International Development written question – answered at on 4 May 2006.
To ask the Secretary of State for International Development what assessment his Department has made of the ongoing dispute between the World Bank and the Government of Chad regarding frozen Chadian oil royalties; what discussions he has had with members of the US Administration regarding their offer of mediation in this dispute; and if he will make a statement.
Chad is one of the poorest countries in Africa. UK development aid is provided indirectly through multilateral organisations. When oil reserves were discovered in the 1990s, the industry asked the World Bank to invest in the building of a 1,070 km pipeline to carry Chad's petroleum to the Atlantic coast for export. The World Bank saw this as a unique opportunity for Chad to climb out of extreme poverty. Before it became involved, the World Bank obtained assurances that the new revenues would be used to lift the population out of deprivation.
On
The World Bank offered to assist the Government to address their financial difficulties by analysing and helping to address them, including how public finances had been managed. It had also proposed a review of how the Petroleum Revenue Management Law had been implemented to identify which, if any, amendments to the law might be warranted. The World Bank has remained open to dialogue with the Government on the best ways to address their current financial crisis while protecting poverty reduction programmes. On
The Government of Chad have agreed to pass a 2006 budget law specifying that 70 per cent. of the oil revenues will be used for priority poverty programmes. This allocation excludes security spending, which is to be funded from general revenues. If the Bill does achieve this, as soon as the oil consortium submits payments owed, the World Bank will release one third of the total amount on deposit in the escrow account over each of the next three months, with the understanding that the World Bank and the Chad Government will work on a further, more permanent agreement during that period. The Chad authorities have also agreed to parallel actions to strengthen the monitoring, transparency and accountability of direct and indirect oil revenues and development aid.
We welcome the steps which the Government of Chad have taken to restore the confidence of the international donor community. While a final agreement is still to be reached, we welcome the Government's efforts to address the issues. We believe the steps agreed provide a way forward to ensure that the people of Chad see the benefits of the aid and oil revenue their country receives.
I have not discussed with the US Administration its offer of mediation in this dispute.
Yes1 person thinks so
No1 person thinks not
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