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Saturday, 05 August 2017

Wake-up Call: Hurdles in the Road of Sanctions Lifting

The US Charge D’affaires statement in the Sudanese parliament last week was a clear and unequivocal

. He spoke about the reasons for extending the economic sanctions till October which were: The American new administration is not yet completely staffed on the African Affairs Desk, addition of three more issues not included in the previous five tracks – extending more freedom of expression and parties activities, observing the rights of non-Muslims to exercise their religious and educational activities without obstacles or prejudice, and lastly to refrain from dealing with North Korea in compliance with the UNSC sanctions. He also stated clearly that there is no link between lifting of sanctions and removing Sudan from the list of terrorism sponsors. He added saying the new administration is under heavy pressure from about 53 American civil society organizations which include Sudanese opposition leaders of Darfur. So, our government should not raise the expectations of citizens to the level of imminent lifting of sanctions on October and an immediate relief of economic conditions and abrupt reduction of prices of commodities.
We have remember that sanctions were already lifted 6 months ago and till now there is no improvement in the economic conditions, On the contrary prices of commodities hiked to exceptionally high rates (40% increase) following the dramatic falling of the Sudanese pound against the dollar.
American economic sanctions are definitely not the major reason of the falling economy. Sanctions were imposed on 1997 and the best economic conditions in Sudan prevailed in the period from 1999 to 2005 when oil export proceeds constituted 70% of the budget. The pound rate in that period was SDG2.5 to a dollar. The economy was strong and the growth rate was around 10% (in 2014 was 1.6). We have to be realistic in our expectations. Lifting of sanctions will not have an immediate effect to encourage investors from America or Europe enter Sudan in a fully fledged manner before removing the following hurdles:
1. Political stability: Coherent homogenous governance is not yet ascertained. The defection of the strong man in the presidential offices, General Taha, to Saudi Arabia and his immediate warm welcome by rewarding him as an advisor to the KSA Foreign Minister Adil Al-Jubair. All this casts a shadow of doubt about the stability of the governance.
2. The ambivalent stand of Sudan between KSA, UAE and Qatar. After the last visit of President Al Bashir to KSA and UAE Sudan appears to be leaning to this axis.
3. Resentment of people from the hardships of meeting the sky-rocketing prices of commodities does not encourage investors.
4. The lack of guarantees in the investment acts especially in fully owning lands without obstacles from native owners is also detrimental to investors’ enthusiasm.
5. Poor infrastructure: Electricity sustainable availability is not guaranteed and its prices are very high. Cheap railways transport is not available. Sea Ports especially Port Sudan handling capacity is poor and deteriorating. Shipping lines started to avoid Port Sudan and handle Sudan cargoes through transshipment dealing. This is very costly in imports or exports of goods.
6. Some local and recent minor incidents but could also be hurdles in the road of lifting sanctions e.g. the crisis of the University of Bakht El-Ruda in which some students from Darfur were dismissed which led to chaos and closing of the university, the decision to oblige the Christian schools to work on Sundays and charge their weekly holiday to Friday, the statement of the US Embassy in Sudan last week about the deterioration of humanitarian and security conditions in Jebel Marra (Darfur, and finally the decision of the pro-Sudan government of Libya to expel the Sudanese diplomatic mission from Libya on alleged accusation of supporting terrorists and threatening the Libya security.
7. The real stumbling block on the lifting of sanctions on October will be announced visit of the President to Russia. If this happens before October the probability of lifting sanctions will drop many-fold. I sincerely hope this will not happen as it will be fruitless to Sudan’s economic crisis because Russia itself is in financial trouble under continued check and sanctions from America and Europe.