Published October 06, 2013
KHARTOUM, Sudan – In recent times Sudan has gone through two major civil wars, the loss of its rebellious southern oil region, and the indictment of its president for war crimes. Now, with its economy in disarray, it's the latest Arab country to be feeling heat from the street.
The crunch came with the government's elimination of the subsidies that had long sustained cheap prices for fuel and other basic needs. The near-doubling of prices that resulted set off a week of rioting beginning Sept. 22, in which at least 50 protesters are estimated to have died.
The vast security machine whose buildings dominate the skyline of Khartoum, the capital, is expected to prevail, for now. But the government is overloaded with debt — estimated by the International Monetary Fund at $46 billion in 2013 — and unable to borrow from international lenders. Inflation has reached nearly 50 percent in 2013, with the Sudanese pound weakening and foreign reserves down to just 1.2 billion dollars.
So Sudanese activists predict a resurgence of protests and ultimately a repeat of a 1985 uprising that also resulted from an economic crisis and ended up toppling the government.
It's a sorry contrast to the days when Sudan was considered a rising oil power. Adding to the disarray, President Omar al-Bashir is wanted by the International Criminal Court for war crimes and crimes against humanity committed while putting down a rebellion in the Darfur region, where UN says 300,000 were killed and 2.7 million displaced.
The rundown capital reflects what many say is vast mismanagement of Sudan's oil revenues, estimated at more than 80 billion dollars over a decade, and the investment of 60 to 70 percent of the state budget in the military and security arsenal instead of agriculture, Sudan's other big potential export market.
Oil revenues were also wasted by corruption while al-Bashir fought armed rebellions in east, west and south Sudan
The oil boom days ended when South Sudan became an independent state in 2011, taking two thirds of oil production with it. The rest of Sudan went from oil exporter to importer. Sudan controls the export pipelines but disputes over transit fees prompted the South Sudanese government to halt oil production in 2012. South Sudan gets nearly all of its revenue from oil.
The al-Gezira Scheme, an agricultural project between the White Nile and Blue Nile in central Sudan, was to planned to become Africa's breadbasket but was neglected for years.
The abolition of subsidies brought out the unpopularity of al-Bashir, his family and inner circle. "We rebelled against the people who stole our sweat," the crowds chanted. They denounced Al-Bashir as "a Kafouri thief," Kafouri being the upscale compound in Khartoum where the president's large family is said to be living.
But as the government's unpopularity grows, it is sure to pour even more state money into its security apparatus instead of what experts say is most needed: structural economic reforms.
Money saved on subsidies will likely be wasted, said Professor Hamid Ali, a Sudanese public policy expert at the American University in Cairo, Egypt.
"Corruption is rife from the top of the political regime, where they live in luxurious villas and upscale areas," he said. "Look at all his (al-Bashir's) villas, farmlands, and factories in and outside the country in Malaysia and Sudan. Where did he get all of this from?"
U.S. diplomatic cables revealed by Wikileaks, the anti-secrecy website, said al-Bashir has stashed $9 billion in London banks.
Abda al-Mahdi, a prominent economist in Khartoum, said: "The government spent oil revenues as if there was no tomorrow" and now has to repay international loans for most of the bridges and dams financed by international lenders.
"The government debt increased tremendously," she said. "Now the government economy is at its weakest."
"People felt the mismanagement of the economy and this is the source of all problems. Oil was covering up all the problems and they surfaced when oil dropped," she said.
Farming, which provided 80 percent of the jobs in Sudan, was devastated by years of neglect. Floods In August damaged thousands of hectares (acres) of crops and displacing nearly half a million people, adding to farmers' suffering.
The al-Gezira Scheme, located in the fertile land between the Blue and White Niles, is the largest stretch of farmland in Africa, with 3.5 million people, nearly a tenth of the population, living on its 900,000 hectares (more than 2 million acres).
Founded in 1925 by Sudan's then British rulers, it produced cotton for British textile factories, and after the country became independent in 1956 Al-Gezira was the backbone of economy.
But over the past decade the Al-Gezira Scheme has been liquidated, with the government selling off textile mills, railway tracks and other assets. Now the land is to be sold to international investors.
"The country's problems are associated with the oil curse," said al-Mahdi, the economist in Khartoum. "When you depend totally on oil and ignore the rest of productive resources, you reach these results."