U.S. official says cancelling Sudan’s debt a lengthy process
January 12, 2011 (WASHINGTON) – The process of cancelling Sudan’s debt is a complex one and will require several years before it is completed, a U.S. official said today.
The Sudan People Liberation Movement (SPLM) in control of the South is insisting that the North assume the entire $38 billion debt given the amount of destruction in the region which was at the heart of the two decades civil war which formally ended in 2005.
But the ruling National Congress Party (NCP) is arguing that a significant portion of the debt was used for development projects in the South.
In an interview with the Doha-based Al-Jazeera TV last week, Sudanese president Omer Hassan Al-Bashir said that even the debt is split, the North and South will continue to suffer under the burden of payments that are to be made which goes well beyond the capacity of their respective economies.
He said that creditors must make the move to forgive the entire debt to resolve this issue.
However, the U.S. assistant Secretary of State for African affairs Johnnie Carson was quoted as saying by the London based Al-Sharq Al-Awsat that debt relief is not a simple procedure and will require extensive work.
Carson told reporters in a conference call that the first step to tackle this matter is for the North and South to agree on how to allocate the debt among them “then complex international contacts will commence” adding that this will take years.
He gave an example of Liberia which received debt relief and the efforts undertaken to achieve that goal for a country emerging from civil war.
The International Monetary Fund (IMF) puts Sudan’s external debts at about $35.7 billion, of which less than half is the original amount borrowed and the rest is divided between interest and late payment penalties. According to IMF, the figure was projected to have reached $37.8 billion by the end of 2010.
Research fellow Ben Leo and his assistant Ross Thuotte from the Center for Global Development wrote in the Huffington Post this week that the Arab Gulf states of Saudi Arabia and Kuwait own most of Sudan’s debt ($6 billion and $3 billion respectively).
They further revealed that Austria, Denmark, and Belgium collectively hold $4.5 billion of Sudan’s debt. According to their research, most of Sudan’s debt dates back to the days of late president Ga’afar Nimeiry. It grew from $9 billion in 1985 to its current levels.
Sudan has long complained that political discord with the West has prevented it from joining the debt relief program known as the Heavily Indebted Poor Countries (HIPC).
In the last few months Sudan has reached partial debt relief accords with Slovakia ($40 million), China ($6 million) and Brazil for an unspecified amount.
Sudan has approved an austerity package last month to overcome the soaring budget deficit and sharp decline in foreign reserve exchange. The measures led to price increases in a wide array of goods including those subsidized by the government such as sugar and petroleum products.
(ST)