North-South Sudan economic war will not take prisoners

By John A. Akec

If you think there are ethics to guide the current economic war that is taking shape between the Republic of Sudan and the newly independent South Sudan, be ready to be disappointed. As far as Sudan government is concerned, and in the words of its finance minister Ali Mahmud, his government is ready to do whatever it takes to protect North Sudan economy (Sudani, 12 July 2011, Issue 1992). Literally, that is what Sudan government has embarked on by fighting South Sudan economically hands off the glove, hitting hard under the belt, and taking no prisoners following the pattern of the 22-year war conflict that was waged against them by Sudan Liberation Army (SPLA) in the South and other areas of the North, a war that eventually led to separation of the South from the rest of the country on 9th July 2011.
What it is that the North is doing economically to the South that can be depicted in such harsh terms? And what has the new nation done to engender such an angry response from their erstwhile protagonists? Could anything have been done differently to avoid the economic war? And what kind of loss or gains we expect each party is going to incur in this unfortunate conflict? There are no easy answers.

How North Sudan is Waging its Economic War against South Sudan?

A few months in run up to South Sudan independence, the government in Khartoum stopped transportation of fuel and food items from the North to the South. Prices of the fuel rocketed in the South. People parked their cars in their homes and walked to work or risked spending long hours in queues to get a few gallons of petrol for arm and a leg. That fuel came from Kenya and Uganda. Then came the mass relief of Sudanese of Southern origin from the army and civil service in the North and ordering private sector employers to follow suite, a month ahead of declaration of South Sudan independence; a move that was roundly condemned by a wide spectrum of Northern Sudanese civil society which regarded it as inhumane and an attempt to export mass unemployment to the South.

In air travel, luck or coincidence was the ally of Khartoum government. The only 2 Fokker aircrafts owned by Feeder Airline were grounded by a manufacturer order, warning of faulty fog detection system. This is the only South Sudan based passenger-airliner connecting Khartoum and South Sudan main cities. Khartoum aviation authorities also refused to grant landing permit in Khartoum International Airport to Feeder's new Boeing aircraft. That gave the Northern airliners a monopoly of air travel business between Khartoum and South Sudan. Airfares tripled beyond what many Southerners can afford.

A few days before the declaration of South Sudan independence, all accounts of South Sudanese institutions with central bank were frozen. The electronic banking system used by the Bank of South Sudan (BOSS) and ministry of Finance in the South and the Central bank in Khartoum whose server was maintained in Khartoum was closed down, making it impossible to move funds between BOSS and its branches and between BOSS and other commercial banks in South Sudan or anywhere in the world. Then North launched its new currency barely two days after South Sudan launch of its currency and declaring as illegal tender the 2 billons worth of Sudanese pounds currently circulating in the South, a move that will cost South Sudan US$ 700 million. Finally, the Khartoum government asked Juba to pay US 32 for every barrel of crude oil transported through their pipeline, the highest ever charge in the world for rendering similar service, according to South Sudan officials.

What has South Sudan committed against Khartoum to merit this severe punishment?
According to leading figures in Sudan ruling party, the National Congress Party (NCP), South Sudan government is doing everything it could to politically destabilize the North, although they would rarely admit publicly that such sentiments are behind their economic furry against the world's newest nation.

Putting aside the unresolved issues over border demarcation and contested Abyei area, the government of South Sudan is being accused by Khartoum of supporting the recent armed insurgency in South Kordofan with potential rebellion in Blue Nile State, and extending help to Darfur's armed movements. The statement by the President of South Sudan, Salva Kiir Mayardit, in his independence-day speech that he 'will not forget the people of South Kordofan, Blue Nile, and Darfur, was interpreted in the North as a public confession to interfere in Sudan internal affairs.

Worst, South Sudan is seen by the North as the linchpin of the West in the 'war' against Khartoum regime which the West has long accused of committing crimes against humanity in Darfur and possibly in South Kordofan. Recently, the NCP stalwart and presidential assistant, Nafi Ali Nafi, warned the South Sudan government to "distant itself from the West if they dream of building any cooperative relations with the North." Read economic cooperation.

The Road Not Taken
South Sudan had six years to insulate itself from impacts of North economic embargo, or at least minimize such impacts. However, it would seem that no one saw it coming, or rather there are countless things that could have been done and they haven’t. Furthermore, South Sudan should try to be seen to play positive influence in Kordofan, Blue Nile, and Darfur- difficult yet worth trying. On their part, the Khartoum government should reach a fair deal with armed movements in South Kordofan, Blue Nile and Darfur, a settlement that is not less brave than the Comprehensive Peace Agreement (CPA) that successfully brought relative peace after 22 years of conflict.

Failing that, the Khartoum will continue to wage its brutal economic embargo on South Sudan, which will suffer greatly in short-term. However, in the long run, Khartoum risks provoking political uprising if it is seen to be incapable of achieving peace in the 3 areas as well as failing to forge beneficial relations with South Sudan.