---------- Forwarded message ---------- From: John Ashworth <[email protected]> Date: Tue, 2 Aug 2011 14:03:10 +0300 Subject: [sudan-john-ashworth] Fw: Republic of Sudan's self-inflicted distress To: Group <[email protected]>
1. Sudan's self-inflicted economic distress The Khartoum regime's mismanagement, cronyism, profligate military expenditure and exorbitant self-enrichment has brought economic disaster to Sudan Posted by Eric Reeves Monday 1 August 2011 07.00 BST guardian.co.uk To understand the obstacles the nascent Republic of South Sudan will face in the coming months and years, we must understand the intense economic distress currently being experienced in north Sudan after more than two decades of mismanagement, cronyism, profligate military expenditure and exorbitant self-enrichment by the National Islamic Front/National Congress party regime. Khartoum's recent military actions in Abyei and Southern Kordofan, its support for destabilising militia groups in the south, as well as its bombing of southern territory can't be understood outside the context of what has already occurred and what is impending in the economy of the north. It is insufficiently appreciated how badly this economy is performing, even before enduring what finance ministry officials acknowledge will be a 37% decline in oil revenues ($2bn-$3bn annually) once the full effects of southern secession are felt (most independent economists put the figure lower, but still a huge loss of revenue). The IMF has warned of a "permanent shock" to the economy. This comes even as inflation is 15% and rising; foreign exchange reserves are extremely low, hindering international trade; subsidies for oil and sugar have been cut, prompting a number of protests; and more painful cuts are coming. At the same time, the regime acknowledges the need for much higher taxes. In a desperate short-term measure, Khartoum has engaged in selling farmland to Arab and Asian investors, a terrible decision from the standpoint of both national economic development and food security. Unsurprisingly, the Sudanese pound has experienced a de facto devaluation of about 25% , as the money supply has grown at an unsustainable rate. Growth in the economy has shrunk dramatically, and gives signs of shrinking further. Gone are the days when foreign journalists marvelled at the cafe bars that were gently misted in various spots in upscale Khartoum and Omdurman. But lurking behind this disastrous news is the biggest overhang on the economy: $38bn in external debt at the end of 2010 (around $30bn in the form of arrears, accrued largely under the NIF/NCP). Even in its best years, the oil-dependent economy of the north could not begin to service, let alone repay, this gigantic debt. It will continue to drag the economy downwards unless the IMF and World Bank structure some form of debt relief. But this is where the regime's military behaviour along the border regions collides with its economic prospects. So far the US and Europeans have offered only tepid criticism of Khartoum for its military seizure of the contested Abyei region and its increasingly genocidal military campaign in Southern Kordofan. Even so, it will be politically impossible for the Obama administration to remove Khartoum from the state department list of terrorism-sponsoring nations while ethnically targeted violence escalates in Southern Kordofan. It was foolish of the Obama administration to make the issue of terrorism one for negotiation: Khartoum either does or does not support terrorism, and there is considerable evidence that it still does, chiefly by funnelling Iranian weapons to Hamas. But the terms of the "deal" do not include countenancing what has occurred in Abyei, Southern Kordofan and other contested border areas (leave aside the relentless suffering and destruction in Darfur). The US also openly promised to assist Khartoum with debt relief if it fulfills its obligations under the comprehensive peace agreement. But Khartoum is far from fulfilling a range of obligations, leaving even an expedient Obama administration with little wiggle room, given the seriousness with which Sudan is taken by a substantial part of his key political constituency. But without debt relief, economic problems that are already deeply threatening become insoluble. Some in the regime surely understand this, and so the decision to adopt the current militaristic and threatening posture towards South Sudan – just weeks after independence – represents a triumph of the worst impulses within the regime: nationalism, Islamism, embarrassment over "losing the south", contempt for the international community, and a belief that more of the southern oilfields can be brought by force into the north (around 75% of Sudan's proven oil reserves lie in the south). It is this attitude that has led to the campaign of economic attrition Khartoum is waging against the south, including a "currency war", one that may prove extremely costly to both economies as the two new currencies try to establish an international exchange rate. These