FEATURE-Sudan on extensive political, economic reforms

By Ibrahim Dagash

KHARTOUM, Sudan, May 22, 2005 (PANA) — A quiet revolution is
unfolding in Khartoum which could help Sudan to
stabilise its political scene and jumpstart its
economic development after years of warfare and
senseless destruction.

A Sudanese in tribal clothes celebrates the peace treaty signed between Khartoum and SPLM in Nyala, in Sudan’s South Darfur region. (AFP).

Moving simultaneously on the political and economic
fronts, work on the drafting of the new transitional
constitution is in full gear, while extensive
economic reforms have given the country the observer
status at the World Trade Organisation (WTO).

Work on the drafting of the new transitional
constitution is making progress in accomplishing its
task in accordance with the Naivasha comprehensive
peace accord signed in Nairobi, Kenya 9 January to
end two-decades of conflict in southern Sudan.

The Khartoum government and Sudan People’s Liberation
Movement (SPLM) are pursuing the discussions to lay
the framework for power sharing and democracy in
Sudan after years of civil war between the south and
the central government.

Some opposition political parties are boycotting the
discussions on grounds that the ruling National
Congress Party and SPLM are dominating the commission
with a majority which makes the two the main power
brokers in the politics of the country, sources told
PANA here.

The government and SPLM argue that the issue of
representation is clearly stated in the Naivasha
comprehensive peace accord to which all Sudanese
political players committed themselves.

Sources say whether the opposition parties eventually
join or not, the Constitution Commission would
proceed with its work that paves the way for a new
governmental set-up which should go into force by
July 2005.

Under the arrangement, the SPLM will be the main
partner of the central government, with John Garang
as Vice President. It is expected to include other
political forces in what is to be the most inclusive
government of Sudan since independence.

As the political scene is expecting a major shake-up,
the economic and trade sector is apparently preparing
for a huge U-turn to coincide with the change,
especially as Sudan has finally been granted the
observer status in the WTO.

Sudan initially applied to join the WTO in 1994. But
it was not until 2002 when the Chief National
Negotiator was appointed that real work began on the
membership file, following the submission of 22
documents to the secretariat of WTO in Geneva.

Two groups were then formed and bilateral
negotiations began to prepare for a third group that
was to examine the economic performance of Sudan. By
March 2005 when the third working group had planned
to meet, Sudan was hardly ready, although the
postponement was suggested by WTO itself.

This was good for Sudan because it has used the last
two months to initiate a series of sweeping reforms
in the economic and trade sectors that now give the
country a negotiating posture commensurate with its
real economic capacity. Last year Sudan registered an
unprecedented growth rate of 9.5 percent.

With those reforms in place, economists agree that
Sudan now has the technical framework necessary to
cope with WTO regulations and budgetary discipline.

According to the commission handling WTO affairs in
Khartoum, the council of ministers had already
endorsed the legal framework that caters for the
modification of existing trade laws, including
customs and excise duties. What is most significant
is the introduction of 22 new laws in that sector
alone.

Given the new political situation in Sudan, the
Commission for WTO Affairs has undertaken a review of
all the documents it had earlier submitted to Geneva,
so that the final documents take into account the new
engagements of the government as stipulated
in the Comprehensive Peace Accord between the
government and the former rebels of the SPLM.

The most important thing would be to ensure that the
country’s obligations under article 12 of the
Marakesh Agreement are upheld.

The WTO commission has also embarked on the
implementation of the directives of the Council of
Ministers regarding the adoption of draft laws and
general policies necessary for the country to
benefit from exemptions and exceptions WTO generally
accords the so-called Least Developed Countries
(LDCs).

For Sudan to fully conform to WTO regulations and
disciplines, exemptions and exceptions, a
transitional period was inevitable because of the
profound changes this would entail. The period of the
Observer Status granted the country would serve this
purpose.

The area to be affected most by way of structural
amendment would surely be government-owned companies,
as they would need to reform to match the definition
stipulated in article 17 of the General Agreement on
Trade and Tariff (GATT).

The services sector will also undergo major changes
to meet the new orientation, notwithstanding any
bilateral, regional and international agreements
Sudan has already signed. This is why the office of
the Attorney General has been assigned the duty of
reviewing all existing agreements, in collaboration
with the WTO Commission.

Perhaps the good news for the general public is that
there is a directive which has called on the
commission to enumerate and study all forms of import
and export taxes imposed on services to ensure that
such taxes are equivalent to the actual services
being rendered.

Some of the current practices concerning the origin
of all commodities and fees of documentation are also
to be revised. The Commission has charged the
ministries of finance, trade and justice to make
concrete proposals for a law that will serve as a
basis for determining the national origin of goods.

It is significant that the Council of Ministers
Directive calls on the ministry of finance and
economy to, in consultation with the WTO commission,
take all the necessary steps to cancel all non-excise
and customs duties or replace them with custom
charges to ensure that they meet with the
requirements of the WTO tables.

This will affect a number of superficial charges and
duties now in force at either national or state
levels since the inception of the Salvation Regime
(INGAZ) of 1989.

Finally, the Customs Authority, which is the tutelage
of the ministry of finance and economy, will have to
be reformed as well. This department, which is one of
the most unpopular departments of the government,
will also undergo restructuring.

Its current organic law will be amended to allow for
the establishment of an independent body whose duty
would be to handle complaints and grievances of
businesses and individual users. That body has to be
in place before Sudan joins the WTO as a full member.