Foreign Policy In Focus

Cross-posted from the Arabist.

South Sudanese President Salva Kiir this week addressed a letter to dozens of “former and current senior government officials” pleading with them to return an estimated US$4b in “missing” government funds. The Globe and Mail reports that the US$4b reportedly stolen would add up to approximately 2 years’ worth of oil revenues for the country, which upon seceding from Sudan took about 75% of Khartoum’s oil reserves with it (amounting to some $5b worth of annual income, according to the Petroleum Economist trade publication). Some US$60m has reportedly been recovered, but continued mismanagement, graft and badly bid contracts (most notably, for food imports) means that additional funds still remain unaccounted for and may be unrecoverable.¹

Despite the emotional plea from Kiir, in an un-encouraging sign for transparency in South Sudan this past April, the ruling Sudan People’s Liberation Movement (SPLM) Party that Kiir leads “voted against a bill seeking to make contracts and information about the young country’s oil industry more transparent by making it available to the public.”

From the Sudan Tribune:

The lawmakers’ decision has created some public criticism. As well voting against the Petroleum Bill, which would have required the government to provide justifications for oil contracts with individual companies, MPs also voted against publishing sales and production data.

During deliberations, George Bureng, an SPLM member of the National Assembly representing Central Equatoria State said he would prefer to see that oil related information be limited to only relevant institutions not the general public because information about oil could be used against the country by her enemies, referring to Khartoum.

“It is good to allow [the] public [to] access any information but sometimes there is sensitive information which cannot be made available to the general public”, Bureng told the house.

Tensions are high in both Khartoum and Juba as a result of a recent conflict over the disputed oil fields in Helig (which was occupied by South Sudan) and the border region of Abeyi (which was occupied by Sudan). Though the fighting has died down, talks on establishing a demilitarized zone have stalled, the AFP reports from Addis Ababa, where the African Union-brokered talks are taking place:

Peace talks to end weeks of fighting between Sudan and South Sudan were deadlocked Tuesday after failing to agree on where to set up a demilitarized zone along their contested border.

“The position of the parties is still rather far apart on these issues,” South Sudan’s foreign minister Nhial Deng Nhial told reporters during a break in the week-long talks, which still continue despite the lack of progress.

“We have not yet been able to agree on the line from which the safe demilitarized border zone is going to be drawn,” Nhial said, but adding he remained optimistic a deal could yet be reached.

Further complicating these talks is the arrival of delegates from the Sudan People’s Liberation Movement -- Army North (SPLM/A-N). This organization is the branch of the SPLA, whose leaders dominate South Sudanese government, still operating in Sudan (the SPLA was founded in 1983). Small Arms Survey notes that because “the political and military high command in the SPLM/A-N significantly overlaps,” “the political and military goals of the organization can be viewed as one since it is now an armed opposition movement in Sudan.”

As a result, though SPLM/A-N delegates were invited to the talks by the African Union, Khartoum has “excluded” them from the talks. Fighting in Sudan’s Nuba Mountains between the SPLM/A-N continues, and the continued iciness between Juba and Khartoum over the SPLM/A-N’s insurgency seems irresolvable. Khartoum’s armed forces are reportedly too worn down by years of attritional counterinsurgency operations in Darfur and the “Three Areas” provinces (including the Nuba Mountains) to launch a full-scale operation against South Sudan, but refuse to give up any more territory to the SPLM/A-N. Meanwhile, Juba simply does not wish to lose a force operating in the border provinces of the regime whose embrace it just escaped from. Plus, there is the question proposed by Philip Thon Aleu to a South Sudanese governor last summer that offers insight as to why Juba would be hard-pressed to accept any “compromise” initiated by Khartoum over the “Three Areas” region:

The SPLM was joined by people from South Kordofan, Blue Nile and people from other parts of the country who are not from South Sudan. How do you think about those people who are not part of south Sudan’s freedom today? And what is the way out?

Resistance to demobilization of secessionist militias and some SPLM units is already proving to be a challenge for South Sudan. And neither side is likely to make the first move towards a ceasefire with or recall of the SPLM/A-N -- which has its own particular goals, of course -- for fear of being perceived as “weak” in the eyes of the other.

