Sanctioning the CPA: A Policy Conundrum for the U.S.
Over the past twelve years, the U.S. has put forth a confusing array of legislation to impose economic sanctions on Sudan. Horrified initially by the Sudan government’s early support for international terrorism and, later, its behavior in Darfur, yet aiming to support the signed peace agreements, US policymakers have enacted a disconnected series of measures on Sudan. In some areas, the US has meant to isolate and punish the regime, yet elsewhere, the US has expressed explicit support and engagement. In a newly-issued report, U.S. Sanctions on Sudan: Intended and Unintended Consequences, we argue that the adverse effects of economic sanctions outweigh any benefits they have brought.
Here is a snapshot of how US economic policy towards Sudan is structured:
“¢ Isolation of the North under the sanctions regime;
“¢ Support for economic development and democratic governance in the semi-autonomous South;
“¢ Selective exclusion of the minority and marginalized populations of the North from the sanctions regime; and
“¢ Support for the full implementation of the CPA which requires both a spirit of cooperation and cohabitation between the North and the South, and constitutionally legislates areas of power-, wealth- and security-sharing between the North and South.
This amounts to an extremely ambitious attempt to selectively hurt some people in Sudan while helping others, based on their geographic residence. In reality it is beyond the power of sanctions to operate to hurt some areas of the country while leaving other areas unaffected, and even benefitting from other aspects of US development assistance. It is an attempt that has had very limited success, and instead threatens to undermine the peace agreement and the US’s influence in the country.
The evidence of success of the sanctions policy on the North is scant. In spite of the US sanctions on the North, Sudan’s GDP has grown – exhibiting one of the strongest growth rates on the African continent over the past many years. This growth has occurred with US businesses left out of the market, instead allowing Sudan’s more authoritarian partners to reap the profits – in some cases stepping right in to the gaps left by departing western companies. The exclusion of US businesses also has meant that there is a dearth of Western influence on the ground in the North – influence which could have positively impacted the modernization and democratization of the country and promoted the type of influence and engagement among the population that could press for greater engagement with the West.
We conclude that the American policy of isolation via sanctions has isolated the influence of the US, it has not isolated Sudan.
As a general observation, unilateral sanctions are generally understood to have little effect on the countries upon which they are imposed. A single country barring investment rarely produces sufficient economic pressure on a regime that would ensure marked behavioral change in lieu of violent intervention. Sudan illustrates this general rule. Many US policymakers understand that their sanctions may have little practical impact in terms of isolating the regime, and instead have generally applied them as an act of moral condemnation, especially against Khartoum’s complicity in the crisis in Darfur. The decision to use sanctions appears largely to be an emotional response to a human rights disaster and humanitarian crisis – it implies that the Sudan government’s role demands punitive measures but the crisis as a whole is not worthy of a US military intervention. It is the policymakers’ response to the felt need to do something!
Notwithstanding the moral outrage felt by the American public, it has not yet been explained that the “hurt” of the sanctions has been felt not by the ruling party, but rather by the ordinary population in both North and South Sudan. Voices arguing to this effect have been shunned from speaking out in public, lest they be seen as NCP sympathizers or even (absurdly) apologists for genocide in Darfur.
Special Envoy General Scott Gration recently aired his critical view on the sanctions in public, to near boos, when he expressed a concern that they were inflicting harm in areas not intended to be harmed. The empirical reality, irrespective of any moral sentiments, is that economic sanctions have not had the desired outcome. Instead, they have had unintended consequences opposite to the aims of those who demanded and designed them. Those they were intended to help have been hurt, and those whom they were supposed to hurt have been managed to evade the pain.
In South Sudan, the irony of the US policy conundrum is center stage. When Congress passed the Darfur Peace and Accountability Act in 2006, it exempted South Sudan, along with Darfur, the Transition Areas of Abyei, Blue Nile and South Kordofan and IDP camps surrounding Khartoum from the US sanctions. The victims of Sudan’s wars were not supposed to be victimized again.
Yet in practice, it is South Sudan that feels most of the impact of US sanctions because of its relationship with the North according to the arrangements in the CPA. The CPA stipulates that the two regions have areas of power-sharing, wealth-sharing and bear an obligation to work together to promote the economic development of all the people of Sudan. Because of how the CPA is written, in almost every case of commercial engagement and investment in South Sudan, companies will face compliance issues with OFAC (the US agency responsible for monitoring the sanctions). Navigating the hoops and ropes of US OFAC policy can be at best a trying situation and at worst, a deterrent to US investment in the South.
In short, one aspect of the US policy on Sudan undermines directly another imperative of US policy on Sudan. It is a peculiar and unfortunate circumstance for the South; and one that destabilizes the relationship with the North, the successful implementation of the CPA and the resolution of US-Sudan relations.
M. Karna L. Cohen is special projects researcher, Executive Research Associates. The report was also sponsored by the National Foreign Trade Council and USA * Engage, which is critical of U.S. sanctions policy.