Aw hell.
Yeah so I have an exam tomorrow. But someone just sent me this and it SUCKS. Royally. Read it and weep. But, perhaps plays right into my thesis argument? We shall see. Anyway, after you're done not really caring much about this, check out the penguins exercising at my new favorite website, www.happynews.com.
The New York Times
December 13, 2005
Chad Backs Out of Pledge to Use Oil Wealth to Reduce Poverty
By LYDIA POLGREEN
ACCRA, Ghana, Dec. 12 - When the World Bank said more than five years
ago that it would help Chad build a $4.2 billion pipeline to export
the oil discovered in the southern part of that landlocked, deeply
impoverished nation, it seemed an opportunity to give the lie to the
resource curse that is the painful experience of virtually every
oil-rich African nation: that oil wealth typically creates more
problems for poor countries than it solves.
In exchange for World Bank loans to build a 670-mile underground
pipeline through Cameroon to export its oil, the Chadian government
passed a law requiring that almost all of the money it earns on oil
exports be spent for poverty reduction and that 10 percent be put
aside as a "future generations fund," to leave something behind once
the estimated one billion barrels of oil have been exhausted.
But in October, Chad's government abruptly announced at a meeting with
the World Bank in N'Djamena, the capital, that it plans to alter that
law and funnel more money into its general budget and increase
spending on security.
Under the new proposal, the future generations fund would be scrapped
and military spending would be added to the list of "priority sectors"
that until now focused on spending in areas like agriculture, housing,
health care and education.
"These are fundamental changes to the agreement Chad made on oil
revenue management," said Ian Gary, an expert on oil at Oxfam America
who has written several research reports critical of the Chad oil
industry.
The changes, he said, make it far less likely the people of Chad will
see any benefit from the billions of dollars Chad's oil fields are
likely to pump into the economy, which in turn undermines the
antipoverty rationale of the World Bank's role in the project.
The World Bank acknowledges that the Chadian government faces serious
financial problems, and needs the money to pay salaries for civil
servants and to deal with security threats, and has offered technical
assistance to help bring spending under control.
"The adopted bill redefines the priority areas, abolishes the future
generations fund, alters the way in which funds are allocated and
extends the law to apply to new oilfields," Hourmadji Moussa Doumgor,
a government spokesman, told Reuters.
Paul Wolfowitz, president of the World Bank, released a statement
expressing "serious concerns" about the changes.
"In the World Bank's view, these modifications alone will fail to
provide a lasting solution to the recurring financial problems that
Chad faces," the statement said. "To the contrary, they threaten to
undermine the objectives of socioeconomic development, poverty
reduction, accountability and transparency that guided World Bank
Group and other international support for the Chad-Cameroon pipeline
project."
World Bank officials have been in constant negotiations with the
Chadian government over the proposed law, which is now before the
legislature. Approval is largely a formality because the legislature
is controlled by the party of Idriss Déby, who seized power after a
civil war in 1990 and was elected president in 1996.
Under the current law, all payments made by ExxonMobil and its
partners, which run the oil operation, go into an escrow account at
Citibank in London, while taxes on oil profits and other indirect
revenue go directly into the state treasury.
Of the money that goes to the escrow account, 10 percent is set aside
for Chad's post-oil future, 72 percent goes to poverty reduction
project and the remainder is split between the federal government and
the local authorities where oil is extracted.
A committee that includes government officials and civil society
representatives must approve projects paid for with money from direct
oil sales. In addition to scrapping the future fund, the new law would
double the percentage of money the federal government can spend
without oversight to 30 percent.
The proposed changes have drawn angry reactions from civic groups in
Chad, many of which were skeptical about the pipeline deal to begin
with and warned the World Bank that the government would pull out once
the oil money started flowing.
"It was at the very beginning clear that the government has adopted
that law only to get the World Bank approved oil project," said
Delphine Djiraibe of the Chadian Association for the Promotion and
Defense of Human Rights, one of the groups that fought the pipeline
deal. "Now that everything is finished and money is coming in, the
government is doing whatever they want regardless of the agreement
they have signed with World Bank or commitments they have made to use
oil money to fight poverty."
Chad, one of Africa's poorest countries, has a long history of
instability and bloodshed. A vast, arid land about three times the
size of California, it is home to 10 million people.
A majority of its citizens rely on subsistence agriculture and animal
herding. It ranks 167 of 177 nations on the United Nations Development
Index. Transparency International's 2005 survey of corruption around
the world gave it the worst score, an ignominy it shares with
Bangladesh.
Since gaining independence from France in 1960, it has been tormented
by civil wars fueled by ethnic and religious tensions. Like Sudan, its
restive neighbor to the east, its northern population is largely
Muslim and has dominated the country's politics, while its southern
half is largely Christian and animist.
Mr. Déby's rule has been a relatively stable period in the country's
history, but the troubles in the Darfur region of Sudan, which borders
eastern Chad, have spilled over into Chad along with 300,000 refugees.
Internal divisions, along with reports of Mr. Déby's failing health,
have led to much speculation that the government is on shaky ground.
"All of this is taking place against a backdrop of increasing
fragility of the Déby regime," Mr. Gary said.
The push to spend more on security has occurred as the Chadian
military has been afflicted by defections and low morale.
A group of soldiers who defected have started a rebel movement on the
eastern edge of the country, and Mr. Déby overhauled the republican
guard responsible for his safety in October. Last month, he also
shuffled the military leadership.
Since it began exporting oil in 2003, Chad has taken in about $300
million, and under the petroleum revenue management law, two-thirds
has gone to things like education, water systems, health care and
basic infrastructure and transportation.
