Wealth Sharing or Development Sharing in Sudan?

By Professor Ali Abdalla Ali, Editor of Sudan Financial Times

October 21, 2007 — One great achievement in the year before Sudan achieved its independence in 1956 was the publication by the Department of Statistics of two important works, one was the results of the first Population Census the other being the results of first Sudan’s National Accounts. These two important publications were prepared by some able professionals namely Harvy and Kleve. These published data which were of a very high quality had produced some of the most authentic information on the Sudan, and clearly showed the size of Sudan’s population (10.5 million) and also showed the national income and most importantly as distributed among Sudan’s various regions at that time. The significance of these publications have shown the unusual and visible imbalance between Sudan’s various regions. The only prosperous place was the Central Region where Cotton used to be cultivated to satisfy the hungry mills of Lanchshire in the same that Sudan’s oil satisfies part of the insatiable need of China in present day Sudan.

This visible picture of imbalance was the direct outcome of the British imperial policy in Sudan. It was also what the British found easy to concentrate on in Sudan instead of looking for other types of raw materials which they were able to satisfy from its spread colonies. For example the Administration under the Condominium refused to allow some British companies to go for the Copper mines in Western Sudan in 1910,11 and 12, because that would have obstructed the smooth flow of casual labour from the Western Region when needed in the Gezira Scheme where Cotton was grown .All such regions were strictly controlled by the Closed District Ordinance(1925) (specially the Southern Region which was completely cut off from the rest of the Sudan), which prohibited the free movement of people among Sudan’s various regions.Therefore, the development of Cotton in the centre did not have a spread effect according to Myrdal’s theory of “Growth Pole”! In addition to that the various national governments that took over after independence did not pay attention to the publications referred to above in order to appreciate the importance of addressing to such imbalances and, therefore , avert their potential social implications which Sudan is suffering from at present. Instead most governments found no other than to concentrate in the already most developed parts of the country, leaving the rest of the country to remain marginalized save for few subsistence boards spread in those unfortunate areas . The only exception is the development of oil extraction, but even this important commodity is yet to contribute adequately to the overall development of all regions. In fact governance itself was never given the chance to survive to prove itself and the first military government took over from the elected government in 1958. Since then Sudan became a very unfortunate country alternating between military and civilian rule , the military constituting a total of 36 years out of Sudan’s 51 years of independence. During these decades all kinds of philosophies of development were applied thus destroying whatever is left of Sudan through this alternation which was at times very violent and bloody. That also explains why most of the educated Sudanese specially doctors, engineers, social scientists are spread in UK, USA, Europe and many other Arab , African and Asian countries helping in building countries other than their own.

In the above described context how was the affairs of the people taken care of i.e. their living, their health ,their education etc. etc.? In starting immediately after independence one could observe the continuation of the same system of colonial programming which started in 1948 and depended on the idea of a balanced budget which also depended on realizing a surplus in the limited budget before spending such a surplus in the various development programmes. It also aimed at making the colony to bear its own cost of any programmes implemented and any more funds were to be satisfied from the Egyptian treasury ! This kind of annual programming continued until 1961, when the first military government (1958) decided to start a long term plan of ten years to develop the country. Such a plan was a normal requirement after the second world war, when a country wished to attract foreign capital for its own development. It means that it was never meant to be a genuine plan which could transform the Sudan economy and achieve a real improvement in the life of the people. It was prepared with the help of two experts from the World Bank. It failed to continue from its third year, i.e. before reaching it tenth year in 1971.October 1964 uprising took place and the military were thrown out and what was called the second democracy came into being. The civilian Minister of Finance (late Sharif Hussein El Hindi whom I often think of as a kind of Sudanese Robin Hood!) indicated in his 1968/69 budget that it was not logical to adopt such long term plans in an economy which depended on a very uncertain income (meaning Cotton) and that it will be reasonable to adopt short term plans. As a result and inside Bank of Sudan at that time a five year plan for the public sector was prepared for the years 1970-1975.This public sector plan was designed around the construction of the Rosereis Dam at that time financed by the World Bank. It was supposed to be applied starting 1970-1975.It is a plan which many do not remember or mention when talking about planning in the Sudan. It was ready by early 1969.

