Sudan at the Crossroads (1)
The Sudanese nation stands at the most momentous crossroads since its independence more than fifty years ago. The route chosen over the next twelve months will determine whether the Republic of the Sudan becomes a failed state, devouring itself in a frenzy of plunder and mayhem, or whether the progressive forces in the country succeed in taking control of the political and economic direction of the country and pulling it back from the brink.
This paper develops the hypothesis that the Sudanese ruling elite has historically been constituted by a seesaw of state and private capital. At each stage of Sudan’s development, one or the other has dominated the political economy of Sudan, on occasions trying to destroy the other and on occasions trying to suborn the other to establish hegemony. The factional rivalries within the ruling elite are sufficiently intense and structurally constituted such that any fraction can survive politically only on the basis of a rate of accumulation that is so accelerated that it rules out any long-term investment in value generation. Dominated by a scramble for rents, and particularly those derived from the nexus of sovereign rents, forcible asset transfer, and mining of natural resources, the Sudanese state has come to resemble a vortex sucking the life out of an eviscerated peasantry to generate hyper-profits and the dictatorship of a security establishment.
The first part of my paper examines the historical development of the Sudanese state and bourgeoisie over the last thirty five years. I then examine the challenges to this aspirant hegemon and its economy of plunder. In the concluding part I examine the international context and especially the fetishization of the CPA, which is obscuring the deeper problems facing Sudan.
The Seesaw of State and Bourgeoisie
Thirty five years ago, Dr. Fatima Babikir Mahmud posed the question of whether the Sudanese bourgeoisie was the vanguard of development. Her conclusion was negative. The dominant bourgeois faction in Sudan was composed by mercantile capitalists drawn exclusively from the riverain classes which had served as the subaltern comprador elite under successive colonial regimes and had consistently aligned themselves with whoever was in power. While the colonial state had itself served as the primary vehicle for the penetration of metropolitan capital, developing an incipient agrarian proletariat in the Gezira scheme and an actual proletariat in a few industrial centres such as Atbara, the national commercial class remained engaged in trade and estate agriculture with hidden subsidies from the state. Dr. Fatima’s analysis demonstrated how agrarian capitalism in eastern and western Sudan served as a mechanism for rapid profit-taking, with the proceeds remitted to Khartoum and invested chiefly in consumables and real estate. The state provided the mechanism for agricultural land-mining through dispensing land leases at prices which either nominal or at most grossly understated the true value of land and legitimated the dispossession and pauperization of the smallholder farming class. At the time of Dr. Fatima’s research the state was in the midst of a progressive experiment in state-led economic development, which ground rapidly to a halt because it was founded on unsustainable borrowing and flawed and overoptimistic assumptions about rates of return.
The pattern of internal capital migration described by Dr. Fatima impoverished the provinces and intensified the regional inequalities of income and opportunity that have generated recurrent political conflict in our country. The true costs of the accumulation were passed onto the uprooted and uncompensated subsistence communities, whose human migration inevitably followed the capital flows to the metropolis, beginning the process of hyper-urbanization.
Today, the politics of the Sudanese bourgeoisie are no different and if Dr. Fatima re-investigated her hypothesis the answer would be unchanged. But there have been two major and conflictual developments in Sudan’s political economy over the intervening decades. One is that the opportunities for capital accumulation have expanded exponentially on the basis of increases in rent-seeking opportunities. The second is that rival bourgeois factions have emerged which, while unable to overcome the dominant position of the riverain mercantile class””still the jellaba“”have been able to lever open the fundamental contradiction in Sudan’s capitalist system so as to bring it to a state of crisis. However the Islamist bourgeois fraction that seized de facto control of the state in the later Nimayri years is poised to see off these challenges, albeit at immeasurable cost to the Sudanese people.
In the early 1970s, the state and mercantile capitalists were positioned in sublimated antagonism and it was as yet unclear whether the state would ally with the nascent working class and suborn the bourgeoisie to become the driving force for development. In fact, as is well known, the reverse happened and the mercantile class suborned the state and reshaped it as an instrument for private capital accumulation. This happened in a series of well-recognized steps:
(1) The appropriation of the foreign exchange flows by Islamic financial institutions using the intermediary of the remittances from the diaspora of emigrants especially professionals in the Gulf States in the years of the 1970s oil boom.
(2) The penetration of Islamic capital into the domestic economy beginning with the real estate and consumer import sectors, expanding into transport, mechanized farming and the informal sector through micro-credit. This enabled the Islamist bourgeoisie, using the Muslim Brothers as its vanguard, to envelop the sectarian capitalist class, neutralizing its political clout.
