World Bank considers relations with Khartoum
KHARTOUM, Sudan, Mar 12, 2005 (PANA) — Barely two months after the government
in Khartoum and separatists in southern Sudan signed a definitive
peace deal to end 21 years of civil war, the World Bank considers
normalising relations with the heavily indebted country within a
year, a local daily reported Saturday.
The Sudan Vision quoted Ishac Diwan, new World Bank country
director in Sudan, as saying that Britain had taken the lead in
normalising relations with Sudan, which fell out of favour with
international lenders when it failed to honour debt repayments.
“Sudan has been outside the international financial community for
about 20 years now and so, there are arrears to the international
community, to the private sector, to financial institutions, to
countries — and all this needs to be sorted out before Sudan can
borrow again,” the private-owned newspaper quoted Diwan as saying
in an interview.
Sudan owes some $25 billion in debts which need to be reduced to
about $6 billion before it could resume relations with the World
Bank, said Diwan, who is based in Addis Ababa, Ethiopia.
“I would expect this to happen within a year,” he added.
The paper said Diwan spoke Friday on the sidelines of the launch
of Sudan’s six-year plan for rebuilding the war-shattered country
ahead of a meeting of donor nations in Norway next month.
According to the plan, Sudan will need $7.8 billion between July
2005 and the end of 2007 to build roads and railways, establish
health care and schools in areas devastated by 21 years of civil
war in southern Sudan.
But the country is expected to appeal for $2.66 billion at the
11-12 April Oslo meeting, and will generate the rest of
development funds through oil revenues from the 320,000 barrels
per day it currently produces.
However, the paper claimed that some rights activists argue that
donor money and the right to borrow from global lenders like the
World Band should be withheld from Sudan unless the Khartoum
government does more to resolve the escalating crisis in the
western region of Darfur.
Fighting between two rebel movements and government troops and
its allied Janjaweed militia has killed an estimated 70,000
people in Darfur since early 2003.
The World Bank reopened its Sudan office in January after more
than 10-year absence, anticipating the country’s huge
reconstruction efforts following the peace pact signed on 9
January 2005 between the Khartoum government and separatist
rebels in the south.
The Bank was already involved in Sudan, giving technical advice
on wealth sharing in the recent peace process, and would manage
foreign donations in a trust fund.
“The risk in a post conflict country where donors were not
engaged is to have a donor circus — all donors coming at the
same time, looking for projects, planting their flags — it could
be a mess,” Diwan said.
“The multi-donor trust fund is the instrument to do that
(coordination),” he added.
Under the peace deal, a national government of unity will split
Sudan’s oil wealth 50-50 between the north and south.
Diwan said oil revenue would catapult the south’s annual per
capita income to around $200-$300.
“South Sudan will become the richest government in East Africa.
It will be three times richer than Kenya,” Diwan observed.
He pointed out that, as southern leaders were aware of the ‘oil
curse’, they have started establishing financial controls to
prevent corruption.