The ruling parties in northern and southern Sudan, as well as international actors in Sudan currently are almost exclusively focussed on the referendum on southern independence. Given the delays to the referendum timetable and the ongoing war of words between the NCP and SPLM, this is not surprising. Nevertheless, the almost exclusive focus on the January vote threatens to divert attention away from the negotiations underway between the NCP and SPLM on post-referendum arrangements. Whether the parties are able to progress and strike viable deals in these negotiations is of crucial importance for the referendum and the associated potential for conflict. In my briefing, Negotiating Southern Independence: High stakes in the talks on post-referendum arrangements, I argue that deals could be based on existing interdependencies between north and south. Regardless of the referendum’s outcome, an expansion of north-south relations based on these interdependencies would provide the best options for stability – but close and stable relations between the two states are particularly important if (as is most likely) the south becomes independent.

North-south negotiations began in July and have since been taking place behind closed doors, excluding external observers or mediators. The parties may resort to the mediation of the African Union High Level Implementation Panel for Sudan (AUHIP), led by former South African President Thabo Mbeki, or employ the expertise of external consultants, but to date have hardly used these options. Little is known about their progress to date – partly because the talks are in their infancy on many points, partly because both parties have largely kept quiet thus far. As both sides and external actors are all occupied with the referendum itself, the talks are unlikely to be well-advanced by the date of the vote (i.e. 9 January 2011, according to the current schedule); moreover, it is questionable whether the two parties will have reached compromises on all key issues by the end of the CPA interim period on 15 July 2011 (when southern independence would become effective). The more protracted the talks are, the more likely is the emergence of conflicts between the two sides or their proxies in the run-up and aftermath of the referendum. Destabilising tactics and proxy warfare (such as through tribal militias and other armed groups) have long been part of both sides’ repertoire in negotiations, meaning that the risk of increasing instability is associated not only with the possibility of southern secession as such, but also part of the negotiations themselves.

Contentious points and possible solutions

The negotiations are structured into four areas, each of which is covered by a working group comprising representatives of both parties: Citizenship; Security; Economic, Financial and Natural Resources; as well as International Treaties and Legal Issues. Key negotiating points include an arrangement to divide up oil export revenues; the rights and duties of citizens across the common border (including rights of residence, work, trade and land use); the currency and national debt; water; and security arrangements. In addition, two issues that are not part of the negotiations in this context are nevertheless of major importance for future north-south relations: the delineation of the common border, and the status of Abyei.

There are a number of opportunities to stabilise the difficult relations between the two future states in the critical first few years after the referendum, by drawing on existing interdependencies. The arrangement whereby revenues from oil produced in the south were shared equally between the central and southern governments was perhaps the single most important factor behind the CPA’s success to date, as both sides had a vested interest in continuing the agreement. There is an opportunity to establish a mutually beneficial arrangement for the post-referendum era that could play a similarly stabilising role as its equivalent in the CPA. The necessity of such an arrangement is clear to both sides, not least because the southern government currently has no other option. Until the viability of an alternative southern export pipeline is established, an arrangement between the two sides will be primarily a question of how significant the northern share of southern oil revenue will be, and the method by which it will be calculated. This is not to say that there is no potential for conflict on this point: should either side use the instruments of pressure available in this area – such as a temporary export blockage by the north – this could potentially trigger war.

Another case in point are the rights and duties of northern and southern citizens on the other side of the common border. The central government has begun to exert pressure by threatening to expel southern Sudanese living in the north following southern independence. On the other hand, southward migration by northern groups is more developed than vice versa, including for cattle-herding Arab nomads (Baggara), who are an important constituency for the NCP. This strengthens the southern government’s negotiating position. Moreover, the regulation of southerners’ residence rights in the north will be linked to those of northern traders in the south. To increase the chances of a relatively stable transition to southern independence, the central and southern governments would have to build on these existing interdependencies to strengthen their bilateral relations, rather than trying to outdo each other in restricting access for the other state’s citizens. The more complicated – but ultimately more stable – solution would be a “˜soft’ border. This would require the detailed regulation of northern and southern citizens’ rights and duties on the other side of the border, given that unregulated migration and land use would be a recipe for conflict between local groups. An agreement on an open border with clear rules for cross-border movements would help stabilise north-south relations. An expansion of infrastructure linking the two future states could further bolster such a border regime.

