South Sudan Experiment Headed Toward Failure

The World Bank, in a draft document reviewed by the independent Sudan Tribune, warns that South Sudan could collapse by its two-year anniversary because authorities in Juba were unaware of the consequences of one of its very first unilateral decisions. The South Sudanese government early this year, roughly six months into independence, expressed frustration with Khartoum's claims on revenue and halted the production of at least 75-percent of the regional oil. But with Khartoum controlling the export infrastructure, the move now seems to have backfired. Either South Sudan was unprepared politically for independence or it lacked appropriate guidance to manage its internal affairs. Either way, the future for the world's newest country looks incredibly grim.

South Sudan gained independence in July under the terms of a 2005 peace agreement that, with Washington's help, ended one of the bloodiest conflicts the world has ever known. Senior U.S. officials, from Princeton Lyman, the U.S. special envoy for Sudan, to Susan Rice, the U.S. ambassador to the United Nations, noted that several issues, including oil, were left in the negotiating table in favour of independence. Now left to its own devices after a successful July referendum, however, South Sudan decided to shut down production of the 75-percent of the oil reserves in the region in January in an effort to punish Khartoum.

According to a transcript of a World Bank meeting, nobody in the administration of South Sudanese President Salva Kiir was "aware of the implications of the shutdown," the Sudan Tribune reports. Even if South Sudan somehow found a way to get revenue from outside the oil sector, the World Bank estimates that its foreign reserves would run dry by July 2013. By that time, the newspaper quotes the briefing as saying, "state collapse becomes a real possibility."

Then what? Apart of rampant poverty, deadly cattle raids and defiance in the face of sweeping U.N. condemnations, what happens if South Sudan collapses? Was that future anticipated by the architects of the 2005 CPA? Are these the same architects who pressed for elections a year later in the Palestinian territories? Against the backdrop of the furore over Israeli settlements, the viability of the Hamas leadership in the Gaza Strip and increased partition is a quiet push for a one-state solution. Inter-system competition, the argument goes, diminishes the evolutionary benefits of intra-system competition. Maybe the same could be said for Sudan.

South Sudan doesn't have the means to get its oil out of the country without Sudanese pipelines. Using regional projects, like the Baku-Tbilisi-Ceyhan oil pipeline as a model, it would likely be 2020 before a similar pipeline would stretch from oil fields in South Sudan to a theoretical end point at the Kenyan port of Mombasa. Using the World Bank forecast of a state collapse by 2013, and given the protracted conflict in the region, any effort to build an oil pipeline from South Sudan would likely be for naught because by 2020, it will be too late. Given the strategic links between national security and oil wealth, and considering Palestine as something of a regional model, the Sudanese experiment in a two-state solution appears to be headed toward failure. Deadlines and benchmarks do little, apparently, when real issues are at stake.

By. Daniel Graeber of Oilprice.com