In May 1969 a second military coup took place by Gafaar Mohamed Nimeiri apparently with the help of the Sudan Communist Party (SCP) which used to be one of the most vocal parties in the area. A ministry of planning was established for the first time in Sudan’s history since independence. Instead of adopting a very practical public sector plan, the plan was scraped and thrown away and the decision by the Planning ministry was to formulate for the same years 1970-1975 an overall economic and social plan based on strict socialist principles instead of a public sector plan restricted to public sector and around one single large project i.e. the Roseries Dam! In order to insure control over the financial resources of the economy nationalization was decided upon and adopted in May 1970 while the regime was having a celebration in the presence of late Gamal Abdel Nasir. It was argued by the authorities that no socialist planning could be possible without full control over all possible financial resources. The preparation of the plan was carried out by Soviet economic experts with the help of Sudanese graduates from Soviet universities since most experts were not fluent in either English or Arabic. The special feature of the plan was what was called the “Credit Plan” which was made for the whole economy by an expert named Dr .Stepanov with the help of some Sudanese economists in the Bank of Sudan. It had embraced every Sudanese pound moving around! After the plan was prepared the plan document ( in English!!) was handed over to the authorities and every draft or even every piece of stationary was packed and taken back to Moscow!

One year later and in July 1971, the SCP being a bit impatient with President Nimeiri decided to take over rule in Sudan. Their attempt was aborted in just three days and Nimeiri came out safe and took control of the country and economy. In a visible vendetta he killed all the main members of the SCP. Moreover and in order to clean the presence of the socialists specially in the well known Sudan Labour Union, he turned against their stronghold in Sudan Railways H.Q. in Atbara in Northern Sudan and created three divisions for the management of Sudan Railways in order to dilute their strength. The three divisions were Northern, Central and Southern. Moreover, he went to develop roads through Eastern Sudan and facilitated the introduction of heavy trucks on such roads in order to clean whatever remained of the strength of labour unions and in the process helped destroy one of the cheapest forms of transport. He did this through what he called the Phased Action Programme which became a substitute for the 5 year plan (1970-1975) prepared by the Soviet experts.

From then on and with increased economic and financial difficulties planning became a redundant instrument and short term policies became a substitute for medium and long term planning. In 1985 a popular revolt removed Nimeri’s regime and what is described “the third democracy” came into being. A transitional year in 1986 was followed by an elected government which lasted until June 1989 when the present government took over until now. During this period there was hardly any serious planning exercises because the overriding concern was the short term problems of the country.

1989 started with a three years salvation programme in order to contain the deteriorating economic and financial situation (1992/93) following a full scale liberalization with a sizeable devaluation of the Sudanese Pound in addition to waving of subsidies and exchange controls. The three years salvation programme was followed by a 10 year plan in the context of a 25 year strategic plan. By the time the CPA was signed the ten years were over.

The strange matter is that in spite of all these various so called development plans the Sudan remained one of the least developing countries of the world. Possibly one exception was in 1974 when ex-President Nimeiri attempted to introduce regional laws and regional planning in Sudan as a way to reduce the very imbalances among Sudan’s diversified regions. The exercise did not succeed. That was a first gleam of hope but did not come through.

The incessant alternation between military and civilians and the fall out of the leaders of the Sudan Civil Service and emigration of well trained Sudanese cadres to the outside world specially to the Gulf countries, whenever a change took place as well as the stop-go policies resorted to every time economic and financial crisis take place as well as other factors were all behind the a lack of achievement of a sustainable development. One is tempted to think that it was not planning as a logical instrument but rather the way and the environment in which it was practiced. One wonders as to whether this long experience and lessons of planning were thought of during the long negotiations in Nevasha? Because as we have mentioned planning and plans although very rational instruments yet did not bail out the economy from its underdeveloped state during the last five decades, but if it were taken seriously at the juncture of Nevasha things might have been different . In other words instead of concentrating on the issue of wealth sharing the concentration should have been on sharing development and therefore, a lot of the present agonies would have been averted. One is also tempted to ask as to which of the two parties insisted on wealth sharing and not development sharing as we will argue in the rest of this short article?

