May 22, 2000
The Washington Post
Page A20
Copyright 2000, The Washington Post Co. All Rights Reserved
Reprinted with permission from Washingtonpost.Newsweek Interactive Company and
The Washington Post.
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NATURAL RESOURCES have often cursed developing countries: Nigeria
squandered its oil wealth; Sierra Leone, Angola and Congo have been torn apart
by armed bands intent on plundering diamonds. Now the World Bank proposes to
back an oil project in Chad, which has a history of violent conflict, weak
democratic institutions and a poor human-rights record. What chance is there
that an oil bonanza will reduce the country's poverty?
To answer that question, the bank has come up with a new way of managing the
relationship between resources and development. It has persuaded Chad's
government to acknowledge its own potential to misspend oil revenues, and to
cede a large measure of control over them. Whereas Nigeria's oil fields were
mainly run by the Nigerian government, Chad's will be developed by a
consortium of foreign companies. Revenue will be deposited and accounted for
in offshore accounts; then royalties owed to Chad will be parceled out, in a
manner predetermined by a special law, among a variety of poverty-fighting
projects.
To monitor all this, the government has set up an oversight committee. It has
kept four out of nine seats, with the rest going to two parliamentarians, a
judge, a trade unionist and a representative of Chad's non-governmental
organizations. Independent inspectors will conduct annual audits of how oil
cash is spent, and the audits will be public.
Chad's government has promised good things before. It has cut the army's size
in half and devoted two-thirds of the government's budget to development. On
the other hand, it held elections in 1996 and 1997 that were marred by fraud;
it officially tolerates a political opposition and a free press but has
sometimes locked up its most pointed critics. The new oil-monitoring system
may prove frail, because good intentions will be strained by the corrupting
power of money.
The rich governments that dominate the World Bank's board will weigh these
considerations tomorrow and decide whether to go ahead with the project
sometime thereafter. Despite the risks, they should proceed. There is no point
having a World Bank if it ducks hard projects with the potential to transform
a poor country's prospects. Rather than shy away, the Bank's role should be to
persuade private investors and developing countries to build the struggle
against poverty into their plans. In the case of Chad, that's what the Bank is
doing.
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All rights reserved.
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