World Bank ok with blood for oil

In 2004, oil began to flow through the World Bank-financed Chad-Cameroon pipeline. The $3.7 billion project is the second largest private investment project in sub-Saharan Africa

It has been a year since the horror of the bloodshed in Sudan’s Darfur region–with over 200,000 dead in three years–began leaking across the border into Chad. It has also been a year since a simmering conflict boiled over into a full-scale confrontation between World Bank President Paul Wolfowitz and Chadian President Idriss Deby. Are the two connected? In a word, yes. Here’s how.

In 2004, oil began to flow through the World Bank-financed Chad-Cameroon pipeline. The $3.7 billion project is the second largest private investment project in sub-Saharan Africa; oil discovered in Chad’s Doba region in the 1960s would not have finally reached the marketplace but for World Bank finance. The reason: Chad is a war-torn country, the fifth poorest in the world and among the world’s most corrupt. World Bank support meant guarantees of risk insurance for the oil companies involved–Exxon, Chevron and Petronas–in the event of a civil war or other disruptions to the oil supply.

The historic agreement between Chad and the World Bank–announced with much fanfare and in defiance of civil society’s warnings–had explicitly stated that 80 percent of all revenue from the sale of the oil would be directed at poverty alleviation, health care, education and a “future generations” fund.

Although publicly, the Bank declared the project to be proceeding as planned, a U.S. government interagency review conducted in the first six months of the project indicated that 60 percent of the $25 million signing bonus awarded to the government of Chad had been spent “outside of established budget procedures”–in other words, pocketed by government officials or spent on such things as arms–and that “Chadian governance was weakening, civil conflict and risk of famine were increasing and parliamentary elections appear to have been postponed.”

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