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July 25, 2006—The World Bank and the Government of Chad have reached an agreement on use of oil revenues that expands the pool of funds available for programs benefiting the country’s poor people.
Wolfowitz made the announcement in Chad after holding talks with the country’s President, Idriss Deby, on a half-day stopover during his Africa trip.
The meeting came the week after representatives from the Bank and the Government of Chad signed a memorandum of understanding, under which the government committed 70 percent of its budget spending to priority poverty reduction programs, as well as a commitment that surplus funds will be set aside in a stabilization fund for the future.
“Part of the purpose of my visit here today was also to make it clear that we believe that there are very important additional steps that need to be taken to implement this agreement,“ Wolfowitz said.
World Bank President Wolfowitz in a group photo with members of Chad's civil society groups in front of the World Bank Office in N'Djamena.
“I think we have found a way to meet our common poverty-reduction interests. The key now is to ensure they are upheld and implemented. Certainly we will continue from our side to ensure that the commitments that have been made are respected,” he added.
During his stopover, Wolfowitz met members of non-government organizations in Chad, later saying they will be important in helping ensure the agreement really benefits the country’s poor.
“The most important assurance that this arrangement will work for the benefit of the people of Chad will be the active engagement of civil society and the Collège in the development of the poverty reduction strategy program.”
Under the agreement, reached after a dispute over the use of oil revenues, the Chad authorities have pledged to work with the Bank and others to prepare a poverty reduction strategy program for the country. The strategy is likely to take around 12 months and, when complete, will be implemented in law.
While welcoming Chad’s adoption of a revised budget law in line with the agreement, Wolfowitz also cautioned that the deal would only work if the Collège de Controle et Surveillance des Ressources Pétrolières, an independent body charged with oversight of the use of oil revenues for poverty reduction was strengthened, in line with last week’s memorandum of understanding.
To enhance transparency and accountability, the Bank and the Chad authorities agreed to strengthen the Collège by ensuring it has the resources to more effectively perform its duties.
Members of the Collège during the meeting with Mr. Wolfowitz.
The President also met with the Bank's Chad office staff, who have persevered in a difficult work and security environment. Wolfowitz thanked them for their diligence and commitment, and learned from them that he was the first World Bank President to visit Chad.
Wolfowitz said the Bank was committed to providing some of the infrastructure support the Collège needed.
“A country with the problems that Chad has, both on the poverty side and on the security side, is going to struggle for some period of time and one has to be realistic about it,” he said. “But I think we have a framework here where we can be partners in that struggle and where civil society can increasingly become an active partner as well.”
“I want to be realistic, but I’m also hopeful that that will, over the course of time, produce a much better result here.”
The agreement also allows for the setting up of a fund for surplus oil revenues to provide for long term growth and opportunity.
“I think this agreement is based on more than just trust. It’s based on common interest. It’s based on recognition that the Government of Chad does have some short term budgetary constraints, and they’ve got a little extra flexibility with this agreement. But it’s also based on a commitment of a much larger government resources to poverty reduction programs. “
Wolfowitz said Chad could further help reduce poverty in the country by resolving current conflicts through dialogue rather than force.
“I would say in a general sense the big challenge for this country will be to establish a national dialogue and reconciliation, to resolve the conflicts in this country, through dialogue rather than through force, which will contribute greatly to reducing poverty and improving development. “
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