Sudan: governance after the economic crisis
By Nyuol Justin Yaac
April 4, 2009 — THE YEAR 2009 has opened with an economic, social and political crisis caused by the catastrophic meltdown of the global financial system. All the scourges of the 20th century are once again erupting—mass unemployment, poverty, repression, nationalism and inter-imperialist war—in ever more destructive forms.
The current economic disaster, from the onset, quickly relapsed to a three phased soliloquy. First it hit the major world economies—the U.S, China, Japan, England etc.; then, it quickly melted-down to the industrializing capitals and finally indenting the economies of the third world. In the advanced and the industrializing world, the global financial crisis was ostensibly visible in the forms of job loss, homelessness and so forth. In the third world, the economic brunt was equally cataclysmic, however, less visible because the recession, in essence advanced a situation that was already dire, therefore, making it seem like a normal situation.
This madness must stop! Great economic advances in science and technology, accompanied by an unprecedented global integration of economic life, have created the potential for a new era of human prosperity. Yet young people and the posterity continue to confront a world full of war and want, massive poverty and disease, pending environmental catastrophe, cultural backwardness and superstition, and assaults on the most basic democratic freedoms, this is much so in the third world.
In an effort to rescue their national economies, advanced countries, are injecting billions and billions of dollars into their banks, under the rubric of “stimulus packages.” In the third world, where economies are solvent, bailing out banks is surreal or the last item on the agenda of top policy-makers, if given any consideration at all.
Sudan’s Economic Downturn
The Sudan, a country transitioning from war and one whose economy is anchored in oil exploration, a drop in the world oil prices amalgamating with the current economic depression has doubly exacerbated the national economic condition, and by extension, the political situation—which to begin with, was already fragile and fractured. Late last year, when oil prices plummeted, the Government of National Unity—the SPLM and the NCP—agreed to hoard oil until the prices jettisoned before selling it. Since then, the economic crisis, inter alia, hampered the soaring of oil prices; in response, Sudan did not sell its oil which also meant no or less flow of hard currency into the country, thereby, engendering the current fiscal stagnation: a cut back of government activities in the north and a depleted government coffer in the south.
In quest to salvage the country from the present economic turmoil, the peace partners, after a series of negotiations discern the most effective, urgent and expedient way out of this quagmire is to borrow money. While the peace partners concur on borrowing they however differ on who the lender should be. Because of the American sanctions on Sudan and the ubiquity in Khartoum that there is a western conspiracy against the Arab world, the NCP has ruled out the idea of borrowing from any western country and instead proposed China. On the other hand, the SPLM has vehemently renounced the option of borrowing from China in light of the fact that it would taint its relations with the west, since borrowing of money would have certain strings attached to it, which to a larger extent, are favourable to the lender. In this case China, a purely communist country by western standards, will exert its influence via trade instruments, hence, encroaching on Western sphere of influence—southern Sudan, and a consequence of that would be political and diplomatic severance with the west—a loss the SPLM cannot afford to incur.
Still in pursuance of solving the problem, yet still lacking unanimity, the NCP has once again drafted another proposal, this time, they suggest borrowing from the Arab Countries. However, given the fact that the current economic crisis is not regional but rather cosmic in nature, then, by inference, it would be coherent to ascertain that all countries are economically hurting with the difference amongst them being a matter of degree, as such any country’s munificence to help another country, especially during such economic times, would not stem out of authentic magnanimity, but rather, out of long-term geo-politico, strategic interests. Thus, the context in which transactions is carried out has to been understood, as some, if not all, may have grave consequences for Sudan, this is much less with the northern part, but, more so with the southern part of the country which aspires to be a nation.
Ramifications
The SPLM after signing the CPA has become a legitimate opposition party with a high probability of ruling the Sudan. On the other hand, the NCP—a party whose main concerned is regime survival—since its usurpation of power has never faced stifled opposition of this magnitude, thus, for them (NCP), an essential part of their grand strategy is to squelch the fret posed by the SPLM. Since, this threat, unlike those before it, cannot be realized through the use of force, the NCP is tacitly using its ‘soft-power’ to mollify the opposition in the south, not by physically eroding the movement, but rather, by forming what is known as a ‘clientele opposition or regime’ in the south. The NCP unequivocally understands that it cannot unilaterally achieve this seismic ambition; therefore, their plan is to rely on the Arab bloc to advance and regulate it through the prospective loans programme.
