Following a general introduction, Mr Aggrey Tisa Sabuni, Presidential Advisor on Economic Affairs
highlighted that the current economic attention in South Sudan is centred on the austerity measures following the decision by the government to shut down the oil. This decision is a culmination of a number of issues which have been carried over from the Comprehensive Peace Agreement, including unfinished border demarcation, Abyei, contested areas along the border, oil sharing agreement, water security, and South Kordofan. No credible agreement has been reached on these issues. In addition, it has become difficult to determine how much South Sudan should pay in transit fee for the export of its oil through the only route to Port Sudan. Support was previously provided to the two sides to reach an amicable settlement of the issue but unfortunately, by 20 Jan 2012, the government of South Sudan, with the backing of its people, found itself with no option other than to turn off the flow of oil.
This has enormous consequences for South Sudan, some of which are yet to be assessed. The original budget was prepared to the usual level of 10bn sSouth Sudanese pounds. However, considering that that South Sudan relies for 100% of its foreign income on the export of oil, this budget has been significantly revised. Instead, it will be an austerity budget of 4bn South Sudanese pounds; below 50% of what it was originally meant to be. The result is that the provision of services is terribly compromised; the execution of public development projects is compromised; and the connectivity programme to connect South Sudan with itself through roads and other means is put on hold.
On the positive side, this has highlighted the need to diversify the economy away from reliance on one commodity. Crop production, animal husbandry, fishing, have been neglected over the last 6 years but are actively being brought back to life. In the future, 20% of income must come from non-oil sources. Even the reliance on neighbours to supply us with everything is being reconsidered, so that at least basic necessities are supplied locally.
Next, speaking on the instability and fighting in Jonglei, was Archbishop Daniel Deng, Primate of the Episcopal Church, South Sudan who is leading a new high level committee for peace to bring reconciliation and tolerance amongst the tribes in Jonglei. He observed that the root cause of the fighting concerns the economic situation; there are no roads in Jonglei, and once the rain has come, you cannot move from county to county. The only economic means of survival people have is cattle. Whilst the cycle of the theft of cattle has been a long tradition, it has become worse with the introduction of automatic weapons and in turn this has increased the death toll significantly in these areas.
The committee will work in two parts; the first is high level discussion with the government and politicians and the second part will be led by the Sudan Council of Churches and will seek to mobilise and educate the community on the importance of peace in the Jonglei area. However, it will take time and will be a long process.
Dr Luka Biong Deng, Co-chair of the Abeyi Joint Oversight Committee (AJOC) and Executive Director of Kush, Inc introduced the Abyei Joint Oversight Committee, which is the highest level of the executive in the area. The body represents both heads of state from the two countries and its role is to oversee the implementation of the UN protocol of last year. So far, the meetings have been very encouraging. There is relative stability in Abyei and the UN forces have been fully deployed. However, the forces have the confidence from both the Dinka and the nomad communities. This is a unique mission and it has provided a good platform for a sense of security both for the nomads and the returnees. One positive development is that the two countries have just agreed four basic freedoms: the freedom to move, the freedom to own, the freedom to dispose and the freedom work. However, the Sudanese government have yet to sign the State of Mission Agreement, leaving the fully deployed UN forces in Abyei without a legal mandate.
The next speaker from Juba was Dr Alastair McPhail - UK Ambassador to the Republic of South Sudan who reflected on the issues which still remain since the previous Juba calling event nine months ago. In particular, the international community must not ignore the current situations which include the oil shutdown, austerity measures, tensions on the border, refugees and IDPs, insecurity in a number of states not just Jonglei. He stressed that rather than solely focusing on Jonglei and oil, it was important to also discuss the nature of cattle rustling as well as insecurity across South Sudan and the upcoming austerity measures.
Returning to the issues surrounding the austerity measures was William Bain MP - Chair of the Associate Parliamentary Group on Sudan and South Sudan (APG). He mentioned that one of the most current debates in the West is the effect that austerity measures of reducing expenditure to cut debt will have on growth; in this country there are currently huge debates on whether the balance is right on that account. It is extraordinary to hear that circumstances faced in South Sudan have meant the need to halve the expenditure and so the main issue is to explore what impact this will have on employment and growth as well as discussing longer term plans to diversify the economy. South Sudan is not yet engaged with international institutions. However, a strengthened relationship with the outside world could perhaps be a beacon to the north to follow a similar trend. A recent Trade and Investment conference on South Sudan was very encouraging and highlighted the potential involvement of international actors in the future of South Sudan’s growth.
