Wednesday, June 06, 2012

Sudan-South Sudan: The Two Sudans on the Brink

Source: ISN

The Two Sudans on the Brink

South Sudan's messy separation from the North has provided the perfect conditions for conflict between the new neighbors. Oil pipelines and production set the scene for the most recent source of tension.

Prepared by: Richard Downie
There are fears that Sudan and South Sudan are edging closer to all-out war. The latest crisis has been precipitated by a dispute over oil, which propels the economies of both countries. South Sudan broke away from Sudan to become an independent nation in July 2011 but has been unable to agree on terms for using the North’s oil pipeline, its only route to selling its oil. The dispute escalated in January, when South Sudan shut off production entirely rather than pay what it said were exorbitant fees to transport its oil through Sudan. A military confrontation quickly ensued, which culminated in the seizure by South Sudan’s army of the main oil field controlled by the North, Heglig, on April 10. In a speech to party supporters, President Omar al-Bashir of Sudan said that efforts to retake Heglig would “not be the end, but the beginning.” He pledged to “liberate” South Sudan from its government.

Q1: What explains the latest fighting?

A1: The failure of both countries to agree on the terms of their separation is at the heart of this dispute. Although South Sudan reached independence peacefully last year, the outcome was achieved by putting off negotiations on a long list of contentious issues. They included demarcating the common border and establishing citizenship rights for Southerners living in the North and vice versa. But top of the list was how to jointly manage the oil industry, which accounts for 98 percent of revenue in the South and is the main source of income in the North. When negotiations resumed last fall, both sides adopted intransigent positions, and the talks quickly broke down. Exasperated by the failure to reach a deal and moves by Khartoum to confiscate some of its oil before it could be exported, the government of South Sudan (GoSS) took the fateful decision to shut down production entirely.

Layered on top of the diplomatic impasse was a deteriorating security situation on both sides of the border. GoSS blamed Khartoum for fomenting a succession of damaging rebellions within its borders. Meanwhile in the North, a series of conflicts have quickly gotten out of control, mostly in border regions populated by groups whose sympathies lie with the South. In keeping with previous patterns of behavior, the regime in Khartoum has reacted with indiscriminate force, killing civilians and displacing communities. This response has only served to motivate the rebels. Worryingly for the regime, disparate groups in Southern Kordofan, Blue Nile, and Darfur are beginning to coordinate their operations. Last November they announced the formation of the Sudan Revolutionary Front and declared their intention to topple President Bashir from power. Khartoum has long suspected, with some justification, that the Sudan Peoples’ Liberation Movement (SPLM) government in South Sudan is assisting these rebels. This rising tide of mutual hostility, combined with the punishing economic costs of the oil shutdown and the aggressive posturing of two ill-disciplined armies, made a military confrontation more likely. Nevertheless, the decision by Southern forces from the Sudan Peoples’ Liberation Army (SPLA) to occupy an oil field that is widely regarded as lying within Northern territory was a major escalation. South Sudan now finds itself in the unusual position of being painted as the aggressor, while Sudan’s demand that Southern forces immediately withdraw from Heglig has been backed by the international community, including the United States.

Q2: What are the prospects for ending the fighting in the near term?

A2: Not good. The hotheads seem to be driving policy on both sides of the border. Emotions are running high, and recent statements, such as the one issued by President Bashir, are throwing kerosene on the flames. For the time being, neither side is showing much inclination to step back from the brink or suggest a realistic basis for negotiations. A spokesman for GoSS, Barnaba Marial Benjamin, said the South will not withdraw its forces from Heglig unless the fighting stops, the African Union acts as guarantor of a cease-fire, Sudanese forces withdraw from the contested border region of Abyei, and an agreement on demarcating the border is reached. It is unlikely these demands will be met in the near term. For its part, Khartoum’s current strategy does not appear to extend beyond winning Heglig back by force.

Q3: What can the United States do to stop the fighting?

A3: The United States, in common with the rest of the international community, is in the frustrating position of having to watch from the sidelines while the peace unravels. Special Envoy Princeton Lyman is engaged in shuttle diplomacy, visiting both Juba and Khartoum this week, but the reality is that the United States has limited capacity to influence events. Long-standing sanctions against the National Congress Party (NCP) regime in Khartoum curtail his ability to engage with the northern leadership, but in any case, NCP has never been inclined to listen to anything the United States has to say. In theory, the United States has more leverage over the South, which it backed during the long years of Sudan’s civil war and which it continues to supply with desperately needed economic and technical support. So it is a matter of considerable frustration and some annoyance to Washington that Juba shows just as little willingness to listen to US appeals as do its counterparts in the North. Nevertheless, US pressure on Juba to moderate its behavior remains the best potential avenue for ending the crisis. Perhaps Washington would have had more traction with its friends in South Sudan if it had previously been more forceful in pushing for responsible governance in return for its economic and diplomatic largesse. China is perhaps one of the few countries that can wield influence on both sides of the border. Its investments in the oil industry mean it has an economic stake in restoring peace. China does not publicize its diplomatic activity, but it would not be a surprise if Beijing were putting pressure on Khartoum and Juba behind the scenes. A planned visit to China by President Salva Kiir of South Sudan later this month may provide an added opportunity.

Q4: Is the fighting likely to have an impact on global oil prices?

A4: Logic would suggest not. As oil producers, the two Sudans are small players in the overall picture. Of the two countries, South Sudan has 70 to 75 percent of the oil. It was pumping 350,000 barrels per day (bpd) before shutting off production in January, a move that barely caused a ripple on world markets. That leaves Sudan, which produces approximately 115,000 bpd. The Southern occupation of Heglig, its largest oil field, has dented output, although to what extent is unclear. Heglig was producing 60,000 bpd before the latest fighting, and officials had previously stated that production stopped entirely following its seizure. But in a statement on April 18, Sudan’s oil minister said production had only fallen by 40,000 bpd overall and that some of Heglig’s oil had been “diverted.” Regardless of the true figures, the disruption of Sudan’s oil production is unlikely to have a global impact, although its effect on the domestic economy is likely to be very serious indeed.