Chad: How China Created an African Power
How Chinese investment made Chad a vital Central African military ally of the West.
December 26, 2013
In August 2013, Chad’s government indefinitely suspended the activities of China National Petroleum Corporation (CNPC). This action was taken after immense oil spills were found at an oil exploration site.
The recent fallout – while likely to pass – falls within a wider struggle for the Chadian government to determine the extent to which nations making investments can play a role in the country’s oil management.
Chad remains one of the poorest and most conflict-prone countries in Africa. Only one in three adults can read and write, while 62% of its 11 million people live on the less than one dollar a day.
Its leader, President Idriss Deby, has been in power since 1990, with few African leaders rivaling him for longevity. Deby is not keen on giving power anytime soon.
Oil starts flowing
Chad only started exploiting its oil resources about 10 years ago. Although Western nations and companies started showing interest in the 1970s, Chad’s oil remained untapped until 2000, because of the country’s instability and the oil’s low quality.
Chad’s first oil project, the Chad-Cameroon pipeline, was launched in October 2000. It is operated by a consortium of oil companies led by Exxon Mobil, Chevron and Petronas (based in Malaysia). The World Bank Group provided conditional loans to the Chadian government. These required the government to use oil royalties to improve health and education.
By 2006, the government had instead steered most royalties toward defense spending, claiming it was necessary to defend against a Sudanese-backed insurgency.
In response to the Chadian government’s redirecting of the oil royalties, the World Bank withdrew its funding from the pipeline project in 2008, and required Chad to pay back the loans.
Meanwhile, Chad was establishing a closer relationship with China. In 2006, Chad transferred diplomatic ties from Taiwan to mainland China. Then, in 2007, China purchased the rights to a large oil exploration zone.
There have been some clear benefits to China’s presence in Chad. China has finished some key infrastructure projects, including several roads, railroads and a hospital.
China has also agreed to build a new international airport in Djarmaya. This facility will be capable of accommodating around one million passengers a year, which will be connected to N’Djamena through a 40-kilometer highway, also funded and built by the Chinese.
Nevertheless, due to its policy of non-interference, China opts not to meddle in Chadian internal affairs, as long as the oil flows. So, it comes as no surprise that by 2011, Chad produced an output of 120,000 barrels per day. However, its population was seeing none of the benefits of oil production.
Ironically, despite China’s non-interference policy in the domestic affairs of African countries, Chinese investments in Chad are having a sizable geopolitical effect in the wider region. A large portion of Chinese oil royalties is being invested in arming and training the Chadian army.
As a result, Chad’s military is now considered to be one of the best equipped in sub-Saharan Africa. The country has also been able to finance costly foreign interventions without outside help.
A new role for Chad
Deby uses the army primarily as a mechanism to maintain power within Chad. But internationally, he has made Chad an indispensable military force in African and international missions against Islamist rebels and militant groups. That brought the West’s support back.
As a result of its growing military role, the country was even awarded a temporary two-year seat on the Security Council in October.
Chad also currently collaborates formally with the United States in its fight against terrorism through the Trans-Saharan Counterterrorism Initiative (TSCTI).
In turning to China as Western partners backed away, Chad found the help it needed to develop its military, which made it relevant to the West again. The West needs Chad to remain a key partner in ensuring stability in a highly volatile region.
At the same time, Chad holds significant military ties with its former colonizer, France, which maintains a military presence in Chad. The French military’s role there is to protect French interests and the existing government. France seems to have extended the Chadian exception to its recent policy against supporting dictators in its former African colonies.
Chad further strengthened its position as a key regional power by intervening in two former French colonies in 2012 and 2013.
At the end of 2012, at the request of its government, and in cooperation with other African governments, Chad intervened in the ongoing civil war in the Central African Republic. The Chadian military deployment made up the bulk of international troops.
Chad continues to maintain a large military presence in the Central African Republic, despite the March 2013 coup, and will likely participate in upcoming peacekeeping operations with France.
Chad also had a sizable military participation in the early 2013 French-led operations in Mali against militant Islamist groups. In Mali, Chadian troops worked closely with French troops who otherwise eschewed partnering with African troops from the multinational intervention force.
Economic and security partnerships
The West is still a key investor and trading partner for Chad through the Chad-Cameroon pipeline project. However, China has provided much more long-term development support to Chad and has grown the oil sector on the ground in a way the West has not.
For China, Chad is a key source of oil. For Western countries, such as the United States and France, it is more a country of military significance in the region.
With the failure of the World Bank’s conditionality approach to oil development and China’s no-strings-attached investments, it is clear Chad will not see political reforms in the near future.
Chad’s citizens will continue to experience their country’s resource curse, as long as they have a president who uses oil to consolidate his position internally and internationally, while ignoring his people’s needs.
Chad’s finance minister has announced that he expects oil output to triple by 2015. But unless things change unexpectedly it is unlikely that the Chadian population will see any benefits from it.
For China, Chad is a key source of oil. For Western nations, Chad is more a country of military significance.
World Bank loan conditions required Chad to use oil royalties to improve health and education.
Chad’s government steered most oil royalties toward defense spending, instead of health and education.
Despite China’s non-interference policy, Chinese investments in Chad are having a big geopolitical effect in Africa.
A large portion of Chinese oil royalties is being invested in arming and training the Chadian army.
Chad’s president uses the army primarily as a mechanism to maintain power within the country.
The West needs Chad to remain a key partner in ensuring stability in a highly volatile region.
Chad will continue to experience a resource curse, as long as they have a president who ignores his people.