Sudan: Narrowing the Escape from Poverty
Helping Sudan turn into a democratic, stable, equitable, and prosperous country. That’s the ultimate dream end-destination; but there’s a huge problem with the US government’s wanton resort to placing sanctions on the Sudanese government: they have actually made steering Sudan on to that track tougher, not easier.
Sanctions have severely narrowed the escape from poverty for ordinary Sudanese – the underlying driver of Sudan’s old and new internal conflicts – and, in turn, have stunted the emergence of the very Sudan that all Americans and Sudanese so dearly wish to see.
Take Darfur. The US government and public bought quickly into rebel claims of deliberate, long-standing economic neglect (i.e. poverty) by President Bashir as moral justification for war. But, as you Americans would say, “show me the money!”, because it wasn’t the unwillingness, rather the inability of the Khartoum authorities till 2005 (two years after the conflict there started) to stump up money to develop Darfur, or anywhere else in Sudan for that matter (and, yes, that also includes Khartoum).
Put starkly, the cupboard was bare, owing largely to tight US sanctions.
Since President Bill Clinton placed Sudan on the State Dept’s state sponsor of terrorism list in 1997 (and thereby at a stroke legally barred the Sudanese government from receiving any financial assistance from the US), successive American governments – save for the current one – have steadily cut off all financial aid to Khartoum, and have toughened bilateral trade and investment sanctions to hobble Sudanese public finances further.
Moreover, I feel that is also very important at this juncture to also stress the regularly overlooked interlinked negative impact of implicit US sanctions (rather than sanctions-explicit US legislation) on Sudan’s political economy. In other words, US governments have also implemented implicit sanctions on the Sudanese government – which have predated US “˜headline’ sanctions and perhaps have been even more potent – by leaning (successfully) on the World Bank and the IMF to stop any financial assistance to the Sudanese government by using its leverage as the largest shareholder (both voting rights and capital contributions) in the Breton Woods institutions: Sudan’s last IDA credit ended in 1993, and its last dime from the IMF came back in 1985.
Coupled with the ripple effects of persuading its Western allies to follow suit, all told, US-led isolation meant the Sudanese government got, for example, just a cumulative $96 million in foreign budgetary support during 1994-2004 according to IMF data. At roughly sixty cents per person per year, that’s hardly enough for the government to build some roads and a couple of schools in Darfur, never mind cater for all Sudan. Export earnings, meanwhile, averaged less than $500 million a year throughout the 1990s and into the early 2000s, dominated by “˜bulge bracket’ (I’m being sarcastic) items like gum Arabic, livestock, sesame and cotton.
US implicit sanctions have also hiked the cost of living for ordinary Sudanese – their main gripe with government: Sudanese crave protection from poverty and, not, as the virtual picture of the country portrayed in the US would have it, from a hooligan trigger-happy state. The implicit US sanctions de facto forced the authorities to pursue an IMF-prescribed economic rescue (read liberalization) programme without the standard multi and bi-lateral donor-funded social safety net that is part and parcel of a usual IMF intervention. Worse still, President Bush and his predecessor, Bill Clinton, both pushed the IMF to chase payment of Sudan’s $1.7 billion odious debt, incurred by President Nimeiri during1969-85.
Khartoum has paid an average $52 million back to the IMF every year since 1994, mainly late interest fines. (Liberia, in contrast, paid back less than US$100,000 to the Fund before, at the prompting of the George W Bush administration, it had its debts cancelled). That’s a very harsh anti-development tax on all Sudanese, especially without even the guarantee of fresh loans from the Fund in the future.
Implicit US sanctions, exercised through Washington’s primus inter pares status in the Paris Club of bilateral debtors, have also ensured that the Sudanese government has not received a nickel of relief on the country’s crushing US$29 billion foreign debt – despite Sudan having long qualified for HIPC status.
So, don’t kid yourselves by pointing to Sudan’s oil-induced boom of recent years. Far from having no impact as is mistakenly claimed by “˜Sudan watchers’ here, US sanctions on Sudan (both explicit and implicit and their ripple effects) worked a treat for nearly 20 years: petrol shortages so severe that even the capital lacked proper bus transport, banks lacking any hard currency to lend, and basic items like sugar and bread rationed.
Protracted, severe sanctions-induced constraints on public finances in one of the world’s largest (10th), but poorest countries could only ever lead to one outcome. Crystallizing or, in the case of Darfur, reviving older badges of identification (kinship, religious, locality and ethnic ties), due to the collapse of public investment and welfare spending over most of the last two decades; in other words, it led to a huge jump in poverty rates, much of it extreme, across Sudan throughout the 1990s and the early 2000s, with millions of Sudanese (of all creeds, religions and regions) having either been thrown back into poverty or having sunk ever deeper into penury over that period.
