President Salva Kiir is not a good leader, but bad international policies can compel him to become a worse one.

Dust swirls as a UN helicopter takes off in Tali Payam, South Sudan. Photograph by UN Photo/Tim McKulka.

It’s no coincidence that South Sudan’s President Salva Kiir cracked down hard on dissent at precisely the same moment he reluctantly signed the “˜Compromise Peace Agreement’ – a deal that should, ostensibly, bring an end to the last 20 months of fighting with the SPLA In Opposition (SPLA-iO) forces. This also reveals why the tools of targeted financial sanctions, newly fashionable in Washington DC, must be used with extreme caution lest they worsen the situation they are supposed to redress.

The basic facts are these. On 27 August, under severe pressure from the IGAD (Intergovernmental Authority on Development) mediators and their backers, notably the US, President Salva signed the Compromise Peace Agreement. Riek Machar, leader of the SPLM-iO, had seen the writing on the wall earlier and had signed ten days previously. Salva came to the signing ceremony with an extensive list of reservations, which the mediators promptly and somewhat insultingly announced they would disregard.

During these same days, Salva dismissed three governors and cracked down on Equatorian political opponents. The Equatorian leader Peter Abdelrahman Sule was killed, with suspicions falling on collusion between the Ugandan and South Sudanese intelligence services. There are daily reports of disappearances. Salva himself threatened journalists who did not support the government line. A journalist, Peter Moi Julius, was killed days later.

The events are connected. According to the political-commercial logic of the political marketplace, peace – an end to violent hostilities between belligerents – is a bargain to share out power and resources. There are basically two routes to such an agreement: either the belligerents engineer a buyout, or their financiers do so. The result is as durable as the conditions in the marketplace.

A good example of a belligerents’ buyout is the 2006 Juba Declaration whereby Salva Kiir was able to bring dissident southern Sudanese militia commanders into an expanded SPLA, and their political leaders into the SPLM and the Government of Southern Sudan. It was possible because oil revenues meant that there was enough money to satisfy all. It lasted for as long as the money flowed: when the funds stopped, the deal fell apart.

Today, if South Sudan’s oil production were increasing and the oil price were high, it might have been possible for a similar bargain to have been struck. Unfortunately, South Sudan’s economic crisis means that Salva simply doesn’t have the funds to attempt anything comparable. All his available political budget is devoted to maintaining a narrow power base. For a buyout peace, Salva needs a lot more money. South Sudan’s donors want peace but they don’t want to funnel their money into Salva’s personal bank account, so they’re not supporting this well-established route to peace.

Financiers can impose a political austerity package on belligerents if they have the clout. This is what happened in Somaliland in 1992-93: the businessmen who controlled the livestock trade and remittances compelled the factional leaders to negotiate a peace deal. They could do this because the factional leaders relied on them for money, and because the businessmen could, if they so wished, circumvent the politicians and deal directly with military commanders. In Somaliland, this was the foundation for a transformational process of building accountable government. South Sudan’s donors have floated ideas of putting the oil revenues under independent management, but they haven’t done it, and still less have they worked out how to turn that money into political finance for peace.

So, neither of the marketplace routes to peace exists today in South Sudan. The current Compromise Peace Agreement in South Sudan was drafted and imposed by the “˜IGAD Plus’ group of mediators. They used tools of financial coercion – threats of sanctions including individually targeted sanctions – to press the belligerents into signing an agreement. Implementing the agreement requires political will and political means. But neither the tools nor the agreement address the question of what the belligerent leaders need for political survival. If anything, targeting illicit financial activities makes the leaders’ predicament worse. How are Salva or Riek to maintain their political bases without an expanded political budget? Their lieutenants are not suddenly going to start demanding a lower price for allegiance, just because their patrons are cash-strapped or have signed a peace deal.

With a tightened political budget, the only way for a leader to stay in position is to narrow his political base. Hence Salva must reward his closest circle of supporters (who are his most immediate threats), which means discarding others. He must shift from buyout to coercion. That is why an international squeeze on political payments may cause Salva to increase repression. He will do this because it is demanded by the logic of survival. Salva’s not a good leader, but bad international policies can compel him to become a worse one.

Tackling South Sudan’s pathological political economy requires different ways of organising political finance and controlling violence. Targeted sanctions cannot do this: they are tactical tools that shape incentives at the margin and cannot even compel political elites to hold a ceasefire for more than a few days, let alone promote any kind of transformation of South Sudanese politics. Nor is there a trade-off between democracy and peace – the short-term political reconfiguration in South Sudan will deliver on neither.

International policymakers may find sanctions appealing because they punish individuals who have misbehaved and give the impression of doing something right. But those who advocate targeted sanctions should correctly analyse their context and be aware of other consequences they may have. Those consequences may be deadly, as South Sudanese are discovering.

Alex de Waal is director of the World Peace Foundation.