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Bolstering South Sudan’s Peace Deal
Bolstering South Sudan’s Peace Deal
Table of Contents
    1. Stepping up European Diplomacy
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

Commentary / Africa

Bolstering South Sudan’s Peace Deal

Amid growing regional unrest, a fragile peace deal brokered between the warring parties in South Sudan has not won a broader political settlement. In this excerpt from our Watch List 2019 for European policymakers, Crisis Group advises the EU to take a lead in negotiations and put conditions on its monitoring of the agreement.

Five years into a brutal civil war, South Sudan enters 2019 with fragile hopes for peace. A September 2018 agreement between the main belligerents, President Salva Kiir and rebel leader Riek Machar, brokered by Sudanese President Omar al-Bashir and Ugandan President Yoweri Museveni, has succeeded in curbing the fighting. That is reason enough to embrace the accord. But the deal is far more armistice than final settlement: it calls for negotiations between the warring parties that will lead to a unity government and, later, elections. An agreement along the same lines in 2016 proved short-lived, as the unity government collapsed barely two months after its formation. Moreover, the new accord appears at a time when Horn of Africa politics are in flux and leaders in the Inter-Governmental Authority on Development (IGAD), the regional bloc overseeing the peace process, are increasingly distracted by problems at home. International actors will need to push IGAD to see its mandate through. The U.S. – long the West’s diplomatic lead on South Sudan – has pulled back, leaving no immediate replacement to conduct this critical diplomacy.

The EU and its member states should:

  • Assume greater diplomatic leadership on South Sudan, building upon the extensive humanitarian aid Europe gives to the world’s newest state. The EU appears unlikely to appoint an additional envoy focused solely on South Sudan, but European diplomats could coordinate and step up their own shuttle diplomacy between regional capitals to keep implementation of the peace deal moving forward, while also exploring what a longer-term settlement might entail.
     
  • Condition any additional support for the Reconstituted Joint Monitoring and Evaluation Commission, the regional body that oversees the peace deal’s implementation, upon appointment of a strong commission chair; the EU’s continued support for ceasefire monitoring should be conditional on the timely release of ceasefire violation reports.

Stepping up European Diplomacy

South Sudan’s truce follows years of on-and-off mediation by IGAD, the Horn of African body that includes Sudan, South Sudan, Ethiopia, Kenya, Uganda, Somalia, and Djibouti. For years regional diplomacy was led by Ethiopia, supported by the EU and other partners. In June, however, new Ethiopian Prime Minister Abiy Ahmed relinquished his country’s grip over the deadlocked peace process to Sudanese President Omar al-Bashir. Bashir has greater leverage over both Kiir’s government and Machar’s rebels: the former depends on Khartoum to facilitate South Sudan’s oil exports; the latter have long relied on Khartoum for arms and financing. Bashir quickly struck a series of deals with Kiir to boost oil production, then enlisted Museveni to press his ally, Kiir, to grant Machar a return to the first vice presidency. Machar had held this office under the earlier version of the peace deal, from April to July 2016, and Bashir pressured him to accept the new terms.

While a deal exists on paper, and indeed has led to significant reductions in violence across much of South Sudan, many of its provisions appear unlikely to be implemented any time soon. Indeed, even its core elements remain contested. Perhaps the biggest obstacle and danger lies in still-to-be-determined transitional security arrangements – chiefly, how the parties will share security duties in a unity government and who would provide security to Machar were he to return to the capital Juba. In 2016, the U.S. and others urged Machar to go back to Juba before any such understandings were in place. His forces then clashed in the city streets with those of Kiir, ushering in a wider war as violence spread. The September 2018 deal specifies that the parties will assemble, train, and unify a force to deploy to Juba and form the core of a new national army; privately, however, Kiir’s representatives indicate they will not allow any of Machar’s forces back into the capital. Machar is unlikely to return until there is a clear understanding of the security arrangements, nor should he be pressured to do so.

Another challenge to the deal is the absence of an active international diplomatic lead [in South Sudan].

