The most recent Article IV consultations between the IMF and the local authorities, published in July 2010, highlighted the Fund's grave concerns about the direction, efficiency and management of public spending. Disagreements about the level of spending in 2010 have prevented a staff-monitored programme from being approved, sending a strongly negative signal to investors and donors alike. Moreover, the government will not hesitate in 2011-12 to sacrifice fiscal prudence again should the security situation demand it.

Despite the outlook for dwindling oil output, the regime of Mr Déby is expected to maintain the mentality of a rentier state, failing to invest adequately in economic diversification and structural reforms to improve the business environment, which the World Bank recently ranked as the world's most difficult. However, even the government's weak efforts in that direction are likely to have some positive impact-particularly its road-building programme. There are two other small sources of hope. First, the poverty reduction and growth strategy (PRGS) for 2008-11 may make some headway towards economic diversification, rural development and better governance, although the disappointing record of the previous PRGS counsels against optimism. Second, in support of the country's candidacy for the Extractive Industries Transparency Initiative, the authorities should improve governance in the oil sector; the IMF praised the interim petroleum revenue management mechanism as "exemplary".