Report: Possible Sudan war could cost $110 billion

The economic cost of a return to conflict between northern and southern Sudan could be at least $110.3 billion over 10 years, a new report said Thursday.

An independence referendum for oil-rich Southern Sudan is scheduled to be held Jan. 9. Sudan, with its rich resources and its great potential for conflict, has recently featured high on the U.S. foreign policy agenda.

Together with the United Nations and regional leaders, the Obama administration has been working to ensure the referendum is held on time and that tensions over it between north and Southern Sudan are reduced.

The report by a group of think tanks breaks down the economic cost of possible future conflict between north and south Sudan into three parts: the cost to Sudan, the country's neighbors, and peacekeeping and humanitarian programs that would be funded by international donors.

It does not include the human cost of north-south Sudan going back to the battlefield after five years of restive peace.

"The report challenges the Sudanese parties and those governments who have influence over the situation to ask themselves: Are we doing enough to prevent a conflict that could cost over $100 billion and hundreds of thousands of lives?" the report says.

It said Sudan may lose at least $52.1 billion over 10 years. Kenya, Ethiopia and Uganda — three countries that border Southern Sudan and have in past conflicts suffered a spillover — are estimated to lose about $29.2 billion over the same period. Peacekeeping and humanitarian programs to deal with the effects of a 10-year conflict are estimated to cost an additional $29 billion.

"Our figures are on the conservative side," said Matthew Bell of Frontier Economics Ltd., a European economics consultancy group that co-wrote the report.

The report is based on recognized models used to calculate the economic cost of war and uses World Bank and International Monetary Fund data for Sudan and its neighbors Ethiopia, Kenya and Uganda. It is also based on current budgets of United Nations missions in Sudan.

It takes the scenarios that any renewed conflict could take either up to 10 years before peace is restored, or 25 years, given Sudan's experience. An ongoing conflict in Sudan's western region of Darfur started in 2003. And the north-south conflict ended in 2005 after two decades of conflict that resulted in the deaths of some 2 million people and ravaged the economy.

The 2005 peace deal that ended the conflict allowed Southern Sudan to share power in the national government and gave it a measure of autonomy, including its own president and legislature. The agreement also provided for an independence referendum at the end of the deal's transition period.

In recent months, some northern Sudan leaders have questioned whether that referendum can be held on time, fueling concerns there may be attempts to delay it. Southerners are widely expected to vote in favor of independence, splitting Africa's biggest country into two. Such a split would see a significant amount of Sudan's oil resources remain in the south, but the only route Southern Sudan can export such oil is through a pipeline and port controlled by the north.