Tag Archives: South Sudan

Growing Pains or Insurmountable Odds?

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South Sudan just successfully hosted one of the largest events in the country’s short two-year history. On December 4 and 5 an impressively diverse crowd of potential investors and business owners from more than 60 countries came together in the capital Juba for the South Sudan Investment Conference, titled “Investment for Economic Diversification and Prosperity.” With more than 800 people registered to attend the two-day event, and at least 500 actually in attendance, observers and participants alike were relatively pleased that the event was carried out with only a few hiccups.

Logistically, it was just shy of a miracle. With only one major paved road in the entire country, a nascent hospitality and service industry, and a lack of local transportation options, it is noteworthy that an event of this magnitude even took place.

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Two Years In, the World’s Newest Country is Growing Up

 

Following on the heels of the United States’ own Independence celebrations, the world’s newest country has just celebrated its 2nd birthday. On July 9, 2013, the people of South Sudan, with much fanfare, ushered in the second anniversary of their independence from Sudan.

The excitement level resembles that shown in 2011 during the referendum that led to South Sudan’s independence. For example, Sebit William of Miraya Radio reported on his program that a 65-year old man from Renk in Upper Nile State sold everything he had to come to Juba (the country’s capital) to celebrate the anniversary with his children.

However, at this time last year, the South Sudanese were more apprehensive, than celebratory – likely due to contentious disputes with our neighbor to the north over oil, which led to a complete shutdown of oil flows, halting the country’s main source of income. Leaders and citizens alike were not sure of the economic survival of the new state. Now in 2013, with the recent resumption of oil flows, many are hopeful about the possibilities for economic growth for the country. Additionally, other signs of progress are contributing to an unprecedented feeling of hope. While most of the lofty initial expectations of the South Sudanese have tempered with the reality of the long road ahead, there are still steps forward.

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Sudan’s Arab spring is really hot

Social media provided a continuous flow of updates about the government’s crackdowns on peaceful demonstrators, news about detainees, and maps of the location of the scattered protests. Just as in Egypt, Tunisia, and now Syria, activists in Sudan are using these online tools not only to coordinate their own activities, but also in hopes of drawing the attention of the wider world.

Interestingly, despite the fact that Sudan is a very poor country with nearly half the population under the poverty line, 10 percent still had access to the Internet as of 2008. It is estimated that this proportion has doubled in the last four years, and the country may now have as many as 8 million regular Internet users.

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Beating the Drums of War and the Latest Oil Conflict in Africa

A worker inspects a damaged oil pump in Heglig. (Photo: Reuters/Mohamed Nureldin Abdallah)

Sudan and South Sudan took one step back from an all out war on Friday when South Sudanese President, Salva Kiir, agreed to withdraw military forces from the contested oil-producing town of Heglig, which was occupied by South Sudanese forces after fighting on April 3rd. Heglig is claimed by both Sudan and South Sudan and remains one of the many unresolved issues since South Sudan became the newest independent country in June 2011.

The dispute over Heglig is part of a larger conflict between the two countries over borders, as well as other unresolved issues such as the transportation of oil from South Sudan to the Port of sudan, the status of the 500,000 South Sudanese living in the north, claims of state support to ethnic militias by both countries, and, most recently, Sudan’s aerial bombardment of several towns inside South Sudan.

There are no winners in war — just different levels of losers. The latest flare up should not be considered an isolated event but rather part of a several decades long civil war, now involving two independent countries. However, the current dispute is somewhat different in that both sides are attempting to ensure maximum economic destruction. This conflict is all about oil and the potential revenues it generates in an otherwise poor and underdeveloped part of the continent.

The latest incident started in January 2012 when South Sudan completely shut down oil production after an ongoing dispute with Sudan over the cost of transporting the crude from landlocked South Sudan to the Port of Sudan in the north via pipelines. Sudan was demanding $35 a barrel — more than a third of the final price on the world market  – while independent experts suggest the fee should be between 50 cents and $3.50. In addition, it became public knowledge that Sudan was clandestinely siphoning off oil for their own refineries, which the Sudanese government has since argued was taken as “payment in kind” for its pipeline services. Sudan and its southern neighbor have been locked in negotiations over how to split South Sudan’s oil revenues since the Comprehensive Peace Agreement, which dictated a 50/50 revenue split, expired in 2011.

South Sudan’s actions drew popular support at home but are not sustainable over the long term. 98% of South Sudan’s revenues come from the export of oil. The government and Parliament of South Sudan quickly passed an austerity budget. But perhaps austerity is the wrong word — given that there are numerous reports that the government’s budget is 1/3 larger than the previous budget.

Critics of South Sudan’s actions in January, the last time the country cut off its oil exports, often state that the Southern response was not well thought out, but perhaps this was the opening for the SPLA army incursion into Heglig. By taking over Hegling in March, 2012, South Sudan deprived Sudan of 50% of their current oil production of 50,000 barrels of oil per day. Given Sudan’s international isolation and continuing economic deterioration the two sides are trying to resolve their remaining issues through a war of economic attrition.

Part of the key role of the state is to provide for the security, education, and health of its citizens. Although South Sudan’s recent withdrawal of troops is a commendable step towards de-escalating the current conflict, the issues of oil revenues, which both countries are so dependent on, remain unresolved. Neither state can afford or sustain an economic war of attrition and while the international community steps up its efforts to find a peaceful solution, time is not on the side of peace.