Sudan's Delicate Balance - The Libyan Report

Sudan's Delicate Balance

A revolution overthrow the country's dictator, clearing the way for political and economic reform.

SUDAN: VITAL STATISTICS Location: Northeast Africa Neighbors: Egypt, Libya, Chad, Central African Republic, South Sudan, Ethiopia and Eritrea Capital city: Khartoum Population (2019): 43,087,468 Official languages: English and Arabic GDP per capita (2018): US$977.30 GDP growth (2018): —2.3% Inflation (2017): 63.29% Currency: Sudanese pound Investment promotion agency: Ministry of Investment Investment incentives available: Tax exemptions Ease of Doing Business rank (2018): 162 Corruption Perceptions Index rank (2018): 172 Political risks: Whether the transitional government can stabilize the country and hold elections on schedule. Security risks: US government discourages travel due to kidnapping, robbery, terrorism, unrest and armed conflict. Demonstrations can occur without warning. British and Canadian governments strongly advise against travel in several provinces and near the borders with South Sudan and Libya. PROS Strategic importance: coastline on important shipping route Close to Saudi Arabia Strong support from France, Turkey and Netherlands Violence continues in some provinces and on the border with Chad CONS Continuing unrest Floods Huge refugee problem through internal displacement and foreign crises Violence continues in some provinces and on the border with Chad Sources: Aljazeera, Financial Times, Hurriyet Daily News, Inter-national Monetary Fund, Khartoum Star, Libya Observer, Moody’s Investors Service, Reuters, South Sudan News Agency, Statista, Sudan Tribune, Transparency International, UK Foreign Travel Advice, US State Department, World Bank, World Population Review For more information, check out Global Finance's Sudan Economic Report data page.

In September, Sudan took an important step in its attempts to rebuild the country. The transitional coalition government appointed respected former World Bank economist Ibrahim Elbadawi as finance minister. Elbadawi’s substantial curriculum vitae includes stints at the Economic Research Forum; the Economic Policy and Research Center of the Dubai Economic Council; the African Economic Research Consortium; and Sudan’s University of Gezira, as well as many research projects.

The background makes him a logical choice for Sudan, which sorely needs for its transitional government to restore stability after decades of mismanagement, tyranny, corruption, high inflation and shortages of food and fuel. Worsening its economic situation, the country lost much of its oil-drilling revenue when oil-rich South Sudan seceded in 2011.

The current coalition government, consisting of both military and civilian factions, came to power in August, replacing the military junta that had governed after the ouster in April of then-President Omar al-Bashir. He had been charged in 2010 by the International Criminal Court in The Hague with genocide in Darfur.

But cutting off the head can still leave much of the body intact in Sudanese politics. “There are entrenched interests that remain within the government, particularly in the security forces,” says Joshua Meservey, a senior policy analyst for Africa and the Middle East at the Heritage Foundation.

Military forces mounted the April coup as escalating protests threatened to remove al-Bashir, thereby threatening military privileges and business interests—and possible criminal prosecutions of military personnel. “Virtually all elements of the Sudanese security services have been involved in war crimes or criminal activity of one sort or another,” Meservey explains. “They really want to make sure that they are never dragged before The Hague for those crimes.”

The military and the civilian factions have a power-sharing arrangement and a plan for democratic elections in 2022. Yet three years is a long time, and much could happen to derail those elections. In one possible scenario, security forces could work against the civilian movement while paying lip service to the agreement.

The economy does have some strengths, including fertile land and a robust agriculture sector that attracts foreign direct investment from Egypt and Gulf countries. Saudi Arabia and the UAE, which have large-scale commercial links to Sudan, has provided hundreds of millions of dollars to Sudan’s central bank, as well as aid in the form of fuel, wheat and medicines.

While Sudan has lost revenue from oil extraction, it still derives income from transporting oil via pipeline. “There is no other route [for South Sudanese oil],” says Corti Paul Lakuma, research fellow and macroeconomist at Uganda’s Economic Policy Research Centre. “It has to pass through Sudan.” Sudan also has a pool of educated professionals and a stable banking sector.

The country’s economic future rests on a range of political questions, among them whether the military-civilian coalition can reach genuine accommodation. In the most optimistic scenario, that would make Sudan a model state of sorts. source