Eroded nation-state loyalties (i.e. “where’s the state, can’t feel it or see it”) naturally tend towards war against the state or other groups to grab a larger share of public funds and other valued resources (e.g. land, water, and livestock). In other words, the devastating impact, in particular, of implicit US sanctions on livelihoods severely frayed the social fabric of Sudan – Darfur included. I mean, how could they fail not to? Withdrawing development finance from a prolonged period from any country in this part of the world for this length of time would severely strain the social stability anywhere; that’s a no-brainer!). In other words, economic under-development in the ‘periphery’ was not down to malign neglect by an Arab supremacist, psychopathic state caricature beloved of Congress, Hollywood activists, think tanks, and the media in the US.
What does it matter now? That’s all in the past you might say because the Sudanese government is in a much better place financially for it now has access to soft loans from China, India, and the Gulf states – plus sizeable oil revenues over the past five years. Even so, it’s not enough to quench the urgent backlog of basic and big-ticket development needs throughout Sudan, which in other countries are usually financed (and insured) through concessional project finance from the World Bank Group; public goods like railways, rural feeder roads, schools, and hospitals, namely projects that would provide the climbing frame for millions of Sudanese to escape from poverty, and also have the additional bonus of strengthening nationhood.
Yes, Sudanese need to take responsibility for their own sanctions predicament with the US. They, after all, are the ones killing each other. But playing catch-up in the global race for economic development to lift millions out of acute poverty is hard enough: more so when isolated from a quarter of the world economy and its powerhouse of innovation, technical transfers, corporate governance and general know-how (i.e. the US).
Moreover, hopefully the Obama administration will finally recognise the glaring and inherent contradiction that his predecessor managed to miss by continuing to apply (and in fact tighten) US sanctions on federal Sudanese authorities since the landmark CPA was signed in January 2005; the CPA calls for a much larger, if more institutionalised, Sudanese state, which is clearly incompatible with sanctions that are targeted at flattening federal finances and continue to severely impede its role as the prime lead-agency for development and welfare. Providing huge dollops of humanitarian aid as an interim panacea for this conundrum, as the previous US administration did, is ultimately not in the interest of ordinary Sudanese either: such financial inflows have proved easily fungible, have encouraged rentierism in housing and other non-tradable sectors (houses in Nyala currently rent for $4000 PER MONTH to ‘internationals’), and have distorted local product and labour markets for the worse.
So, it’s high time for US government to roll back its explicit and implicit economic sanctions on Sudan’s federal government. And it can. Washington manages to engage other countries constructively that have civil conflicts that are either longer or far worse (Uganda, Colombia, Pakistan (Kashmir), DRC, Sri Lanka, Russia etc) without being armed with the taser of sanctions, so why not Sudan??? Nobody, least of all me, is asking the US government to reinvent the wheel. And surely, the US is – must be – better than that, as all of us in this room must surely know that collective economic punishment is never a smart way to win the hearts and minds of people? Anyway, lifting the sanctions it’s not about punishing or rewarding the government of President Bashir, but about recognizing the severe price ordinary Sudanese and the challenge of building a modern nation-state both keep paying for US headline and implicit sanctions.
Economic growth is the most effective anti-poverty reduction weapon known to humankind – as the examples of China and India have shown. The electrifying growth of the Sudanese economy over the last five years has indeed helped hundreds of thousands of Sudanese escape from poverty (tissue box sellers example). But hundreds of thousands of Sudanese still remain trapped in extreme poverty, and their exit from their economic predicament would be speeded massively if US sanctions were rolled back – starting even with just removing some implicit sanctions by Washington both taking Sudan off the state sponsor of terrorism list, and ending its obstruction of Sudan’s access to IMF/World Bank financing, and international foreign debt forgiveness.
Sudanese deserve the right to turn the page about the north-south civil war and other conflicts and move on – as most have done – with the hugely challenging task of reconfiguring the Sudanese state as per the CPA. It’s also way past time that US government starts to acknowledge the (missing) elephant in the room vis-í -vis its interventions in Sudan over the last twenty five years: an emphasis on strengthening economic, rather than political, human rights for the Sudanese population like the right of opportunities for economic advancement, adequate provision of vital public services and the right to a dignified economic life. In other words, rights that are all incompatible with the maintenance of US sanctions.
His slogans were/are “˜change’ and “˜hope’.
So, President Obama, help change Sudan into the country its citizens want it to become, and Americans wish it could be. Me an all other Sudanese do hope you will lift US sanctions from Sudan quickly, Mister President, because the victims of Darfur – like all Sudanese – are victims of them too.
This is a version of a paper presented at Georgetown University, The Marvin Centre, – Seminar, US Sanctions on Sudan: Intended and Unintended Consequences, 29th April, 2009. It draws very heavily on an earlier paper on the subject written in this blog by Ibrahim Adam (got his permission!!)
Ahmed Badawi is Chief Consultant, Global Relations Centre (GRC), Khartoum, Sudan.