Contact: In Washington, Marco Mantovanelli (202) 458-7571 mmantovanelli@worldbank.org Damian Milverton, (202) 473-6735 dmilverton@worldbank.org WASHINGTON, December 8, 2005 - World Bank Group President Paul Wolfowitz today expressed serious concerns about a proposal from the Government of Chad that would significantly alter the Petroleum Revenue Management Law intended to maximize the benefits of Chad’s new oil wealth for its citizens. This law was a deciding factor in the World Bank Group’s original support for the Chad-Cameroon Oil Pipeline. Indeed, if properly implemented, the law could help lift millions of Chadians out of poverty through a sound management of oil revenues. “The issue is maintaining the focus of this development project on poverty reduction,” said Mr. Wolfowitz after meeting with senior Bank officials. “It’s about ensuring continued accountability and transparency in the management of Chad’s oil revenues for the benefit of its population. The law in question was the basis for a legal agreement between the Republic of Chad and the World Bank,” said Mr. Wolfowitz. The proposed changes to the Petroleum Revenue Management Law, which the government has reportedly submitted to the National Assembly, would entail fundamental changes to the current system for managing oil revenues, including abolishing the Fund for Future Generations. The proposed modifications reportedly grew out of financial pressures recently experienced by the Chadian government. The Government of Chad has stated that the proposed changes are needed to boost revenue to its budget at a time of fiscal crisis. In the World Bank’s view, these modifications alone will fail to provide a lasting solution to the recurring financial problems that Chad faces. To the contrary, they threaten to undermine the objectives of socio-economic development, poverty reduction, accountability and transparency that guided World Bank Group and other international support for the Chad-Cameroon Pipeline project. The Bank is willing to help the Government of Chad examine the cause of the financial circumstances and to help it improve fiscal management. The Bank can also assist with strengthening safeguards on the use of public finances to ensure there is a lasting solution to the fiscal crisis while preserving the integrity of the oil revenue management system for the benefit of all Chadians, including future generations. The World Bank has proposed to the Chadian Government, in consultation with other partners, to take urgent and credible measures to strengthen the safeguards in the management of the country public finances. The World Bank has offered to engage in detailed discussions with the Chadian Government to address these issues. It is expecting to hear the Government’s reactions to its proposals. - | 
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