The two Sudans-A deal that is only half done
Aug 11th 2012, 15:16 by The Economist online | NAIROBI
THE Sudans may never fully agree to the terms of divorce. And it is unclear
whether a provisional settlement to share oil resources will be enough, at
least for a while, to stop the rowing parties from trying to murder each
other. The pair went to the brink of war earlier this year after a quarrel
over how much the new state of South Sudan should pay to export its oil via
the north's pipelines ended with production being shut down altogether.
The result led to inflation and austerity north of the border and
near-bankruptcy in the south. Under intense foreign pressure, talks brokered
by the African Union (AU) have brought about a compromise which, it is
claimed, will see the oil flowing again "in a matter of weeks".
Splitting what was Africa's largest country in half left most of the oil in
the landlocked south and all of the means to get it to market in the hands
of the north. The north's government in Khartoum demanded compensation for
letting the south, with its oil, secede. So it imposed inflated transit fees
for the use of its ports and pipelines. Its counterpart in Juba, the new
state's capital, thereupon preferred to beggar itself than be held to
ransom. In January it unexpectedly turned off the spigot.
Under a deal struck in Addis Ababa, Ethiopia's capital and headquarters of
the AU, the south is to pay the north a lump sum of $3 billion over three
years, while transit fees during that period will be waived. The Sudans'
biggest customer, China, will sweeten the deal by telling its oil companies
to pay over the odds to the north. If the south sticks to its side of the
bargain, the American administration will bail it out for the time being and
encourage its Gulf allies, such as Saudi Arabia and Kuwait, to help bankroll
the government in Sudan's Arab north. Hillary Clinton, the American
secretary of state, was recently in Juba, pressing the southerners to accept
a compromise.
Both sides are posing as victims to their foreign backers, while assuring
their home audiences that they have won the day. The southerners say they
will pay the equivalent of an extra $10 a barrel for transit costs, while
the northerners say they are getting an extra $26 a shot.
The conflicting versions show how vulnerable the leaders of both Sudans have
become. President Omar al-Bashir in Khartoum has reassured factions in his
army and ruling party that the deal still depends on getting what they want
over the disputed north-south border. But that issue has been put off until
another summit next month. If a border deal is not reached, the oil deal
could still fall through. And some hardliners in both north and south still
want to up the ante in the hope of forcing regime change on their opponents.
The haggling may have only just begun.
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Received on Sat Aug 11 2012 - 07:38:51 EDT