calculations are disastrous, and in the short run can only diminish oil revenues further: the south will fight with great determination to preserve its territorial integrity, however resolutely it has resisted provocation so far. Khartoum has only one rational economic decision to make under the circumstances, even from a purely survivalist perspective. But though always capable of a vicious low cunning, Khartoum's serial génocidaires have never been considered men of reason. The consequences of their worldview are now conspicuously on display, and nowhere more so than in the disaster towards which the northern economy is moving. http://www.guardian.co.uk/global-development/poverty-matters/2011/aug/01/sudan-economic-distress-khartoum END1 2. Sudan’s Taha says country to apply Shariah, warns Al-Bashir’s detractors July 31, 2011 (KHARTOUM) – Sudan’s vice-president Ali Osman Mohamed Taha has revealed preparations to enforce Islamic Shari’ah laws in the rump of the country after South Sudan broke away last month. Taha, addressing a public rally in Al-Hilaliah area south of the capital Khartoum on Saturday afternoon, said that Islamic laws would be applied in the country, especially against those rejecting it and detractors of President Al-Bashir. “We will cleave with a sword those who have overstepped their limits and acted insolently against the Sudanese people, their president or Shari’3ah,” Taha told the crowd. He warned against “plots being hatched by Sudan’s ambushers,” threatening them with defeat. The Vice-president went on to downplay the impact of South Sudan secession, saying that the split makes Sudan’s stronger not weaker. It is not clear who the vice-president meant to threaten but Taha’s highly rhetorical and strongly worded statements mark a shift from his normally mild statements. His call for applying Shar’iah coincides with growing calls by conservative and Muslim fundamentalist groups for the establishment of an Islamic constitution in the country following the split of South Sudan. (ST) END2 3. Sudan’s NCP downplays opposition threat of overthrowing government July 31, 2011 (KHARTOUM) – The ruling National Congress Party (NCP) in Sudan dismissed threats made by opposition parties that it will pursue regime change given what it sees as the illegitimacy of the current government. The chairman of the National Consensus Forces, an alliance of 11 opposition parties, Farouk Abu Essa, told reporters after a meeting of opposition leadership that they agreed on the illegality of the government and the need to work on a comprehensive change through peaceful political means. Essa added that the next stage "will witness the mass mobilization for the objectives that we agreed on". Sudanese opposition assert that following the separation of the South on July 9th, the government in the North has lost its constitutional legitimacy which was triggered by wide scale changes that impact the drivers which brought the National Congress Party (NCP) dominated government to power. But the NCP media officer Ibrahim Ghandour said that law is clear on dealing with armed movements that seek to topple the government. He expressed skepticism over remarks made by the Popular Congress Party (PCP) leader Hassan Al-Turabi in which he hinted at coordination with Darfur rebel groups. Ghandour said that Turabi’s background as lawyer makes him an unlikely candidate to take that route. He called on opposition parties to seek democratic means to reach power stressing that the NCP received its mandate through elections which took place last year. The NCP official hailed the head of the Democratic Unionist Party (DUP) Mohamed Osman al-Mirghani describing him as a "patriotic" man. He said statements attributed to al-Mirghani in which he said that he does not intend to participate in the upcoming government will be taken seriously only if conveyed formally to the NCP. The ruling party headed by President Omer Hassan Al-Bashir is holding talks with opposition parties namely the DUP and the National Umma Party (NUP) to convince them to join the new cabinet. But the progress of the talks remain unclear. In a related issue, Bashir has urged all parties and all components of Sudanese society to also submit their views on how the new constitution should be crafted. The NCP has made it clear that post-secession Sudan will be governed by Islamic law and that Arabic language will be the state’s official language. (ST) END3 4. NCP to Impose Law against Supporters of Armed Groups Posted on Monday, August 01 @ 00:15:00 UTC by admin Sudan Vision By: Al Sammani Awadallah Khartoum – National parties that deal with Darfur armed groups for the purpose of toppling the government will face strict legal measures, the National Congress Party (NCP) warned Sunday. Information Secretary of the party Ibrahim Ghandour told the press that General Secretary of the Popular Congress Party PCP Hassan Al Turabi is a law man, adding that his recent statements revealing his communications with Darfur armed groups for the purpose of overthrowing