The government of Chad said on Saturday it has taken note of the decision by the World Bank to suspend loan payments, but called for reconsideration and said it is ready to continue talks.
The bank has suspended payments to Chad in response to the African country’s modification of a bank-mandated law governing the use of its oil wealth, its president, Paul Wolfowitz, announced on Friday.
Wolfowitz said the suspension affected about $124-million in loans approved by the World Bank but not yet released.
”The government takes note of this decision, which effectively concerns virtually all World Bank-financed projects in Chad,” Planning and Economy Minister Mahamat Ali Hassan told reporters.
”The government hopes that the bank will reconsider its position and go back on this decision, which is of a type to remove credibility from its activities and this damage its reputation,” he said.
”In any event, the government repeats its readiness to continue a dialogue with the bank and will take all the necessary steps with a view to resolving the problem that could arise from a possible extension of its announced decision.”
He said the government was surprised by the ”brutality” of the bank’s action, ”which the consultations in course in no way foreshadowed”.
”It compels [us] to wonder about the motives that determine the bank’s interventions through so-called development projects, aimed at the poorest people, when their funding can be suspended for a reason the validity of which in any case Chad does not acknowledge,” Ali Hassan said.
Wolfowitz said on Friday that ”we try to explain to them that they have signed an agreement with the World Bank on the basis of [the bank-mandated] law and if you want to exercise your sovereign rights to change the law, that compels the bank to change its policies and decisions.”
The new legislation pushed through Chad’s Parliament, which is dominated by President Idriss Deby’s party, scraps a fund reserving 10% of oil revenue for future generations.
It also doubles the income earmarked for the state with no external checks, adds the judiciary and the security forces to priority sectors identified by the bank such as health and education enjoying the lion’s share, and changes the make-up of the independent committee that monitors investments.
Chad is unable to pay its civil servants on time and faces growing popular discontent. The government says that a change in the law will help it settle ”these problems of salaries, insecurity and government operations”.
The country, landlocked and desperately poor, has been producing oil since October 2003, routing it to a Cameroonian port through a pipeline. — Sapa-AFP