(3) The coalition between the mercantile and military-officer classes, cynically cemented by Nimayri’s establishment of the Military Economic Board in 1982. The result was what Alex de Waal calls the “military-commercial complex” which turned civil war into an opportunity for mass asset transfer. It also signalled the collapse of the final bastion of the “modern forces”, most of which had been thoroughly smashed by the Nimayri regime, and the remainder of which (namely the armed forces) now capitulated to the emergent state-Islamist machine. The social costs of mass pauperization were partly covered by foreign aid programmes. Under the pretext of a state of emergency, the militarization of capitalism de-criminalized asset-stripping at the point of a gun. The fusion of external security and commerce also drove the predatory expansion of the Islamist bourgeoisie’s commercial frontier up to Lake Chad and the Congo Basin. (It tried and failed to penetrate Ethiopia and Eritrea).
(4) The bankruptcy of the state including its systemic default to international financial institutions such that the state in fact became a liability rather than an asset for the Islamists’ commercial-political ambitions. The state having been comprehensively hollowed out and plunged billions of dollars into debt, while fabulous private wealth was acquired by those who were able to profit from fiscal mismanagement, meant that the private sector, having secured its position as chief security agent, set about constructing parallel economic institutions that could in fact swallow and reconstitute the state under the banner of Islamization.
(5) The fire sale of state enterprises to the NIF’s own bankers and the simultaneous privatization-through-Islamization of large domains of state finance including, abortively, revenue collection. (The Islamization of the tax system was never a viable proposition and was repeatedly halted by the state financiers well aware of the fantastical base of the ideologues’ financial calculations.) By the early 1990s the state budget was capturing only a fraction of the income and expenditure, in Sudanese and foreign currency, managed by the institutions of the Islamist regime and its profusion of quasi-autonomous offshore financial houses, many of them based in Arab countries and Malaysia.
(6) Economic sanctions increased the rents that the state and Islamic financial institutions could extract from their privileged access to foreign currency and markets. By handicapping legitimate businesses, sanctions encouraged the criminalization of the economy and tightened the grip of the security-commercial complex. At first we saw “garrison Islamism” (pace John Markakis) and later we saw the elite’s adept tactical exploitation of the rental opportunities deriving from the rationing of foreign exchange and import and export licenses.
(7) The biggest transformation of all was the opening of the oil sector, which albeit heavily mortgaged to the Chinese, provided unprecedented opportunities for rentier profiteering by a ruling bourgeoisie for whom the distinction between public and private sector had long before been abandoned. Due to the oil-driven boom, the official budget expanded about fifteen-fold between 1998 and 2008. This also signalled the first reversal in the private sector-state seesaw for twenty five years, as the development of the oil sector was also the opportunity for the state to reassert its position vis-í -vis the mercantile fractions which had escaped its control or had indeed tried with some success to suborn and control it. Both fractions of the ruling party correctly saw this coming and the fiercest internal battles were fought out just as the investment in oil production came to the point of production.
Over the last three decades, the vertiginous expansion of the opportunities for capital accumulation including hyper-profits from sovereign and security rents, and the widening of the geographical domain of Sudanese and associated capital, meant that the bourgeoisie was no longer a cosy network of family businesses from three tribes. Although this narrow social stratum has maintained its dominance it has faced challenges from several emergent mercantile fractions. In each case the ultimate prize is state power in Khartoum and the associated opportunities for hyper-accumulation, but the institutional and geographical dispersal of centres of state power has allowed ascendant fractions to gain a foothold such that they can use subordinate power centres to mount their challenge.
The first challenge was within Khartoum itself from the financial, military-commercial and party institutions which the Islamists had developed in parallel to the state. The original rationale for these semi-autonomous and sometimes clandestine institutions was that they would provide underground or offshore places of tactical withdrawal in case the Islamists lost state power: a rear base from which a comeback could be launched. They then served a secondary sanctions-busting purpose during the years of international isolation. Subsequently they served as the substructure for the Turabist attempted takeover of the state, prompting a successful counter-offensive by the Bashir-Ali Osman group which drove several of the Islamic financial houses to ruin as a prelude dividing and dispersing the mutinous bourgeois fraction, which incidentally drew its membership from a much wider social base than the victorious riverain fraction. The Bashir faction, its centre of gravity within the state structures and especially the security agencies, was financially strengthened by new contracts with China, which preferred dealing with a state, and which marked the comeback of the state””now factionally owned””as the leading financial player.
The weakness of the Islamist counter-elite is that its commercial base remains dependent on state beneficence: it cannot remain away from state power for long without losing out. Given the restructuring of the political economy in favour of oil rents, which are necessarily centralized and controlled by state authorities, and away from the decentralized trans-national Islamist financial networks, the seesaw has moved decisively in favour of the state setting the terms of the relationship with the private sector rather than vice versa.