South Sudanese President Salva Kiir addressed a letter to dozens of “former and current senior government officials” pleading with them to return an estimated US$4b in “missing” government funds. The Globe and Mail reports that the US$4b reportedly stolen would add up to approximately 2 years’ worth of oil revenues for the country, which upon seceding from Sudan took about 75% of Khartoum’s oil reserves with it (amounting to some $5b worth of annual income, according to the Petroleum Economist trade publication). Some US$60m has reportedly been recovered, but continued mismanagement, graft and badly bid contracts (most notably, for food imports) means that additional funds still remain unaccounted for and may be unrecoverable.1
Despite the emotional plea from Kiir, in an un-encouraging sign for transparency in South Sudan this past April, the ruling Sudan People’s Liberation Movement (SPLM) Party that Kiir leads “voted against a bill seeking to make contracts and information about the young country’s oil industry more transparent by making it available to the public.”
From the Sudan Tribune:
The lawmakers’ decision has created some public criticism. As well voting against the Petroleum Bill, which would have required the government to provide justifications for oil contracts with individual companies, MPs also voted against publishing sales and production data.
During deliberations, George Bureng, an SPLM member of the National Assembly representing Central Equatoria State said he would prefer to see that oil related information be limited to only relevant institutions not the general public because information about oil could be used against the country by her enemies, referring to Khartoum.
“It is good to allow [the] public [to] access any information but sometimes there is sensitive information which cannot be made available to the general public”, Bureng told the house.
Tensions are high in both Khartoum and Juba as a result of a recent conflict over the disputed oil fields in Helig (which was occupied by South Sudan) and the border region of Abeyi (which was occupied by Sudan). Though the fighting has died down, talks on establishing a demilitarized zone have stalled, the AFP reports from Addis Ababa, where the African Union-brokered talks are taking place:
Peace talks to end weeks of fighting between Sudan and South Sudan were deadlocked Tuesday after failing to agree on where to set up a demilitarized zone along their contested border.
“The position of the parties is still rather far apart on these issues,” South Sudan’s foreign minister Nhial Deng Nhial told reporters during a break in the week-long talks, which still continue despite the lack of progress.
“We have not yet been able to agree on the line from which the safe demilitarized border zone is going to be drawn,” Nhial said, but adding he remained optimistic a deal could yet be reached.
Further complicating these talks is the arrival of delegates from the Sudan People’s Liberation Movement -- Army North (SPLM/A-N). This organization is the branch of the SPLA, whose leaders dominate South Sudanese government, still operating in Sudan (the SPLA was founded in 1983). Small Arms Survey notes that because “the political and military high command in the SPLM/A-N significantly overlaps,” “the political and military goals of the organization can be viewed as one since it is now an armed opposition movement in Sudan.”
As a result, though SPLM/A-N delegates were invited to the talks by the African Union, Khartoum has “excluded” them from the talks. Fighting in Sudan’s Nuba Mountains between the SPLM/A-N continues, and the continued iciness between Juba and Khartoum over the SPLM/A-N’s insurgency seems irresolvable. Khartoum’s armed forces are reportedly too worn down by years of attritional counterinsurgency operations in Darfur and the “Three Areas” provinces (including the Nuba Mountains) to launch a full-scale operation against South Sudan, but refuse to give up any more territory to the SPLM/A-N. Meanwhile, Juba simply does not wish to lose a force operating in the border provinces of the regime whose embrace it just escaped from. Plus, there is the question proposed by Philip Thon Aleu to a South Sudanese governor last summer that offers insight as to why Juba would be hard-pressed to accept any “compromise” initiated by Khartoum over the “Three Areas” region:
The SPLM was joined by people from South Kordofan, Blue Nile and people from other parts of the country who are not from South Sudan. How do you think about those people who are not part of south Sudan’s freedom today? And what is the way out?
Resistance to demobilization of secessionist militias and some SPLM units is already proving to be a challenge for South Sudan. And neither side is likely to make the first move towards a ceasefire with or recall of the SPLM/A-N -- which has its own particular goals, of course -- for fear of being perceived as “weak” in the eyes of the other.
No “great power” better understands (and plays off of) these clashes than the People’s Republic of China. Beijing is Khartoum’s primary arms dealer, but at the same time presents itself as a mediator to both countries and takes the bulk of the two countries' oil exports. Even though most of Sudan’s oil now lies in South Sudan, the extensive damage to facilities (and investor flight over the past several years) and continuing transit dispute between the two countries means that the Chinese have a long way to go in implementing a comprehensive plan for the country.
Though Beijing just reached an agreement to build up South Sudanese “infrastructure,” a pipeline agreement was conspicuously absent. South Sudan is landlocked, and has since 2005 depended on Sudanese facilities or trucks to deliver its crude to ports, paying Sudan transit fees. China does not wish to alienate Sudan, with which it has a much closer relationship, yet South Sudan has the most potential for growth -- and as bad as Sudan’s economy is, South Sudan’s is much worse, and much more dependent on foreign aid with strings attached.
It’s about a lot more than the oil for Juba and Khartoum, but oil is the prism through which the two government’s “great power” backers will most likely see their conflict.
1An unknown percentage of the lost money is thought to have been pocketed by officials to buy property overseas. Interestingly, last year, the Oakland Institute reported that American speculators were buying up South Sudanese properties.
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Republished with permission of Foreign Policy in Focus