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A Short Window to Resuscitate South Sudan’s Ailing Peace Deal
A Short Window to Resuscitate South Sudan’s Ailing Peace Deal
Report 186 / Africa

China’s New Courtship in South Sudan

Following its oil interests and other opportunities to Juba, China is building a new relationship with South Sudan but finds itself drawn into a dangerous dispute that risks bringing the Sudans back to conflict.

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Executive Summary

In the wake of Sudan’s partition, Beijing has accelerated a re-orientation of its engagement in the resulting two states, most significantly through a new courtship in Juba. China’s historical support for Khartoum left a sour legacy in the South, but the potential for mutual economic benefit means a new chapter in bilateral relations is now being written. Balancing new friends in Juba with old friends in Khartoum, however, has proven a delicate dance. China has been drawn into a high-stakes oil crisis between the two, the consequences of which may temper an otherwise rapidly expanding relationship with Juba. A sustainable solution to the crisis cannot be achieved in isolation; North-South stability, mutual economic viability and the security of Chinese interests will also depend on answers to other unresolved political and security issues, including in Sudan’s marginalised peripheries. The future of Beijing’s dual engagement, and the kind of relationship that emerges in the South, will depend in part on how the oil standoff – and this broader reform agenda – are confronted.

As South Sudan prepared for its 2011 self-determination referendum, China recognised the increasing inevitability of independence. Eager to maintain stable relationships and the continuity of its oil investments – now situated primarily in the South – its stance evolved to reflect changing political realities. Beijing is keen to preserve and expand its footprint in South Sudan’s oil sector, but Chinese companies are also flocking to other sectors, above all to build infrastructure in a country that has almost none.

China’s cultivation of new political and economic relations has been most visible in the surge of bilateral exchanges with Juba over the last year, which is expected to be capped in the coming weeks by President Salva Kiir’s first visit to Beijing as head of state. As they seek to build bridges with the South, the Chinese are keen to draw comparisons with their own experience of economic transformation and rapid rural development, as well as to emphasise a sense of shared historical experience at the hands of imperial powers.

South Sudan is very much “open for business”, actively seeking foreign direct investment from West, East, and everywhere in between. Historical ties may be strongest with the West, but Juba has made clear that if the Chinese are first to come and partner in developing the new nation, they will not hesitate to welcome them. Furthermore, China’s “no strings attached” political approach and economic cooperation model is as attractive in Juba as it has proven elsewhere on the continent, not least in resource-rich states eager to develop fast.

As Juba opens up to new investment, it should take two critical factors into consideration. First are potential correlations between the economic partnerships it forges, the character of the state that emerges and its foreign policy. While it hopes to remain politically aligned with the West, time will tell whether expanding economic partnerships with China or others will have a gravitational effect. For now, it wants to welcome, and leverage, the interest of all actors.

Secondly, in the midst of a mounting budget crisis, Juba must consider how to secure and direct investment so as to best serve its development agenda, calm its own domestic insecurity and prevent even greater state fragility. It must actively shape new economic relationships rather than become a passive recipient of foreign-authored investment. Given limited government capacity and an untested legislative framework, its economic planners must take care to harness such investment for its own benefit, lest Africa’s newest state be overrun in a resource scramble.

The number of Chinese nationals and commercial actors in Juba has spiked dramatically in the nine months since independence. Beyond oil, Chinese companies are most interested in infrastructure, and South Sudan needs everything: roads, bridges, telecommunications, power plants, electricity grids, schools, hospitals, municipal buildings, water treatment facilities, dams and irrigation systems and new oil infrastructure. Companies are registering, conducting feasibility studies, and drafting proposals, but major deals are yet to be landed. Though China’s central government often plays a role in helping secure market access, Chinese engagement in South Sudan is not monolithic. Private businesses and small-scale entrepreneurs are driving new investment as much as the state.