Even leaving aside the difficulty of fleshing out the agreement’s details, a wider challenge lies at its core. The deal is still predicated on power sharing between Kiir and Machar and a transition period of three years culminating in a presidential election, which both men are certain to want to contest. This same dynamic – the competition between the two men for the presidency – has been the principal driver of South Sudan’s war over the past five years. While it continues, it is unlikely that any agreement can offer a basis for a durable settlement. It also undercuts prospects of the two parties reaching agreement on other critical issues (such as security arrangements), given that they view those issues largely through the prism of how they impact the future presidential contest. There is no easy answer to this challenge in light of both men’s outsized influence. Indeed, efforts over the past two years to sideline Machar have failed, because he still commands authority over a large constituency in South Sudan. One remaining option, which a growing number of South Sudanese and some in the region support, is returning power to South Sudan’s three greater regions, which would decrease the stakes of the presidency by sharing power more broadly.

Yet another challenge to the deal is the absence of an active international diplomatic lead. From the early 2000s to 2017, the U.S. special envoy to Sudan (and, later, South Sudan) played this role, as de facto head of the so-called Troika – the U.S., the UK and Norway. Since Donald Trump’s election, however, the special envoy’s office has been vacant. True, even with an envoy, the track record of U.S. diplomacy on South Sudan was hardly a success. But without it, no diplomat from outside the region can maintain the attention of regional leaders, for whom ending South Sudan’s conflict is rarely a top-tier concern, on South Sudan’s peace process. The absence is particularly keenly felt now, given turmoil in Sudan and Abiy’s long list of other priorities. The U.S. may still appoint a new envoy, but even were it to do so there are strong signs the White House is tiring of its involvement in South Sudan; when announcing the administration’s new Africa strategy in December 2018, for example, National Security Advisor John Bolton singled out the country as an example of how U.S. assistance had failed.

Europe should consider how best it can fill this gap. In principle, the EU is well positioned to take on a larger diplomatic role, given Europe’s heavy investment in South Sudan’s stability and the generous humanitarian relief it provides to its people. That said, the EU appears unlikely to appoint an additional envoy dedicated solely to South Sudan. Another option might be for the EU to formalise a stronger partnership with the Troika to help shore up the deficit created by the U.S.’s diminished engagement. This coordinated diplomacy would not only seek to advance the existing peace process, particularly by seeking an agreement on security arrangements, but also test the waters on what a more durable settlement might look like.

South Sudan’s peace deal remains contested and incomplete; whether it provides a sustainable basis for ending the war is at best uncertain.

Beyond this diplomatic role, the EU and its member states should continue to support the Reconstituted Joint Monitoring and Evaluation Commission, the African-led body responsible for overseeing the peace deal’s implementation. It should also continue to fund the monitors, who are deployed under the auspices of another mechanism, the Ceasefire and Transitional Security Monitoring and Verification Mechanism, which reports to both the joint monitoring commission and directly to IGAD, to investigate ceasefire violations. However, support to both mechanisms should be conditional. First, the EU should demand that the ceasefire monitoring mechanism publicly report all ceasefire violations; in the past, the failure to publish the monitors’ findings meant that violating parties were spared any scrutiny or public and diplomatic pressure. Secondly, it should seek rapid appointment of a heavyweight joint commission chair, for example an influential former head of state, to ensure the body is effective. The previous chair, former Botswana President Festus Mogae, stood down in September 2018; that at this critical phase of the new peace deal the chair remains empty is a major concern.

South Sudan’s peace deal remains contested and incomplete; whether it provides a sustainable basis for ending the war is at best uncertain. Western donors supported a similar deal less than three years ago only to see it collapse, widening the war across the country and sparking a new phase of the civil war that forced hundreds of thousands more to flee the country. But it is worth the EU expending additional diplomatic capital to try and keep this agreement from suffering a similar, bloody fate. Its collapse could precipitate another round of fighting and further suffering for yet another generation of South Sudanese.