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Saturday, 25 November 2017

Wake-up Call: Development and Corruption Are Inversely Related

I was out of the country for about a month. I left and the dollar rate to the Sudanese pound was swinging between 20 and 21. When I came I found it 28 i.e. 33% increase. People are disappointed after the great expectations that followed the lifting of the US economic sanctions last month. Expectations of a prompt improvement are the Sudanese pound exchange rate and reduction of prices of commodities. This led me to retrieve my two articles in Sudan Vision on September 11, 25, 2017.
September 11 Article: Sanctions Lifting Prospective
“It is really amazing that the majoring of the Sudanese citizens were pushed and led to believe that all problems of Sudan will be solved at the onset of a decree from Trump to permanently lift the economic sanctions which were imposed twenty years ago. They are mistaken because they are missing two important points:
1. Sanctions were practically lifted nine months ago by the Executive Order (E.U.) of Obama on January 12th, 2017 for a probation period  of six month, extended by Trump by another three months. What will happen on October 12th is a decree or (E.O.) to either continue the probation lifting and makes it permanent OR reinstating the sanctions as were before January 12, 2017. So no additional relieving points will be included in the permanent lifting E.O. Having said that, and if we contemplate the effect of the probation lifting, we will discover that during the past nine months the economic deterioration continued albeit there were no sanctions. National currency value dropped by 30% to a dollar from SDG16 on January 2017 to SDG22 on September 2017,prices of commodities increased by 40% and unemployment rate became 25% compared to 16% on January 2017.
2. Sanctions were in effect since 1997 and the period from 1999 (date of oil exporting) to 2011 (date of S. Sudan secession) was a period of the strongest economy in the history of Sudan. The national currency stayed at two pounds to a dollar throughout the period of oil exportation. Trade balance was positive (exports more than imports). So the above mentioned two missed points ascertain that the sanctions had and will have no direct effect on weakening or strengthening the economy. So people should not fall in the great expectations of any immediate effect on the deteriorating economy. Sanctions did not drop the Sudan economy when it was strong and will not prop it when it is weak. America is the great Pantheon of Capitalism; hence its economy is driven by the private sector. Lifting sanctions gives the green light to investors in the American private sector. American and European investors are very much concerned about the prevalence of three pillars: “Security and Safety, Infrastructure, and stability of this political systems.”
September 25 Article: Lifting Sanctions only IS Not Enough
“It is imperative that we distinguish the various differences between the American economic sanctions imposed on Sudan on 1997 and the US States Sponsoring Terrorism Lit (SSTL) in which Sudan was put on August 12, 1993.”
“SSTL is designated pursuant to three laws: section (6J) of the Export Administration Act, Section (40) of the Arms Exports Control Act, and sections (620A) of the Foreign Assistance Act. Taken together, the four main categories of sanctions resulting from designation under these authorities include restriction on US foreign assistance, a ban on defence exports and sales, certain control over exports of dual use items and miscellaneous financial and other restrictions.”
“To wind-up: the sanctions are likely to be lifted on October but this lifting will only have positive effect after achieving three objectives”
1. Removing Sudan from SSTL (States Sponsoring Terrorism List)
2. Reaching a comprehensive peace agreement on the basis of the African Roadmap.
3. Seriously and ruthlessly fighting corruption.
So, the gist of the two articles is:
1. Lifting sanctions without removing Sudan from SSTL will do little to avert the economic deterioration.
2. Strong economy and development are inversely related to corruption proliferation.
3. Radical change of persons and policies – external and internal – in governance plus restructuring of regional system is of vital importance to achieve a desperately needed deliverance of Sudan from an imminent collapse.