8 July 2011.

On 9^th July 2011, the nation of South Sudan will finally become a State. Having been part of the Republic of Sudan for more than five decades, the South Sudanese population will now have the opportunity to govern and fend for themselves – albeit in a region mired in conflict and uncertainty.

Though immeasurable challenges lie ahead, the people are optimistic.

8 July 2011.

On 9^th July 2011, the nation of South Sudan will finally become a State. Having been part of the Republic of Sudan for more than five decades, the South Sudanese population will now have the opportunity to govern and fend for themselves – albeit in a region mired in conflict and uncertainty.

Though immeasurable challenges lie ahead, the people are optimistic.

“We want to build South Sudan to be the best in the region and the world,” said soon-to-be Vice-President Riek Machar.

[quote]”This is where the centre of Africa is. We will build an airport in South Sudan where South Sudan can be the hub of the African countries and the world just like Dubai and Singapore.”

…There is no reason why we should not be the best of the best in the region and the world. We have resources and we will utilize the resources to benefit our nation.”[/quote]

The past six years has been a long wait for the South Sudanese population. In 2005, leaders from the Khartoum central government of Sudan (representing the north) and the Sudan’s People Liberation Army (representing the south) signed the Naivasha agreement, bringing an end to a decades-long civil war.

As part of the agreement, a referendum was held at the beginning of this year to determine the status of southern Sudan. From January 9^th to the 15^th, 98.83 percent of the southern Sudan population voted to form a new country, the Republic of South Sudan, which will be the 193^rd country inducted into the United Nations.

The new capital city of Juba will be the venue for celebrations estimated to cost around US$90 million. More than 2,000 foreign dignitaries are expected to turn up in Juba, including South African President Jacob Zuma, UN Secretary-General Ban Kim Moon, and several delegates from the US such as Susan Rice and Colin Powell.

But amidst the celebratory mood, some key issues still remain unresolved. Although Sudan’s President Omar Hassan al-Bashir will be at the ceremony on Saturday, his presence belie the fact that disagreements still remain between the soon-to-be separated nations and are unlikely to go away anytime soon.

One of the biggest debates between the two nations has been over the contested border region of Abyei. Barely a month ago, Abyei was the scene of fresh armed clashes with both parties refusing to cede control over the region. Although a referendum for Abyei had been scheduled for the beginning of this year, it has since been postponed indefinitely. As a result, the UN Security Council approved the deployment of a 4,200-strong Ethiopian peacekeeping force to the region in order to monitor the situation.

Another highly volatile region is that of Southern Kordofan. At least 73,000 people have been displaced in recent weeks due to fighting between northern and southern forces, with neither side claiming responsibility. Southern Kordofan will remain in Sudanese control after the split, though pro-southern groups in the region have been in constant conflict with the Sudanese government troops.

[quote]”There is no relation between the government in Juba and the SPLA in the Nuba Mountains or anywhere in the north,” said SPLA spokesman Philip Aguer. “If the north attacks them, it will be another situation like Darfur, with the north attacking their own people.”[/quote]

[break]

Sudan and South Sudan: Divided by Conflict, Bound by Oil

 

Territorial issues aside, the biggest source of conflict between the two nations has been in regards to oil receipts. Before the split, Sudan was the 31^st largest producer of oil in the world. Sudan’s economy was also highly reliant on oil – with the oil industry contributing to a third of its GDP and employing nearly 80 percent of the labour force.

However, 75 percent of Sudan’s oil reserves laid in the south. Accordingly, the split is likely to have an adverse effect on the Sudanese economy with its oil revenues expected to drop dramatically.

But the Sudanese have a trump card. While the majority of the oil reserves rested in the south, all the pipelines, refineries and other infrastructure required to export the oil lied in the north.

Last week, Sudanese President al-Bashir threatened to shut down all oil pipelines from the south if they refused to pay transit fees. South Sudan responded by announcing plans to open new oil pipeline routes via Kenya and Uganda.