Some of Juba’s elite remain hesitant about putting too many eggs in one basket, and even those most eager to secure a major economic partnership argue there will be no Chinese monopoly. Beijing affirmed in January 2012 its intent to offer an economic package, including development grants and a possible billion-dollar infrastructure loan, and details are being negotiated. But new uncertainty over the future of Juba’s oil sector and continued North-South instability have altered the equation and may reduce the total offered in the end. Given the greater variety of financing opportunities now available to Beijing’s government “policy” banks and thus an increased sensitivity to risk, the scale of a loan may not match those extended to other resource-rich African states. Chinese companies will actively pursue contracts in any case, though most would prefer the loan financing that normally ties contracts to Chinese firms.

The budding bilateral relationship has strained of late, as Beijing has been drawn uncomfortably into the oil dispute between North and South. An African Union (AU) team, backed by the UN and other partners, continues to facilitate talks between the parties. Tense negotiations on security, borders, citizenship, financial arrangement and the export of oil have yet to yield concrete agreements and are complicated by ongoing conflict in Sudan’s border states. The impasse led to a shutdown of the oil sector in early 2012 that has imperilled both economies and prompted renewed war rhetoric. Most remaining oil is now in the South, but the predominantly Chinese-built infrastructure to exploit it – pipelines, refinery and export terminal – is in the North. Given comparatively modest proven reserves, oil imports, whether from North or South, no longer occupy the significant position in China’s global energy strategy they once did. But given the considerable investment in developing and operating the oil sector, the Sudans remain important for China National Petroleum Company (CNPC), the state-owned oil giant, and thus a focus for the government.

As negotiations toward a North-South oil deal foundered dangerously in late 2011, the role of China came centre stage, and many in the international community (and in the two Sudans) thought Beijing would be forced to intervene. Juba wanted help in pressuring Khartoum to cut a reasonable deal, and when the North began to confiscate Southern oil instead, it interpreted China’s inaction as passive complicity and moved to leverage its increasingly uncomfortable position.

At the same time, Chinese-led oil consortia were engaged in their own set of negotiations with Juba over the transition of oil contracts previously held by Khartoum. The financial terms were retained, but significant changes were made to strengthen previously neglected social, environmental, and employment standards. In light of the heated row with Khartoum, Juba also bargained hard to include measures that would bring oil company interests in line with its own and secure considerable legal rights and compensatory protections in the event of an oil-sector shutdown. It also secured discretion over the post-shutdown extension of contracts based on, among other things, companies’ cooperation in helping resolve the impasse with Khartoum. The interplay between the parallel negotiations added another dimension to China’s increasingly complicated position.

Both sides, as well as many international actors, assumed China would weigh in more assertively, though perceptions of Beijing’s influence and readiness to employ it were unrealistic. The shutdown of the oil fields, abduction of Chinese construction workers in Southern Kordofan and expulsion of the head of a Chinese-led oil consortium added to Beijing’s vexing political problem and generated anxiety among Chinese nationals in North and South. Both Sudans continue to try to pull China into their respective corners, but Beijing has resisted taking sides, as its principal objective remains balanced relations with North and South.

That said, many – including in Beijing – argue China can and should do more to ensure peaceful resolution, without compromising its interests or traditional adherence to a principle of non-interference. A recent shift in the North-South negotiation presents a possible new entry point for the international community, including opportunities for China to help break the deadlock, ease its own position and bolster stability within and between the two states. Beijing has shown signs of new engagement in recent weeks, but the comparatively weak domestic status and limited resources afforded to the foreign ministry must also be considered. China’s diplomatic capacity does not always reflect the powerful position the country enjoys on the world stage.

The oil impasse may temper the pace of Chinese engagement in the South but is unlikely to stall it. Angered by its sense that China still “treats it as a province rather than an independent state”, Juba will continue to make demands, particularly with regard to management of its oil sector. But if managed pragmatically, the opportunities for mutual economic benefit should trump episodic tensions. China’s new expedition in the South and its attempt to balance relations with the two Sudans have proven tricky tasks, however, that will continue to challenge the boundaries of its foreign policy.