Finally, Sara Pantuliano – Head of the Humanitarian Policy Group, Overseas Development Institute, addressed the meeting and urged the panel to also reflect on the wider challenges, and in particular the complex and accelerating challenges on the humanitarian side. Many people do not have ID or documentation as Sudanese or even South Sudanese population and so it is urgent to discuss the risk of statelessness for a large number of people. Following a recent visit to Juba, Dr Pantuliano described spiralling violence not only in the rural areas, but also in towns. In particular, she was struck by the mounting level of xenophobia in Juba towards nationals from neighbouring countries.
In terms of international engagement, at ODI there has been previous discussion on how ‘fit for purpose’ the aid architecture in South Sudan has been and the conclusion is that it has not been fit at all. It is now urgent to apply the lessons learned by asking donors to rethink their strategies and developed better tailored approaches for South Sudan which balance state building priorities with support for adequate humanitarian response capacity where neeeded. In 2005/6, this capacity was de facto dismantled and made minimal. Clearly we are in a situation where it needs to be as strong as it has even been.
The first round of questions focused on the role of the international community both as donors of international aid and development and as future investors. It also focused on the capacity of the existing South Sudan government to manage a growing relationship with other international actors, including through the Commonwealth.
William Bain opened the Panel’s response by suggesting that any country has to move from the aid stage into a development stage. In terms of infrastructure, there are urgent needs in South Sudan, especially for a transport network. In terms of finance, micro finance structures would empower people to make their own livings in the coming years. The Department of Innovation and Skills will continue to press the British Government about how to develop South Sudan’s economy, whilst diversifying away from oil. Historically, and elsewhere in Africa, we have seen that the engagement in international institutions can bring solutions to many pre-existing problems.
Sara Pantuliano agreed with this analysis but also called for deeper engagement from the international community with the national organisations, in order to ensure that South Sudan’s civil society informs the international aid agenda.
The second round of questions addressed the relationship between energy and the economy. If South Sudan must diversify its economy away from oil to be more sustainable, then will there be plans for a green economy which could be presented at the Rio 20? Also on the topic of energy, to what extent are the plans for local government reform interrupted by the current austerity measures despite being critical to proper oil delivery?
Government led-private sector participation would be one way to encourage growth. There also needs to be greater emphasis on production in agricultural sectors, organising farmers into local cooperative groups. The urban sectors in Juba currently rely on food from neighbouring countries as they are mostly cheaper than local sources. Whilst there is an encouraging amount of interest from the international business community to invest in South Sudan, unfortunately situations such as the fighting in Jonglei take control of the headlines. Despite the numerous security issues which have been discussed, and the climate of austerity, the South Sudanese government has planned to protect the provision of water and sanitation, demonstrating a structure of good governance.
Luka Biong agreed that there could be plenty of opportunity for South Sudan to develop a green economy but that this cannot be discussed until there is better infrastructure in otherwise neglected areas.
His Excellency Abdullahi Hamad Ali Alazreg, Ambassador of Sudan to the UK, spoke from the floor and thanked the countries which helped to write the CPA. He stressed that whilst the people of Sudan and South Sudan have acted in a civilised way over the secession of South Sudan, one of the main problems is the continued lack of trust between the two countries..
Dr Alex de Waal, also spoke from the floor and agreed that the negotiations have been marred by a lot of distrust and bitterness. Yet, he pointed out that there has also been some progress lately and that a new realism is emerging at the talks. Abyei can be used as a success story and shows the goodwill and leadership which have brought a sense of accountability to the area. He mentioned that a presidential summit has been agreed, but that its successful outcome risks being compromised by the reciprocal fear the two parties harbour that that the other side has a regime change agenda and is still connected with destabilising proxy forces.
The third, and final, round of questions asked specifically how long the members of the Panel expect the pipeline to be closed for and also how prepared the South Sudan government is to meaningfully include civil society organisations in the Constitution making process.
Archbishop Deng said that the government is very committed to involving the civil society in the creation of the new Constitution. One of the best assets of South Sudan is the population and their satisfaction with the law of the nation. This has been reflected in their support for the decision to suspend the oil pipeline.
The final comment was made by Sara Pantuliano also reflecting on the popular support for the oil shutdown. However, she emphasised that many of the populations of South Sudan are still to enjoy the benefits of independence and that poverty continues to be rampant in much of the country. The oil shut down will accelerate the problems that make daily life difficult for most South Sudanese. The political gains of the austerity measures are very short time and this must be kept in mind and priority be given to reengaging in negotiations to identify a more constructive outcome.