However, any new construction will take years to complete. South Sudan’s Vice-President Machar admits, “We have no other way to export the oil through South Sudan, it is only through the north.”

Therefore, for the moment at least, both economies are intrinsically tied to each other.

[quote]“Both parties are perfectly set up to sabotage the other one, but also at the cost of sabotaging themselves,” said Norway’s Deputy Foreign Minister Espen Barth Eide, who is currently advising both nations on oil.[/quote] [quote]”We thought that as neighbours we would be the best friends. We need them and they need us,” said soon-to-be South Sudan President Salva Kiir. [/quote]

But oil is not the only issue that requires a united effort. Citizenship for both countries is another topic that has been breached in previous discussions. Currently, more southerners live in the north as compared to the reverse situation.

“For the southerners that want to work in the private sector in the north, they will have to get permission and residency permits,”said Sudan’s top presidential adviser Nafie Ali Nafie.

Both nations have also agreed to have a prolonged transition period whereby individuals can travel across the borders without being official citizens of the respective countries.

The nine-month long transition period is meant to ensure that no citizen of either country becomes “stateless”, while southerners living in the north and northerners in the south will be able “to settle their situations.”

The two nations must also decide on how to split its current foreign debt. In 2011, Sudan’s total external debt amounted to US$37.98 billion. Exactly how this would be divided remains unclear.

[break]

What Lies Ahead

What remains certain though is that the split will ultimately leave both countries in equally vulnerable positions. On the one hand, Sudan is losing nearly a quarter of its physical size as well as roughly 8 million people from its population.

“Sudan’s new map has been delivered to all the embassies, consulates, airports and governmental institutions and will be placed up on the morning of July 9 after the declaration of the state of South Sudan,” said Sanaa al-Awad, of the Ministry of Information.

[quote]”We are, sadly, at the end of the old entity of Sudan and now face a new beginning.”[/quote]

Sudan, which was officially the largest country in Africa and the Arab World, will also no longer have borders with Uganda, Kenya and Congo while its borders with Ethiopia and the Central African Republic will decrease significantly.

South Sudan, on the other hand, faces the challenge of building a brand new state and a modern economy from scratch. The newly formed State is one of the poorest countries in the world, with little to no infrastructure in nearly every aspect of social and economic development.

“The south is very fragile,” said economic researcher Mohamed Kabaj. 83 percent of the population live in rural conditions, 73 percent are illiterate, 51 percent live below the poverty line and 78 percent of households depend on crop farming or animal husbandry as their primary source of income.

The country has massive growth potential particularly in the agriculture and oil industries, but these will not be able to ensure the nation’s survival without foreign aid to develop modern infrastructure.

Yet, even this is tentative. According to Norway’s Deputy Foreign Minister Eide, South Sudan “should not expect to be bailed out by donors. They have good friends but you can’t run the economy on development aid.”

Similarly, the country will not be able to run on good intentions. South Sudan’s Vice-President claims that the country would raise “US$500 billion from private investments in the next 5 years” are wildly exaggerated, just as his belief that the country will be able to compare to countries like Dubai and Singapore in a relatively short period.

But after the bloodshed and suffering that the nation has gone through in the past five decades, perhaps a little optimism is necessary to keep the country going. More than a million displaced South Sudanese from across the globe have returned to their homeland while another million more wait to make the same journey and start the rebuilding process.

Rech Chul, an 18-year-old South Sudanese who was born in Sudan’s capital of Khatroum told the China Daily that despite the potential hardship and challenges ahead, he was still optimistic about the country’s future.

[quote]“Because this is the motherland”, he said.[/quote]

Jerome Ganago, 55, is also determined to make the best of the situation.

[quote]“We are very confident about our new country. If it is not good, I’ll make it good myself.”[/quote]

Raymond Tham,

EconomyWatch.com