Juba/Beijing/Nairobi/Brussels, 4 April 2012

South Sudan's President Salva Kiir and opposition leader Riek Macharshake hands after talks on South Sudan's proposed unity government with Uganda's President Yoweri Museveni at State House in Entebbe, on November 7, 2019. AFP/Michael O'Hagan
Statement / Africa

A Short Window to Resuscitate South Sudan’s Ailing Peace Deal

A negotiated 100-day extension for naming a unity government has averted a crisis imperilling a ceasefire between South Sudan’s main belligerents. Regional leaders should use the time to pressure them to agree on how to divide the country into states, an essential step for peace.

On 7 November, President Salva Kiir and armed opposition leader Riek Machar agreed to a second extension of the deadline for forming a unity government, a requirement of their September 2018 agreement aimed at ending South Sudan’s six-year civil war. The 100-day deferral, brokered at an emergency summit in Uganda, comes after a six-month delay in May. Importantly, it keeps alive the war’s longest ceasefire. But it does not bring the two sides closer to resolving their core differences. One issue that is critical to breaking the impasse is an agreement on the number and boundaries of states, which set the distribution of power across the country. Absent such an agreement, Kiir and Machar may have little incentive to form a unity government or to strike final bargains on unifying the army and security arrangements in the capital Juba. Mediators from Uganda, Sudan and Kenya should step up efforts to forge a deal on states. If they cannot do so before January, the new extension’s midpoint, other African leaders should step in. If the two sides cannot agree on states, they risk sliding back into war.

The extension of the deadline for the unity government’s formation was necessary but does not in itself guarantee progress.

The extension of the deadline for the unity government’s formation was necessary but does not in itself guarantee progress on the 2018 peace deal’s implementation, as Crisis Group made plain several weeks ago. Mediated by Uganda’s President Yoweri Museveni, Sudan’s Sovereign Council chair General Abdel Fattah al-Burhan and Kenya’s envoy Kalonzo Musyoka at a Tripartite Summit attended by Kiir and Machar, the deferral preserves a ceasefire that has largely ended five years of war. Thanks to the truce, South Sudanese enjoy more freedom of movement and better access to their fields and humanitarian aid. Rushing the unity government while the parties remained so far apart on key issues – crucially, those of states and internal boundaries, army reform and security arrangements in Juba – could have risked the ceasefire’s bloody collapse. Yet making progress now requires effective diplomacy from outside high-level mediators whose limited engagement over the past year gives little cause for optimism.

A Short Window to Resuscitate South Sudan’s Ailing Peace Deal

Crisis Group's Senior Analyst for South Sudan Alan Boswell recounts what he found during his field trip to South Sudan and touches upon Crisis Group's recommendations for this 100-day period. CRISISGROUP

The question of states and boundaries is one immediate stumbling block. Outstanding issues on the army are important and will likely be difficult to resolve, but the parties have agreed to a roadmap, even if it needs amending. Joint security committees established by the 2018 peace deal are operating and surprisingly collegial and there does not appear to be an absolute impasse. In contrast, on states and boundaries, discussions are deadlocked; committees created to resolve the issue have failed and disbanded. Security arrangements in Juba are also critical, as Crisis Group has previously underscored, given that the capital has been a flashpoint in the past and because Machar will not go back without his security ensured. But negotiations on that issue are, in essence, on hold, largely because Machar almost certainly will not return to the capital absent a deal on states and boundaries. If the two men can strike such a deal, then the road to a unity government becomes clearer and pressure will mount to resolve outstanding issues related to the army and Juba security. A priority for international mediators should be to unlock the states and boundaries question.

Both Kiir and Machar bear responsibility for creating that dispute.