current regime incriminate him before the law. He added that Turabi's statements downplaying the participation of Mohammad Osman Al Merghani can be taken as media consumption, pointing out that the matter is left to direct meeting between Al Merghani and NCP leadership. Ghandour confirmed that Al Merghani is a national figure, expressing his party's confidence on him, adding that NCP has no reasonable assumption to get skeptical towards his national stances. Further, Ghandour confirmed to press that measures by opposing parties aiming at toppling government bear nothing new, affirming that current government gained legitimacy on populations' will, advising those who look forwards to overthrowing government to prepare for the coming elections a shift from sticking to irrational stances. Ghandour told press that no time has been identified for the meeting between Al Bashir and Al Mahadi, pointing out previous continuous meeting between the two leaders conducted within the framework of relations between the two parties. Commenting on current negotiations between north and south in Addis Ababa, Ghandour said that the negotiations were decided to go ahead for two additional days to complete issues that have been negotiated prior to official announcement of south secession, confirming continuation of negotiations so as to reach for comprehensive resolutions. He affirmed that NCP is adopting reconciliatory discourse, expressing party's desire to reach for resolutions preserving human rights. He cleared that government is committed not to relinquish of the amount previously decided on oil transit through north, ascribing government's stance to insertion of oil transit as part of government budget. He said that dialogue on the issue hasn't been closed yet. http://www.sudanvisiondaily.com/modules.php?name=News&file=article&sid=78801 END4 5. Sudan denies making concessions on oil transit fees July 31, 2011 (KHARTOUM) – The Sudanese government on Sunday denied statements made by a senior official in South Sudan yesterday in which he claimed that Khartoum withdrew the rate of $22.8 per barrel it proposed on oil coming through its pipelines from its Southern neighbor. The landlocked Republic of South Sudan (RSS) called the fee put forward by Khartoum as "daylight robbery" and threatened to seek other venues for exporting its oil. Pagan Amum, minister of Peace and chief negotiator of RSS, said that in talks with Sudan in Addis Ababa it was agreed that the fee of $22.5 would be dropped and pricing in accordance with international norms would be used. "This discussion brought to an end the attempt to impose discriminatory surcharges by the government of Khartoum, who announced they would impose $22.8 per barrel. They have withdrawn officially this position," Amum said. "We will be paying pipeline fees...and also we will be paying transit fees that are within the international practices and standards," he added. But the government sponsored Sudanese Media Center (SMC) website quoted state minister of finance and head of Khartoum’s delegation for economic negotiations Al-Fatih Ali al-Sideeg as saying that no such understanding was reached on transit fees and that discussions did not even tackle the issue of renting pipelines saying that the latter is to be determined by the oil ministry and RSS. The Sudanese deputy governor of the Central bank Badr al-Deen Abbas also described Amum’s remarks as "incorrect". The pro-government al-Rayaam newspaper quoted unnamed sources as saying that the economic talks with RSS in Ethiopia have collapsed. The sources said that RSS refused proposals tabled by head of African Union (AU) panel Thabo Mbeki and stuck to its position on fees charged for using Sudan’s pipelines. Sudan already built in the transit fees into the budget and estimated that it will generate $2.6 billion annually at the rate of $22.5 per barrel the South exports. South Sudan became an independent state earlier this month following its citizens’ overwhelming vote in favor of secession from the North last January. Both sides however, have failed to resolve a wide array of issues that could prove toxic in their future relationship. In particular the oil-rich nation could not agree with Sudan on how much fees should be assessed for exporting crude through its pipelines. (ST) END5 ______________________ John Ashworth Sudan Advisor [email protected] +254 725 926 297 (Kenya mobile) +249 919 695 362 (Sudan mobile) +27 82 853 3556 (South Africa mobile) +44 750 304 1790 (UK/international) +88 216 4334 0735 (Thuraya satphone) PO Box 52002 - 00200, Nairobi, Kenya This is a personal e-mail address and the contents do not necessarily reflect the views of any organisation -- The content of this message does not necessarily reflect John Ashworth's views. Unless explicitly stated otherwise, John Ashworth is not the author of the content and the source is always cited. You received this message because you are subscribed to the Google Groups "sudan-john-ashworth" group. 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