N'DJAMENA (Reuters) - Chad's President Idriss Deby is using emergency powers after a rebel attack on the capital this month to sweep aside World Bank controls and bolster military spending, analysts and observers said on Thursday.
Using special powers under the two-week-old state of emergency, Deby has signed several decrees handing him personal control over the landlocked oil-producer's finances and circumventing World Bank attempts to ensure a large share of petroleum revenues go to social spending.
"Seventy percent of Chad's oil revenues are supposed to go to priority sectors, such as health and education, but now all this money is going directly to President Deby," an independent analyst of Chad's oil sector, who asked not to be named, said.
"The situation is critical. The World Bank can do nothing, their role has become almost nil in Chad."
One of Deby's measures allows him to approve Chad's 2008 budget by decree, and it will now become centrally controlled by him. Another decree suspended any requirement for competitive tenders in public procurement.
Deby said the emergency financial powers are "important and urgent measures aimed at maintaining order, guaranteeing stability and ensuring the smooth functioning of the state".
"It's a way of sending a clear message to say 'we are going to use this to buy arms'," a diplomatic source in N'Djamena told Reuters.
Deby's government has long-running tensions with the Washington-based multilateral lender.
The World Bank backed a $4 billion, 170,000-barrels per day (bpd) Chad-Cameroon oil pipeline, which started pumping in 2003, on condition the impoverished state earmark a large slice of the revenues for local communities, health and education projects.
Former World Bank President Paul Wolfowitz halted loans and froze the government's dollar account at Citibank in January 2006 after the government made a grab for oil revenues.
COMPLICITY?
Relations were restored in April 2006 when the government promised to allocate 70 percent of budget spending in 2007 for programmes to help the poor, down from 80 percent previously.
"It's not right that they don't react -- their silence means the World Bank are now complicit," said the oil analyst.
A World Bank spokesman in Washington said it had evacuated its staff from Chad shortly after rebels attacked N'Djamena on February 2. More than 250 people were killed in two days of confused street fighting, aid organisations said.
"Once it's possible to have discussions with the government, we'll explore whether it's possible to address pressing needs and ongoing development objectives," he said.
Chad's secretary of state at the Finance Ministry, Abakar Mallah Mourcha, said the emergency measures were essential because parliament could no longer operate as its building had been looted and destroyed during the attack on the capital.
But civil society organisations expressed alarm. "The execution of the budget is now subject to the good humour of the president," said one activist who asked not to be identified.
"It's the politics of destruction. It's catastrophic. Nobody has the confidence to invest here at the moment."
