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Last Updated: Thursday, 13 April 2006, 13:01 GMT 14:01 UK
Oil politics fuels Chad violence
By Mark Gregory
BBC World Service business correspondent

People buying black-market petrol in N'Djamena, the Chadian capital
The black market is rife in Chad
The vast majority of Chad's 10 million people depend on subsistence agriculture for their livelihoods.

Living standards are some of the lowest in the world.

Chad is currently ranked in the bottom five out of nearly 180 nations rated by the United Nations in its annual human development index assessment.

Yet the country has one major source of wealth - oil - and it has only started to be tapped in the last few years.

The fighting in Chad is not directly about oil, but oil has made control of the government there a political prize much more worth fighting for.

As so often in Africa, political tensions are in part a scramble for who gets the income from mineral wealth.

Chad has been exporting oil on a significant scale since 2003.

Inevitably, some of the money has been spent on arms

It is reckoned to have reserves of up to one billion barrels.

That's not large in comparison to major oil producers in Opec, but by local standards, the potential spoils are vast.

Controversial pipeline

The key to unlocking Chad's oil wealth has been the construction of a 1,000 mile pipeline from Chad through Cameroon to the coast.

That project was given crucial backing by the World Bank, which lent money and support on the basis that much of the income would go to poverty alleviation.

This was written into Chad's laws.

But a few months ago the Chadian government changed the law, giving itself greater discretion to spend oil revenue as it saw fit.

Inevitably, some of the money has been spent on arms.

The World Bank subsequently froze large sums of development aid to Chad as a mark of its displeasure.

It has been one of the most controversial episodes in the organisation's history.

'Curse of oil'

Campaigners say Chad has become yet another African country where mineral wealth is contributing to instability and making life worse for most people, rather than bringing them higher living standards.

The problem is, how do you do stop small elites from pocketing the proceeds or fighting among themselves as to who gets the spoils in places where there are no strong national institutions and enforceable rules?

Rows over who gets the benefit from oil and mineral exports are major factors behind conflicts in Nigeria's Delta region, Angola, the Democratic Republic of Congo and numerous other African nations.

No wonder commentators have begun referring to the "curse of oil".

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