Both Kiir and Machar bear responsibility for creating that dispute. In 2011, when South Sudan became an independent nation, it had ten states. State governors wield substantial power, access to resources and influence over political appointments down to the local level. Powerful allies of both Kiir and Machar, who at the time was Kiir’s vice president, wanted to increase the number of governors so as to widen the pool of spoils. In turn, state boundaries matter a great deal, as they can determine which ethnic group dominates each state and benefits from its resources, including oil. In 2014, after the civil war began, Machar called for redividing the country into 21 states. Kiir subsequently redrew the map to divide it into 28, and later 32, states, carved up to favour his political base.

The 32-state configuration is a source of great aggravation to Machar and many of his fighters. Rebel hardliners view it as surrender for Machar to join a unity government so long as that configuration remains in place. Meanwhile, some armed groups in Machar’s coalition vow to keep fighting if there is no change to specific boundaries, which they believe have been used to apportion their land to other groups. The most bitter of these disputes is over control of Malakal, a city in South Sudan’s north east that was once one of its three administrative capitals. Since Machar is the weaker party, his commanders know that he will have little leverage once in government to win concessions on states or boundaries. For this reason, he is unlikely to join a unity government absent a new deal on those questions. Nor, indeed, should diplomats attempt to force him to do so: were that to happen, the new government would immediately deadlock over the issue and Machar’s coalition might splinter, leading to renewed but more fragmented conflict.

If pressed hard enough, Kiir could budge from the 32-state configuration.

There could be a way to break the impasse. Many insiders to whom Crisis Group has spoken believe that, if pressed hard enough, Kiir could budge from the 32-state configuration, especially if mediators made clear that intransigence would mean he would shoulder much of the blame should the peace deal collapse over this issue. Machar has also said in private that he is not wedded to a specific number of states so long as he is not forced to accept the status quo.

Nor do the stickiest boundary disputes, especially over Malakal and its surrounds, need to hold up the process. The two sides could settle on a compromise on the number of states, even as a temporary arrangement. At the same time, they could bracket for later the most contentious boundary disputes, like those around Malakal, while setting in place a process for addressing them. This workaround would offer those of Machar’s fighters who are primarily concerned with boundaries a genuine alternative to perceived surrender or a return to war.

The roadmap the two sides have agreed upon is unrealistic, underfunded and fraught with logistical delays.

With an agreement on states and boundaries and a unity government in sight, mediators are more likely to make progress on the other major obstacles: a reasonable timetable for unifying a government and rebel armed forces into a single national army and security arrangements in Juba. On the former, Kiir and Machar have made some progress on a technical deal that would unify a first batch of 83,000 fighters and, as noted, commissions charged with advancing army reform are functioning. But the roadmap the two sides have agreed upon is unrealistic, underfunded and fraught with logistical delays. Kiir’s government is justifiably concerned that Machar is using cantonment – a process the 2018 peace deal lays out for assembling and registering his forces – to amass fighters. Bolstering rebels’ ranks jeopardises the peace process, because Machar could draw on more forces if the ceasefire collapses and because Kiir’s camp may refuse to integrate such a large number of opposition loyalists into the military. For their part, Machar and his allies fear that Kiir will renege on pledges to bring in their forces.

Work toward an agreement on the army should not sit still even if international mediators are focusing primarily on states and borders. Machar will need to make compromises – involving a more realistic timeline, rigorous screening of his forces to reduce the number of new recruits and a reasonable ceiling for the number he can bring into the army – and he is unlikely to do so until the states and boundaries questions are resolved. At the same time, Kiir needs to show that he is committed to integrating opposition contingents. Important first steps would be releasing funds for army unification and making progress on creating new joint units.