The south, apart from its national share of revenue, has boosted its developmental revenue from the multi-donor trust fund—the pledges made by different countries at the 2005 Oslo Donors Conference, but since the global crisis hit, that source of income seems to be running dry. During the third and final debate in last year’s U.S. presidential campaign, when the candidates were asked by the moderator, ABC’s Tom Brokaw, how the global financial crisis would impact their presidency knowing one of them was bound to be the 44th President of the U.S., Barack Obama, the incumbent president of the U.S, then a Senator, responded, “it will affect the amount of aid we (U.S) give to foreign countries,” therefore, contextualizing this claim against the back-drop of the financial crisis—which is global in nature—then in terms of honouring pledges, other countries will follow suite. Much more importantly, however, these assertions do not only justify but also explain the deficiency as well as the ebbing in the formerly made pledges for the reconstruction and rebuilding of south Sudan, especially the shortages of funds provided by USAID. The corollary of a reduction in foreign aid assistance compounding with lack of oil revenues has been a crippled economy in the south.
The Solution
Prior to the ICC arrest warrant on President Bashir, there were speculations that an indictment against the sitting head of state would simultaneously frustrate the peace agreement in the south and aggravate the dire humanitarian situation in Darfur. The regime in Khartoum noticed it and took advantage of the current economic situation to prove the critics right as much as scoring a political goal by not only correlating but also linking the ICC arrest warrant to a deteriorating domestic situation. So far, the regime’s prescription of making a connection of the two mutually exclusive variables is arguably quasi-successful; the only problem is that, it’s a political move that does not solve the economic plight nor the ICC imbroglio.
In order to remedy the situation, the SPLM—a major player in Sudanese politics—has to preserve its integrity and credibility by immediately doing the following in tandem. Since aid is channelled through humanitarian agencies, the movement, at the political level, has to beseech its peace partner to immediately rescind its decision to kick out the NGO’s operating in Darfur and at the same time use the right means at its disposal to prevent any further attempts to send out more humanitarian organizations as anticipated. At an economic level, the movement has to coax its peace partner into selling the oil at the current market prices, but since that won’t generate their projected budgets, the deficit has to be made up for by exceeding the normal output—in other words maximize production. Critics however contend that the option is depletive. However, given the fact that, the current global crisis are a result of wrong choices and failed policies that were put to work over a long period of time, then getting out of the predicament will also take time, and as such, laissez faire is not an option for GoSS, as that would euphemistically anticipate its collapse, and by extension, the moribund partnership. In other words, GoSS has to buy time for the world’s economy to make a mild if not full recovery before it can resume to its normal spending habits or political tactics.
Lessons Learnt
To any government, any systemic misnomer, presents a learning opportunity, and the current financial crisis will offer such an opportunity for Sudan in general and GoSS in particular. However, before GoSS can learn what to do in case such an event recurs, it will have to figure an exit strategy from the current malignancy.
But, how exactly does GoSS exit?
Since the economic crisis facing GoSS aren’t of its own making but rather of an international character, it will have to align its domestic remedy to that of the world. On a recent appearance on the tonight show with Jay Leno, President Obama, when asked when to expect a financial recovery, his response was, “ the financial melt-down is not a consequence of two or three months wrong doing, it was much more than that, it was a series of failed policies and decisions that were practiced for a long time,” he further added that “it took us a long time to get here and it will take us a long time to get out of it.” The statements were clearly asking the American people to be patient, and since recovery will take time, as such GoSS will have to improvise a couple of strategies that will be simultaneously enforced; but above all, it has to avoid collapsing by providing funds to its dilapidated institutions so as to buy time, and the only way to do this is by using its “soft-power” to persuade their peace partner to sale the hoarded oil for the current market price, but since that will not be commensurate with their projected budget, they will have to increase local oil production, at least in the short term.
Once the world economy recovers and their share of revenue becomes pristine, then, the next step is to adopt a policy akin to the one the World Bank uses to avert any abrupt global economic glitches. Under the above policy, the world banks asks countries around the world to set aside a specific amount of money in hard currency, that money is used as a back up in case of any fluctuation in interest rates, or, in case a fiscal spasm occurs. In the same manner, GoSS has to set aside funds from the budget of each state put them in its coffers in case any domestic abruption transpires.
The financial crisis has profoundly affected the daily operations of GoSS to the point if not hastily resolved threatens the eventual collapse of GoSS and a disintegration of the Government of National Unity (GoNU). Thus, it’s imperative that all policy makers treat this matter as a national security issue because it certainly is.
Nyuol Justin Yaac is the author of the upcoming Biography, Dr. Justin Yaac: The Price of Freedom, he can be reached at [email protected]