Despite Oil Deal, Obstacles to Sudan-South Sudan Reconciliation Remain
By <
http://www.worldpoliticsreview.com/authors/725/brian-dabbs> Brian
Dabbs, on 09 Aug 2012, <
http://www.worldpoliticsreview.com/briefings>
Briefing
With peril looming on both countries' economic horizons, Sudan and South
Sudan brokered a milestone oil-transit agreement over the weekend to the
effusive praise of the international community. The deal represents a
breakthrough after months of heightened tensions.
South Sudan shut down oil production eight months ago over transit cost
disagreements. Juba also accused the Khartoum government of siphoning
southern oil and confiscating shipments in lieu of unpaid transit fees. In
April, the two historical adversaries neared the brink of full-scale border
war after South Sudan temporarily seized Sudan's primary oil production site
in Heglig.
"Now was the time to bring this impasse to a close, for the good of the
people of South Sudan and their aspirations for a better future in the face
of ongoing challenges," U.S. Secretary of State Hillary Clinton said in a
statement released Saturday, as she continued a tour of Africa that brought
her to Juba on Friday. "South Sudan's leaders have risen to the occasion."
Though details on the deal remain murky, South Sudan appears set to pay an
average of $9.48 to export oil through Sudanese pipelines and for partial
use of Sudanese refineries. South Sudan will also transfer roughly $3
billion to Sudan as a one-time compensation for revenue Khartoum lost after
partition. Previously, South Sudan had offered to pay $2 a barrel, while
Sudan was demanding $36.
After the South seceded in 2011 to become the world's newest nation, it
<
http://www.worldpoliticsreview.com/articles/7520/global-insights-next-steps
-in-sudan> claimed roughly 75 percent of Sudanese oil deposits. But the
landlocked South lacks refineries and alternate means of export. Both
countries' economies rely heavily on oil revenue.
Despite the deal's optimistic reception, the two sides now face a host of
additional obstacles before production resumes again. Sudanese President
Omar al-Bashir has repeatedly insisted that issues such as border
demarcation and security arrangements be resolved before an oil transit deal
is finalized. African Union-mediated talks are set to resume on Aug. 26,
according to Sudanese state media.
"All the issues feed together politically. It's all intertwined in terms of
how they're talking," said Dana Wilkins, South Sudan and Sudan oil
governance specialist at Global Witness. "You can't make one deal alone and
set it aside without the risk of modification as other concessions are
made."
The U.N. Security Council had mandated that both governments meet an Aug. 2
deadline to resolve all outstanding issues left over from the 2005
Comprehensive Peace Agreement (CPA) that laid the groundwork for secession.
Though Juba and Khartoum have missed that deadline, the U.N. will likely
encourage both sides to continue negotiations, rather than apply sanctions
or other punitive measures. The AU, led by chief negotiator Thabo Mbeki,
will report back on the status of talks on Sept. 22.
Moreover, South Sudanese oil wells suffered severe damage during the
shutdown process, and technical assessments suggest it will take anywhere
from a few weeks to a year to resume production. The damage has also raised
questions of whether production levels can return to the pre-shutdown level
of 350,000 barrels a day.
But financial incentives may override the myriad hurdles facing both
nations. Since the outset of 2012, both economies have plunged into an
economic abyss. The absence of oil revenue led Sudan to impose austerity
measures in recent months that have brought thousands of protesters to the
streets of Khartoum and other cities across the country, marking the gravest
threat to the Bashir regime in nearly three decades.
Meanwhile, the South Sudanese government generates 98 percent of state
revenue through oil. International financial analysts, backed by
<
http://www.sudantribune.com/IMG/pdf/WB_SS_Analysis.pdf> a World Bank report
(.pdf) that was
<
http://www.sudantribune.com/EXCLUSIVE-South-Sudan-economy-on,42512> leaked
earlier this year, suggest South Sudanese coffers are virtually drying up,
leaving the South's economy in unchartered territory.
"South Sudan is about to run out of money. They need a deal. This is their
only means of hard cash in the short term," said Jon Temin, Sudan program
director at the U.S. Institute of Peace.
The international community has provided Juba with $4 billion in aid since
2005. The U.S., South Sudan's primary benefactor and key ally, earmarked
more than $400 million in assistance for the 2013 fiscal year alone. That
kind of aid should provide some leverage to push Juba toward reconciliation.
However, some critics say Washington has instead shown unconditional support
for the South despite rampant corruption and reports that Juba provides aid
to rebel militias in Sudan.
Nonetheless, foreign governments that have shepherded South Sudan through
its independence transition are reluctant to see that effort go to waste. In
addition, though politically and militarily unstable, the region is
strategically vital. For these reasons, maintaining close ties with Juba
serves the interests of the international community.
"In the Horn of Africa, there is potential for conflict to spill over. It's
a matter of regional security," said Ahmed Soliman, Horn of Africa analyst
at Chatham House. "And you talk about allies in the region. If South Sudan
can build key institutions, it will be able to act as a critical ally."
The Khartoum government has long been considered an international pariah.
Bashir currently faces indictment at the International Criminal Court for
alleged war crimes perpetrated in Darfur. But the international community
recognized this weekend's agreement as a conciliatory gesture. On Sunday,
Sudan also agreed to allow aid into the South Kordofan and Blue Nile
regions, where an insurgency is raging.
This weekend's deal raises hopes for reconciliation. But, like past accords,
the days and weeks to come will demonstrate how real those prospects are.
"In negotiations between Sudan and South Sudan, it always comes down to the
last minute or after the last minute," said Temin. "And even when the deal
is brokered, other issues remain. This is following the pattern."
The two countries' shared oil economy is emblematic of an inextricable
relationship that will continue to play a significant role in both sides'
wellbeing. Sudanese and South Sudanese citizens, who for decades have faced
endemic conflict, are hoping the oil breakthrough is a first step toward
easing a legacy of suffering.
Brian Dabbs is a journalist based in Nairobi. His work has appeared in the
Atlantic, the New York Times and Think Africa Press, among other
publications.
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Received on Thu Aug 09 2012 - 18:24:33 EDT
