Bloomberg News

Sudan Braces for Protest, Violence as Oil-Rich South Secedes

July 08, 2011

(Updates with analyst comment in fifth paragraph.)

July 8 (Bloomberg) -- The secession of Sudan’s oil-rich southern region tomorrow may rekindle unrest over soaring prices and stoke violence in outlying regions against President Umar al-Bashir’s northern government in Khartoum.

“Austerity measures are likely to fuel discontent,” Jean- Baptiste Gallopin, the Control Risks associate analyst on the Middle East & North Africa, said in a phone interview from London. “Bashir is in a very tricky position.”

While the south’s independence ends a rebellion against Khartoum that lasted almost 50 years, northern insurgents are still fighting government forces in the western region of Darfur and unrest has exploded in recent weeks in other states such as Southern Kordofan. At the same time, the opposition in Khartoum is threatening to renew protests over spending cuts that were violently put down earlier this year.

Al-Bashir’s announcement in a televised speech yesterday that he was quitting negotiations in Addis Ababa, Ethiopia, to end clashes in the north’s only oil-producing state, Southern Kordofan, dashed chances of a quick cease-fire.

“His speech shows a president who is imposing his positions with force rather than using logic,” Fouad Hikmat, Brussels- based International Crisis Group’s special adviser on Sudan, said today by phone from Nairobi, Kenya. “There is a lack of strategic vision on how to deal with the challenges.”

War Crimes

The fighting in Southern Kordofan, which borders Southern Sudan, started when Sudanese troops tried to disarm members of the Nuba ethnic group who fought alongside the southern army during the civil war, according to Southern Sudan’s ruling party. Al-Bashir, 67, and his governor in Southern Kordofan, Ahmed Haroun, are wanted by the International Criminal Court over allegations they were involved in war crimes in Darfur.

Southern Sudan will assume control of about 75 percent of Sudan’s daily oil production of 490,000 barrels when it becomes independent. The crude is pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd and India’s Oil & Natural Gas Corp.

Clashes in Southern Kordofan, including artillery and aerial bombardments, have forced more than 73,000 people to flee their homes since June 5, according to the United Nations.

Aerial Bombardments

The state remains “tense” and “volatile,” the UN said yesterday. Heavy gunfire and aerial bombardments took place around the state capital, Kadugli, each day from June 30 to July 5, the UN Office for the Coordination of Humanitarian Affairs said in an e-mailed report.

Sudan’s army seized the main town in the nearby disputed border area of Abyei on May 21. While negotiators from the north and the south agreed last month to withdraw their forces and allow Ethiopian peacekeepers to deploy in the area, the pullout hasn’t happened.

The economy must cope with losing control of almost three- quarters Sudan’s current daily crude production. Oil provides about 45 percent of its revenue and most of its foreign currency earnings.

While the south will pay the north for the use of its export pipeline and port, al-Bashir has said his government is planning to follow up austerity measures, including the partial lifting of fuel subsidies, in January with new spending cuts to cope with the revenue loss. Sudan’s annual headline inflation rate rose to 16.8 percent in May from 9.8 percent in November.

Economic Growth

The country’s $68 billion economy will probably grow by 3 percent to 4 percent this year, central bank Governor Mohamed Khair al-Zubair said on June 29, lower than the budget’s target of 5 percent. The economy grew by 3 percent last year, half of the government’s target of 6 percent, al-Zubair said on June 13.

Sudan, which is denied access to international markets because of U.S sanctions, hasn’t been able to borrow from the World Bank since 1993 because it failed to make payments on its debt and has arrears of about $30 billion, according to the Washington-based Center for Global Development, an aid research group.

In northern Sudan, 46.5 percent of the people live under poverty line, on less than $1 a day, and 31.8 percent of children under 5 years are malnourished, according to the United Nations Development Programme.

“The disenfranchised are so ripe to be recruited against the center because people are desperate,” Hikmat said. “The hardships of life are going to be more serious.”

Arab Uprising

The government used police armed with sticks and rubber truncheons to put down protests from January to March, inspired by uprisings in North Africa and the Middle East. Rabie Abdel Ati, a senior member of al-Bashir’s National Congress Party, said the government wouldn’t tolerate future demonstrations that it didn’t approve.

“Rules will be stricter than previously; there is no real presence for these opposition groups on the ground,” Abdel Ati said June 6 in a telephone interview. ”Protests will be allowed if they get legal authorization.”

The Popular Congress Party and other opposition groups say they are planning street protests ”to topple the regime” after July 9.

”We have no option; elections are rigged,” Kamal Omar, the party’s political secretary, said July 6 by phone from Khartoum. “So we started preparations to take to the streets.”

--Editors: Karl Maier, Philip Sanders

To contact the reporter on this story: Maram Mazen in Khartoum at mmazen@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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