The African country of Chad has a $4.2-billion oil pipeline that runs 665 miles to the nearest seaport. The pipeline has generated $399 million for Chad since mid-2004, according to a report in the New York Times.
Under the terms of a World Bank loan that provided the financing for the pipeline, Chad’s government was supposed to use the money to help its poorest residents. But Chad’s poor have taken a backseat to the needs of the country’s ruling elite.
The Times article details how the spending of the money has been marred by mismanagement and graft and, more recently, the government’s decision to divert the funds to fight a rebellion.
A consortium led by Exxon Mobil built the pipeline only after the World Bank agreed to the loan. Chad, considered one of the most corrupt countries in the world, had to agree to the World Bank’s conditions before the giant oil conglomerate would tackle the project.
The World Bank’s hope was that it could force Chad officials to provide basic services like schools, roads and clean water. Instead, the Times articles notes, schools have not been built, contracts for local water towers have not been fulfilled and money for roads has gone into the pockets of the Chad president’s brother.
“It’s not clear how to get your hands around it,” World Bank President Paul Wolfowitz says. “But I think to stand back and say the whole thing is a dirty business, and we in the World Bank don’t want to have anything to do with it is very shortsighted.”
After Chad’s government decided to allow the oil revenues to be used to fight the rebellion in the eastern part of the country, the World Bank suspended all its loans to the country.
What does this have to do with U.S. agriculture? Chad is one of the C-4 group of countries that have become the poster children for Oxfam International and other non-governmental organizations trying to scuttle the U.S. cotton program. (The others: Benin, Burkina Faso and Mali.)
During the WTO’s Hong Kong ministerial conference, the European Union used the plight of the C-4 countries to deflect attention from the EU’s internal differences over the Doha Development Round.
WTO agreed to a draft declaration that called for accelerated treatment of the U.S. cotton program, an action U.S. government and National Cotton Council leaders have said was contrary to the “single undertaking for agriculture” rule contained in the Doha Round’s July 2004 Framework Agreement.
U.S. cotton industry leaders have said it’s not the U.S. cotton program that is causing the impoverishment of Chad and Mali’s and Benin’s and Burkina Faso’s farmers but the actions of their own governments which supply inputs and market their cotton.
They’ve asked what happens to the 18-cent-per pound difference between the prices the farmers and the government receive for selling their cotton. Maybe we’ll see a New York Times article about Chad’s cotton riches being diverted…