No “great power” better understands (and plays off of) these clashes than the People’s Republic of China. Beijing is Khartoum’s primary arms dealer, but at the same time presents itself as a mediator to both countries and takes the bulk of the two countries' oil exports. Even though most of Sudan’s oil now lies in South Sudan, the extensive damage to facilities (and investor flight over the past several years) and continuing transit dispute between the two countries means that the Chinese have a long way to go in implementing a comprehensive plan for the country.

Though Beijing just reached an agreement to build up South Sudanese “infrastructure,” a pipeline agreement was conspicuously absent. South Sudan is landlocked, and has since 2005 depended on Sudanese facilities or trucks to deliver its crude to ports, paying Sudan transit fees. China does not wish to alienate Sudan, with which it has a much closer relationship, yet South Sudan has the most potential for growth -- and as bad as Sudan’s economy is, South Sudan’s is much worse, and much more dependent on foreign aid with strings attached.

It’s about a lot more than the oil for Juba and Khartoum, but oil is the prism through which the two government’s “great power” backers will most likely see their conflict.

¹An unknown percentage of the lost money is thought to have been pocketed by officials to buy property overseas. Interestingly, last year, the Oakland Institute reported that American speculators were buying up South Sudanese properties. 

Cross-posted from the United to End Genocide Blog.

One year ago today (January 9), millions of Southern Sudanese stood in long lines to vote for independence in a national referendum. The sense of hope and the inspiration that I experienced last year in the streets of Juba when people gathered to celebrate the official birth of this new nation has been undermined by mass killings perpetrated by the forces of Sudan President Omar al-Bashir and inter-ethnic strife in the south. And things are getting worse.

The citizens of the newest nation on earth need and deserve more from us. The United States and international community must immediately take robust action to address the ongoing inter-ethnic violence in South Sudan and attacks by Bashir’s forces which are creating a new, massive humanitarian disaster.

Recent accounts of thousands being massacred in escalating ethnic violence - and a looming humanitarian disaster – underscore what is at stake and why more of the same cannot be an option.

Fighting between ethnic groups in South Sudan is taking a devastating toll. In 2011, more than a thousand South Sudanese were killed in tribal violence. Just last week, inter-ethnic fighting in the country’s Jonglei State is estimated to have killed hundreds and, according to some reports, possibly thousands. This worsening pattern of death and destruction threatens to spiral out of control without intervention.

Sudan’s President Bashir has committed acts of war against South Sudan, launching a series of attacks across the border since November. These attacks have killed innocent civilians and members of South Sudan’s armed forces, which are already stretched far too thin. Instead of imposing consequences for the actions of Sudan’s Bashir, the United States has publicly urged South Sudan not to respond in its own defense.

It is not enough to host a conference on South Sudan’s development needs, as the administration did last month in Washington. Increased and sustained diplomatic and material support is needed for the already overstretched UN Mission in South Sudan, including more peacekeepers for civilian protection and provision of helicopters to allow quick access to areas threatened by ethnic violence.

But any level of support will fail as long as Omar al-Bashir, Sudan’s president and international criminal wanted for genocide, is allowed to continue his relentless assaults on innocent civilians on both sides of the border. President Obama and other world leaders must once and for all get serious and get tough on Bashir, hold him fully accountable and stop the damage he continues to inflict with impunity. The President needs to lead the international community to expand Sudan sanctions, secure immediate access for humanitarian aid organizations while providing a robust investment in humanitarian aid, and expand the mandate of the International Criminal Court. This must be done immediately and involve the highest levels of government leaders.

As I said in a news release last week, the stakes are too high for piecemeal approaches and timidity. This is being reinforced almost daily with news from South Sudan and the border regions within Sudan including Blue Nile and South Kordofan.

We know that when the United States Government is paying attention and exercising its influence, progress can be achieved. And, we know that the strength of our voices so often mark that fine line between government action and indifference.

Many of the people who I met in South Sudan expressed gratitude for the attention and activism of so many in the United States that made hope – and independence – possible.  More attention and more activism will be needed to restore hope – and peace – to a battered and beleaguered people.

Tom Andrews is the President of United to End Genocide, which has just marked its one-year anniversary.

In the past months, the South Sudan government has been receiving substantial pressure from the international community to institute greater transparency in its oil industry. This involves full publication of royalties and oil revenue transactions between companies and oil extracting countries. Transparency helps ordinary citizens see exactly how their natural resources are being managed. It helps to prevent corruption, and assist with the avoidance of the resource curse, which is the depreciation of the extractive country’s currency.

