Return to North-South Sudan war will cost over $100bn: activists
March 29, 2012 (JUBA) – If recent large scale clashes between South Sudan and Sudan trigger a return to war, it would cause loses of $100 billion to the region in addition to incalculable human costs, a coalition of African and Arab civil society organisations have warned.
Newly independent South Sudan on Tuesday accused the Sudan Armed Forces (SAF) of bombing oilfields in Unity State, a day after both armies clashed near the oil-rich region of Heglig, in South Kordofan State north of the disputed border. Both countries claim the area.
An estimated $50 billion, according the coalition’s findings, could be lost in gross domestic product (GDP) for both countries combined, while neighbouring countries could lose $25 billion of GDP, in addition to another $30 billion in peacekeeping and humanitarian costs to the international community.
Both the Arab League and the African Union (AU) are due to meet in Baghdad, Iraq and Addis Ababa, Ethiopia respectively, with issues on Sudan and South Sudan high on the agenda.
“This is the moment for African and Arab leaders to call upon their Sudanese and South Sudanese counterparts to desist from their deadly path and recommit to the peaceful resolution of their unfinished business as a matter of the utmost urgency,” said Haggag Nayel, President of the Arab Coalition for Darfur.
Significant issues have remained unresolved since South Sudan’s independence in July last year, including oil, citizenship, borders, debt and the status of contested areas such as Abyei.
Just before the clashes erupted on Monday a new tone appeared to have been struck, with Sudan’s President Omar Hassan Al-Bashir due to visit Juba 3 April to sign deals on citizenship and borders.
The fighting has been a major setback with Sudan announcing that Bashir would no longer make the trip. However, negotiators from both sides will reconvene their African Union-mediated talks in Addis Ababa in an attempt to resolve the conflict in short term and find solution to the longer term fallout of South Sudan’s independence.
Edmund Yakani, the program coordinator for the Community Empowerment for Progress Organization (CEPO) urged both the Arab League and AU to coordinate efforts to “press Khartoum and Juba to take the path to peace rather than risk the devastating cost of war.”
With oil revenues supporting 98 percent of the South Sudan’s budget, the report argues that any further conflict is likely to deprive the South Sudanese government of much-needed revenue and negatively impact the economy and agricultural production.
South Sudan halted oil production in January after Sudan confiscated millions of dollars worth of oil it said was taken in lieu of Juba paying appropriate transit and refinery costs. The only way landlocked South Sudan can export its oil is through northern pipelines to the Red Sea.
Juba is considering building an alternative pipeline through East Africa and has announced it will export some oil by truck until the matter is resolved. Stopping production as been described a economic suicide by one prominent analyst, Alex de Waal.
Sudan’s economy was already suffering from the loss of 75% the country’s known oil reserves before the stoppage. Khartoum is almost totally reliant on oil exports to bring in the foreign currency needed to prop up its ailing finances.
At the 3 April meeting it was expected that South Sudan’s President Salva Kiir would offer Bashir $2 dollars a barrel to export southern crude: an increase of over a dollar from their initial offer but still way below Khartoum’s demand of $36 a barrel.
“Rather than lead their people to prosperity, Presidents Bashir and Kiir appear to be turning their backs on peace and choosing the path to war. This is a losing strategy – for the people of the two Sudans and their neighbors,” said Osman Hummaida, the executive director, African Centre for Justice and Peace Studies.
He added, “Khartoum and Juba must be pressed to reconsider the costs of the path they’re pursuing, for the sake of their people and the wider region.”
The report also predicts that the anticipated overall cost would be particularly grave for Sudan and South Sudan’s neighbours, reportedly amounting to 34 percent of one year’s GDP over a 10 year period.
Both Kenya and Ethiopia, it says, could potentially lose over $1billion per year. The two countries received large numbers of refugees as a result of the north-south civil war that lasted from 1983 until a peace deal in 2005 gave South Sudan the right to self determination.
“This report demonstrates the high cost of conflict. It implies that domestic, regional and international parties should be asking – ‘Are we doing enough to avoid a war that might cost over US$100 billion and ruin countless lives’?” said Matthew Bell, director of the London-based Frontier Economics Limited a risk analysis consultancy.
Meanwhile the civil society coalition urged both Sudan and South Sudan to heed to the recent AU and UN Security Council (UNSC) demands that both nations work together with the mediation efforts of the African Union High-Level Implementation Panel (AUHIP) to peacefully and comprehensively resolve all their outstanding issues.
(ST)