Posted by on February 17, 2012 in Blog
By Jeffrey Wright
While American attention has been focused on Syria and Egypt, an increasingly volatile conflict between Sudan and South Sudan has gone largely unnoticed. As with most issues between the two Sudans, the current conflict is primarily about oil. Increased oil production has driven Sudan’s recent economic growth, strengthening Omar al-Bashir, Sudan’s president since 1989. When South Sudan achieved formal independence last year after decades of conflict with the government in Khartoum, it took with it 75% of the country’s proven oil reserves. It also left the two nations in an arrangement that seems almost designed to stoke conflict: South Sudan owns the oil reserves, but the only way to get that oil to market is through a pipeline controlled by Sudan. After South Sudan’s independence, the countries committed themselves to solving the conflict over oil through negotiations, but both sides have remained intransigent and the negotiations are stalled.
As part of a dispute with Khartoum over the transport fees it pays to use the pipeline, South Sudan cut off oil shipments last month. It also alleges that the north has stolen oil from the pipeline, overcharged South Sudan for transport and withheld revenues that rightfully belong to South Sudan. In response, Sudan seized tankers carrying South Sudanese oil, taking the oil they carried as payment in kind for unpaid fees. Though the ships were released a short time later, the oil dispute has brought tensions between the two nations to their highest point since even before the secession of South Sudan. This is due, in part, to the importance of oil revenues to both countries. For the South Sudanese, the oil shutoff can be seen as a gambit of extraordinary daring. Since the South Sudanese government relies on oil revenues for nearly all of its budget, officials are gambling that they can survive without oil revenue longer than Khartoum is willing to wait. Despite Sudan’s much larger economy and military, there are signs that al-Bashir’s government is increasingly vulnerable to internal dissent, exacerbated by the loss of revenue from transport fees from the South. Recent protests at Khartoum University over tuition increases have led to violent clashes between police and students. The oil cutoff has pushed the Sudanese pound to new lows on global currency markets as investors worry about the impact of the loss of oil revenues on the Sudanese economy.
These pressures have raised fears of a continuation of the civil war between north and south, and the presidents of both nations have publicly raised war as a possible outcome. Despite the saber rattling, a peaceful solution to the conflict is still possible. Though they often imagine otherwise, as in South Sudan’s plan to spend billions of dollars on a pipeline through Kenya that would bypass Sudan, the two Sudans remain inextricably linked by economics and culture. Effective international mediation can help the two nations find a solution that is mutually acceptable and avoids another outbreak of violence. Sudanese oil exports, worth billions of dollars per year, constitute a very large pie. Surely a smaller slice is better than none at all.