Yet, does transparency ensure that South Sudan’s oil assets will be used for advancement? Will transparency initiatives take a back seat to precedence issues like security and violence?

Transparency does not guarantee that the government will use oil revenues for the benefit of the many; however, it will allow publication of oil revenues to be speculated and will hold the government accountable. Transparency is a stepping-stone to supportive governance. South Sudan has already been carrying out the necessary measures to guarantee it does not fall victim to the resource curse. South Sudan plans on becoming a candidate for the Extractive Industries Transparency Initiative (EITI), which increases transparency over payments by companies to governments and to government-linked entities; as well as transparency over revenues by those host country governments. Before South Sudan seeks candidacy for EITI, it first has to establish a Freedom of Information Law, which ensures public access to government records. Providentially, South Sudan has already composed such a proposal.

The world has already seen countries fall victim to absent transparency initiatives. The Republic of Equatorial Guinea is a prime example of a country that relies heavily upon its natural resources for revenue, but counterproductively spends funds much needed in the development of the country. According to EG Justice and Human Rights Watch, the Republic of Equatorial Guinea’s oil revenues makes the country’s per-capita wealth in 2010 equivalent to that of Germany, Japan, or the United Kingdom; however, poor governance and a lack of transparency has caused the country to remain poor and be ranked as the world’s 14^th worst country on UNICEF 2009 indicator.

With the amount of pressure and press that South Sudan has been receiving, it should not be long before South Sudan implements the Freedom of Information Bill and applies for compliance under EITI. On June 16, 2011, the Subcommittee on Africa, Global Health, and Human Rights held a hearing concerning Africa’s newest nation. During the hearing, Dana L. Wilkins, who is the Sudan campaigner for Global Witness, talked about actions that the South Sudan and U.S. governments should take to ensure successful transparency and accountability of South Sudan’s oil revenue. Ninety-eight percent of the nation’s budget is derived from oil, and South Sudan is in line to be the most oil dependent country in the world when it officially becomes a country on July 9. Transparency initiatives are being heavily pushed from civil society watchdog organizations like Global Witness and Publish What You Pay.

Despite the possible long-term implementation, extractive regulations can benefit the country if enforced correctly. Global Witness’ recommendation of an independently monitored oil sector takes into account the possible mishandling and inaccuracy of production information. According to Wilkins, an office should be established separately from the Ministry of Energy and Mining that should report directly to the Legislative Assembly. This office’s sole responsibility would be to monitor and verify the petroleum sector. So that this office can acquire funding, be independent from the government and gain, the United States should provide this independent office with training and political support to make sure that it does an effective and efficient job of getting the necessary, accurate information published to the public.

Unfortunately, an office independent from the government to monitor and publish revenue data will not be enough to provide security for South Sudan. One essential piece to ensuring a strong nation is focus on sectors that the revenue will be able to benefit. Oil revenues should provide a platform for diversification of the region’s economy through development of the private sector and the agricultural sector. According to the Sudan Tribune, Riek Machar, the future vice president of South Sudan, appealed to international partners to prioritize agriculture and livestock in the private sector program. South Sudan has the most fertile land for agriculture in Africa, which he said could turn the region into a breadbasket on the continent, if not, the world.

A key partner for South Sudan on agricultural development is Malawi. The president of the Republic of Malawi, Bingu Wa Mutharika, proposed a partnership with developing nations, like Southern Sudan, to join together and focus on agriculture and food security as the key for growth. This proposal is known as the African Food Basket Project. This growth involves investments in transport infrastructures, energy development, and climate change mitigation through innovative interventions such as subsidies, increased budgetary allocations, private sector investments, and communication technology. Aside from private sector and agricultural development, South Sudan has already been attracting big time investors into their territory. The international brewery company, SAB Miller, established Southern Sudan Beverages Ltd and developed a brewery in Juba in 2009 with a $37 million dollar investment. 

Transparency and accountability initiatives are vital. Yet, these initiatives will take a back seat to other priorities, such as security and violence. Transparency is not the only solution, but it is a major step in the direction of securing a government that earns the support of the South Sudan community.

Simone D'Abreu is an intern at Foreign Policy in Focus.