These points are also relevant to the Abyei dispute, which is not part of the negotiations on post-referendum arrangements as such. The preparations for the Abyei referendum have experienced even more delays than the independence referendum, and the criteria for voter eligibility are fiercely contested. As a result, doubts are growing whether the vote will be held on time, and the Abyei dispute is increasingly becoming a negotiating point. In September, the NCP suggested that the Abyei referendum should be cancelled and the area should be turned into a demilitarised zone whose residents would have dual nationality. The SPLM has rejected the proposal, not least because it would represent a departure from one of the key components of the CPA, and therefore could ultimately raise questions about the independence referendum itself. Nevertheless, a negotiated solution would offer an opportunity to defuse the Abyei dispute. The Abyei referendum would be very likely to lead to violence in the region. The conflict not only has a national dimension (related to the oilfields located in Abyei) but is particularly explosive at the local level, where the rights to residency and land use of two groups are at stake – the Ngok Dinka (a key constituency for the SPLM) and the Misseriya (a Baggara tribe). The only stable solution would be one where the rights of both groups are guaranteed, regardless of whether Abyei becomes part of the north or the south.

A common currency could form another stabilising link after southern secession. Given that oil revenues are a fundamental factor for both states’ budgets, the Sudanese Pound could conceivably be used as a common currency. The question then becomes how the influence of each side on the institution responsible for monetary policy (the Central Bank of Sudan) would be regulated. From the central government’s perspective, a common currency would have to be backed up by mechanisms controlling fiscal policy in both states, as a fiscal or current account crisis in the south could destabilise the currency. The alternative solution – less attractive from the viewpoint of north-south relations, but currently favoured by the SPLM leadership – would be a temporary dollarisation of the southern economy.

There are a number of negotiating points where no obvious interdependencies exist, such as on the question of Sudan’s external debt, or on security arrangements. Nevertheless, there are opportunities for external actors to support compromises and function as guarantors of a wider north-south arrangement. With regard to Sudan’s external debt, for example, the central government will seek to hand part of its this debt over to the south in the event of secession. The SPLM strongly rejects this. Donor states have two basic options in this regard: either to initiate a multilateral debt relief addressing the entirety of old Sudanese debt (regardless of its repartition between north and south) or to apply such relief only to that part of the debt passed on to the southern government in the negotiations. The first option, planned as a process lasting several years, could have a major stabilising impact on north-south relations, by significantly increasing Western donors’ leverage over the central government.

Admittedly, an expansion of bilateral relations in parallel to the secession process will require significant effort – particularly for the south, which has already begun to strengthen its ties with its southern and eastern neighbours, as well as Western donors (particularly the United States). The SPLM, as a former rebel group that continues to be deeply suspicious of Khartoum, will likely seek to contain northern influence in order to assert the sovereignty of the emerging southern state. Conversely, the NCP is likely to see existing ties between the two states primarily as an opportunity to maintain and exploit its dominant position vis-í -vis the south. Both tactics run counter to the stabilising impact that close interdependence could have. Finally, there is a danger that too close relations between the two states could have a destabilising impact if the south is too exposed to Khartoum’s influence through its dependence on the northern oil export infrastructure, trade and currency.

Ultimately, the compromises necessary for close and stable relations will have to be reached by the two parties themselves. Nevertheless, the two sides should be encouraged to resist their likely reflex of erecting barriers and curbing ties between themselves. This is particularly relevant with regard to the southern government, which seeks the backing of Western donors as a counterweight to Khartoum’s influence. However, unless it is coupled with closer relations with the north, the expansion of southern ties with its southern and eastern neighbours and the West could deepen the polarisation between the two states. Instead of hastening the south’s uncoupling from the north and raise the risk of conflict between the two sides, external actors should seek to promote their integration, and prevent imbalances in north-south relations.

Wolfram Lacher is a researcher on Sudan and the Horn of Africa at the German Institute for International and Security Affairs.