Settling the issue of states could also facilitate resolving the question of Machar’s personal safety in the capital. Negotiations over that issue will likely only commence in earnest once Machar believes he has the go-ahead to return to Juba from his coalition, which requires a deal on states. That said, some preparatory steps could help. The UN Security Council could, for example, consider mandating the UN Mission in South Sudan or request assistance from regional states to offer Machar third-party protection. This would prevent him from using his safety as the rationale for returning with a large opposition contingent, as he did in 2016; fighting subsequently erupted in Juba between his and Kiir’s fighters. Kiir has reportedly indicated that he would accept third-party protection, presumably since it would allow him to maintain military hegemony in the capital. African and Western diplomats will likely need to pressure Machar to do so, though he is unlikely to consider such an offer until he is ready to form a unity government and once his own negotiations with Kiir over the issue reach an impasse.

The costs of failing to resolve key disagreements are rising.

The costs of failing to resolve key disagreements are rising. The ceasefire is unlikely to indefinitely survive without forward momentum and if South Sudanese on all sides lose hope in the peace deal. Moreover, despite the benefits that the ceasefire has brought much of the country, conflict still rages in parts of the Central Equatoria and Western Equatoria regions between the government and rebel leader Thomas Cirillo, who is not a signatory to the peace agreement. Consolidating the 2018 peace deal’s gains would allow international actors to focus on pressuring Kiir and Cirillo to negotiate an Equatorias ceasefire.

An accord between Kiir and Machar – first on states and then on security arrangements – will require concerted diplomacy. That Uganda’s President Museveni and Sudan’s Burhan brought Kiir and Machar together for the 7 November meeting is encouraging albeit overdue: it was the first such high-level mediation this year even as the peace deal stalled. This track must be sustained. These leaders should schedule another high-level meeting by early January, the midway point set for reviewing progress; that meeting should focus on brokering a way forward on the configuration of states so as to break the impasse. Mediators, working with South Sudanese civil society delegates to the peace process, should begin drafting compromise plans to put before the two leaders to get talks started.

Regional states should set aside their remaining divisions and pressure the South Sudanese parties to find common ground.

If this fails, others need to step up. The Intergovernmental Authority on Development (IGAD) should call a wider heads of state summit to resolve the issue. The sub-regional bloc itself has been divided over several issues, including its leadership succession, quarrels over which have repeatedly postponed a summit. Now that Sudan has assumed the chair from Ethiopia, these disagreements are over. Regional states should set aside their remaining divisions and pressure the South Sudanese parties to find common ground. For their part, the so-called C5 group of African nations, which is chaired by South Africa, also comprises Algeria, Chad, Nigeria and Rwanda, and was mandated by the African Union to support IGAD’s efforts, should press IGAD members to convene a summit and Kiir and Machar to reach an agreement on states and boundaries. Donors led by the U.S. and the EU should do the same.

Both Kiir and Machar face dangers in continuing to stall in forming a unity government, even after this second, 100-day reprieve. The pressure on Machar’s cash-poor coalition will only mount if he remains outside Juba as Kiir’s regime rakes in oil revenue. The longer the deadlock persists, the likelier more defections and a split in Machar’s rebel forces. Kiir, meanwhile, will face renewed isolation if war breaks out. Indeed, officials from the U.S., South Sudan’s largest donor and historical partner, are losing patience with him and Machar and say they are inclined to re-evaluate relations and impose sanctions on key individuals in both camps.

Both men may be nearing their last chance to make peace together in the country they helped birth.

To bolster mediation efforts, Washington could respond to calls from Congress to nominate a special envoy to South Sudan senior enough to conduct high-level shuttle diplomacy in the region and augment the efforts of U.S. allies in the so-called Troika, the UK and Norway, which already have their own envoys. The AU Peace and Security Council could also outline to Kiir and Machar that they would face punitive measures, including targeted sanctions, if they fail to reach an agreement. The Council threatened to move toward sanctions last year; the parties signed the peace deal soon thereafter.

Both men may be nearing their last chance to make peace together in the country they helped birth. Kiir, as the stronger party, is well able to absorb the costs of peace; his close advisers should encourage him to do so. Machar’s allies should press him, too, to make this peace deal work, since he may not get another shot at helping lead the country. There is a path forward, should they choose to take it.