closely watched, another $100 million from taxes and customs duties is entirely at the government's discretion.

Certainly, there is no dearth of need. Electricity and water are beyond the reach of a majority of people here, and the average Chadian can expect to die before his 45th birthday. The per capita income barely exceeds $220 a year. Chad ranks 165th of 173 countries on the United Nations Human Development Index.

Critics say it is foolhardy to expect a leadership dominated by one ethnic group (the president's) and with a record of repression and mismanagement to do anything but use its new wealth to crush opponents.

They point to worrisome signs: the banning of an antipipeline protest, the temporary closure of an irreverent radio station, the execution of criminals after what critics believe to be incomplete trials.

The most recent sign of trouble was a suggestion by supporters of Mr. Deby, a military ruler twice elected president, to amend the Constitution to allow him to run for a third term. "For those who lead us, the law is just a piece of paper," said Dobian Assingar, head of the Chadian League of Human Rights and a member of the oversight committee.

The government, for its part, points out that no country has ever opened its revenues to such scrutiny. "I can only say: `Wait. Wait until the revenues are spent,' " said Tom Erdimi, the state's liaison to the project.

No matter how the money is spent this year, Chad is certain to have more in its future. ExxonMobil has already found more oil, and a Canadian company, Encana, is busy exploring north of here.

Another secure oil source...

Posted by Orrin Judd at February 27, 2004 5:38 PM