It must be admitted that the question of wealth sharing was one of the early exercises which was started by Khartoum government long before the starting of Nevasha negotiations. The writer had participated in this Committee but was never convinced about the concept. One always had the strong feeling that what Sudan and its various regions needed so much was development and correction of the unusual imbalance between its various regions as mentioned before, rather than the sharing of wealth. Wealth needed to be created , enhanced and deepened by development and growth before it were to be shared.

Without trying to ask as to what has been done with revenues shared one would like to discuss the alternative scenario which should have been adopted by the two parties and which should have been executed starting from the day the CPA was signed i.e.9th.January 2005 two years and ten months ago!!

1) During the Nevasha negotiations an overall plan for the whole Sudan should have been contemplated and designed. By the time Nevasha negotiations took their full thrust, there was a fairly adequate knowledge about the Sudan’s economy prepared by the Joint Assessment Mission (JAM) and also in the various government institutions and even with the SPLA/SPLM, which could have justified a plan whether five or six years. Such a plan were to start from the day Nevasha negotiations came to a close and the CPA was signed (i.e.9.1.05).

2) Such a plan would have been implemented from the day the CPA was signed. Financing of such a plan would have drawn its resources internally from the central government and the share of both the North and South in the oil revenues( perhaps after deducting a certain percentage for running the government machinery).Whatever deficit in resources expected could have been covered by the borrowing from international institutions, bilateral assistance and any funding from the international community, since the international community must be theortically keen to see stability and development spread in all the regions of the Sudan.

3) In order to execute such a plan, a Planning Agency or Commission could have been established for the whole Sudan. Such a Commission could have been headed by the Presidency as understood in the CPA agreement in addition to covering the other regions of the Sudan i.e. Western and Eastern regions. The technical body could have been formed from technicians in North( including both West end East),the South ,the World Bank, the Arab Fund For Economic And Social Development (AFESD). Such a combination would have embraced most of those who had a stake in settling the peace problem . Moreover , such an arrangement would have insured the involvement of the entire Sudan and also assure donors and the international community that whatever resources are poured in would get to the real beneficiaries. There is no way as to describe such an involvement by such institutions as being a clear intervention in the country’s affairs since they were already the very designers of the CPA.

4) Of course that does not exclude capacity building for all the Sudan specially in the South and other less fortunate regions. Part of the domestic resources could have been allocated for such a purpose side by side with existence of planning institutions that should be carrying out and following up of the development projects. If the need for institutions to manage and institution to carry on with the objectives of executing projects went side by side starting from the day the CPA was signed considerable development would have taken place in the South and a good part of the problems of Darfur and the East might not have taken place. Instead the North designed its own 5 Year Plan for the years 2007-2011 two years after the signing of the CPA and the South some time before that designed its own 200Day Action Plan declared by the First VP and Chief of the Government of South Sudan (GOSS) in the Southern Assembly. The South plan remained independent of the 5 Year Plan declared by the government in Khartoum in about six months from the official date of starting i.e from 1.1.1007.Therefore there are in effect two plans one in the South and the other for the North. There seems to be no relation between them. Even when the 5 Year Plan 2007-2011 was launched in the Friendship Hall by President El Beshir, he blamed the officials from the GOSS for not attending the launching of the plan and be able to make use of the planning experience of the North at a time when the 200Day Action Plan was already operating and confirmed by the Assembly of the GOSS. In this way it became clear that every party was having it his own way. In this way also unity became a distant wish for the optimists since the seeds of distance has been planted in Sudan’s soil.

*The writer is Professor of Economics, College of Business Studies, Sudan University of Science and Technology, Khartoum, Sudan. He is also Editor, www.sudanfinancialtimes.com . He is reachable at
[email protected]. .