About $30 million has gone into the future generations fund, while 5
percent of the money has gone back to the oil-producing regions for
development.
The New York Times
December 13, 2005
Chad Backs Out of Pledge to Use Oil Wealth to Reduce Poverty
By LYDIA POLGREEN
ACCRA, Ghana, Dec. 12 - When the World Bank said more than five years
ago that it would help Chad build a $4.2 billion pipeline to export
the oil discovered in the southern part of that landlocked, deeply
impoverished nation, it seemed an opportunity to give the lie to the
resource curse that is the painful experience of virtually every
oil-rich African nation: that oil wealth typically creates more
problems for poor countries than it solves.
In exchange for World Bank loans to build a 670-mile underground
pipeline through Cameroon to export its oil, the Chadian government
passed a law requiring that almost all of the money it earns on oil
exports be spent for poverty reduction and that 10 percent be put
aside as a "future generations fund," to leave something behind once
the estimated one billion barrels of oil have been exhausted.
But in October, Chad's government abruptly announced at a meeting with
the World Bank in N'Djamena, the capital, that it plans to alter that
law and funnel more money into its general budget and increase
spending on security.
Under the new proposal, the future generations fund would be scrapped
and military spending would be added to the list of "priority sectors"
that until now focused on spending in areas like agriculture, housing,
health care and education.
"These are fundamental changes to the agreement Chad made on oil
revenue management," said Ian Gary, an expert on oil at Oxfam America
who has written several research reports critical of the Chad oil
industry.
The changes, he said, make it far less likely the people of Chad will
see any benefit from the billions of dollars Chad's oil fields are
likely to pump into the economy, which in turn undermines the
antipoverty rationale of the World Bank's role in the project.
The World Bank acknowledges that the Chadian government faces serious
financial problems, and needs the money to pay salaries for civil
servants and to deal with security threats, and has offered technical
assistance to help bring spending under control.
"The adopted bill redefines the priority areas, abolishes the future
generations fund, alters the way in which funds are allocated and
extends the law to apply to new oilfields," Hourmadji Moussa Doumgor,
a government spokesman, told Reuters.
Paul Wolfowitz, president of the World Bank, released a statement
expressing "serious concerns" about the changes.
"In the World Bank's view, these modifications alone will fail to
provide a lasting solution to the recurring financial problems that
Chad faces," the statement said. "To the contrary, they threaten to
undermine the objectives of socioeconomic development, poverty
reduction, accountability and transparency that guided World Bank
Group and other international support for the Chad-Cameroon pipeline
project."
World Bank officials have been in constant negotiations with the
Chadian government over the proposed law, which is now before the
legislature. Approval is largely a formality because the legislature
is controlled by the party of Idriss Déby, who seized power after a
civil war in 1990 and was elected president in 1996.
Under the current law, all payments made by ExxonMobil and its
partners, which run the oil operation, go into an escrow account at
Citibank in London, while taxes on oil profits and other indirect
revenue go directly into the state treasury.
Of the money that goes to the escrow account, 10 percent is set aside
for Chad's post-oil future, 72 percent goes to poverty reduction
project and the remainder is split between the federal government and
the local authorities where oil is extracted.
A committee that includes government officials and civil society
representatives must approve projects paid for with money from direct
oil sales. In addition to scrapping the future fund, the new law would
double the percentage of money the federal government can spend
without oversight to 30 percent.
The proposed changes have drawn angry reactions from civic groups in
Chad, many of which were skeptical about the pipeline deal to begin
with and warned the World Bank that the government would pull out once
the oil money started flowing.
"It was at the very beginning clear that the government has adopted
that law only to get the World Bank approved oil project," said
Delphine Djiraibe of the Chadian Association for the Promotion and
Defense of Human Rights, one of the groups that fought the pipeline
deal. "Now that everything is finished and money is coming in, the
government is doing whatever they want regardless of the agreement
they have signed with World Bank or commitments they have made to use
oil money to fight poverty."
Chad, one of Africa's poorest countries, has a long history of
instability and bloodshed. A vast, arid land about three times the
size of California, it is home to 10 million people.
A majority of its citizens rely on subsistence agriculture and animal
herding. It ranks 167 of 177 nations on the United Nations Development
Index. Transparency International's 2005 survey of corruption around
the world gave it the worst score, an ignominy it shares with
Bangladesh.
Since gaining independence from France in 1960, it has been tormented
by civil wars fueled by ethnic and religious tensions. Like Sudan, its
restive neighbor to the east, its northern population is largely
Muslim and has dominated the country's politics, while its southern
half is largely Christian and animist.
Mr. Déby's rule has been a relatively stable period in the country's
history, but the troubles in the Darfur region of Sudan, which borders
eastern Chad, have spilled over into Chad along with 300,000 refugees.
Internal divisions, along with reports of Mr. Déby's failing health,
have led to much speculation that the government is on shaky ground.
"All of this is taking place against a backdrop of increasing
fragility of the Déby regime," Mr. Gary said.
The push to spend more on security has occurred as the Chadian
military has been afflicted by defections and low morale.
A group of soldiers who defected have started a rebel movement on the
eastern edge of the country, and Mr. Déby overhauled the republican
guard responsible for his safety in October. Last month, he also
shuffled the military leadership.
Since it began exporting oil in 2003, Chad has taken in about $300
million, and under the petroleum revenue management law, two-thirds
has gone to things like education, water systems, health care and
basic infrastructure and transportation.
About $30 million has gone into the future generations fund, while 5
percent of the money has gone back to the oil-producing regions for
development.