Can Sudan Manage Economic Discontent amid Volatile Geopolitics?
Can Sudan Manage Economic Discontent amid Volatile Geopolitics?
Prime Minister of Ethiopia Hailemariam Desalegn (C), President of Egypt Abdel Fattah el-Sisi (R) and President of Sudan Omar al-Bashir (L) attend a meeting on Nile dam talks in Addis Ababa, Ethiopia on 29 January 2018. ANADOLUAGENCY/Minasse Wondimu Hailu
Commentary / Africa

Can Sudan Manage Economic Discontent amid Volatile Geopolitics?

Facing an economic crisis at home, Sudanese President Omar al-Bashir has avoided picking sides in the spat between Gulf powers. But friction with Egypt and divisions in the Gulf have made such flexibility in regional relations more difficult to achieve.

There was guarded hope in Khartoum when the U.S. government removed many of its economic and trade sanctions on Sudan in October 2017. Officials thought Washington would move forward with normalising relations, the next step being to strike Sudan from the U.S. State Sponsors of Terrorism list. That would allow the Nile basin country to obtain relief from its $50 billion international debt and attract external investment, both of which are essential for saving Sudan’s failing economy.

The economy has hit rock bottom. It remains crippled by the loss of millions in annual oil revenue since South Sudan seceded in 2011. After a new budget was announced in early January 2018, which included the devaluation of the Sudanese pound against the dollar, inflation spiralled upward. Bread prices also more than doubled after cuts to subsidies on wheat imports.

The runaway prices, along with anger at the mismanagement of the economy and corruption sparked protests in January 2018, resulting in hundreds of arrests – including of several opposition politicians. Police beat protesters, killing at least one. Following pressure from the U.S. and European Union some of the detainees were released a few days ago. Many others remain in prison without charge.

Khartoum’s optimism for a quick normalisation of its relations with the U.S. after economic sanctions repeal was premature. Indeed, the U.S. had been clear that this would not happen without further tangible progress from the Sudanese government, including improvements to its human rights record.

In November 2017, U.S. Deputy Secretary of State John Sullivan travelled to Khartoum, reiterating that phase two of U.S. engagement, which would lead to further lifting of sanctions – including removal of Sudan from the terrorism list – would require Khartoum to make such reform.

Khartoum Plays the Field

Since then, Khartoum has signalled that it can look for support elsewhere. Shortly after Sullivan’s visit, President Omar al-Bashir flew to Moscow, where he secured a deal from his counterpart Vladimir Putin to buy Russian wheat at a discounted rate. Bashir also caused consternation in Washington by declaring his support for Russia’s intervention in Syria and criticising U.S. Middle East policies.

Sudan’s leaders view rapprochement with the U.S. and other Western countries, as well as with the European Union, as critical in the long term.

Sudan’s leaders still view rapprochement with the U.S. and other Western countries, as well as with the European Union, as critical in the long term. But in the meantime, the regime needs to cultivate friends who can help it fend off immediate threats, notably those related to its lagging economy. In this spirit, Bashir has adapted to an increasingly thorny geopolitical landscape, both in the Horn and beyond, by moving from one alliance to another, juggling rivalries among his potential allies. This has delivered some gains to his government, but they are likely to prove short-term at best.

Nowhere is this strategy more evident than in Sudan’s relations with the Gulf states, particularly Saudi Arabia, the United Arab Emirates (UAE) and Qatar. Enticed by promises of money for infrastructure and agriculture development, as well as deposits in the Sudanese Central Bank, Sudan – a close ally of Iran during the 1990s and early 2000s – switched its allegiance to the Arab Gulf bloc in 2014. The biggest consequence of this realignment was Khartoum’s dispatch of thousands of troops to Yemen to join the Saudi-led coalition fighting the Huthi rebels.

Khartoum is disappointed, however, with the financial rewards it has received in return, despite also benefitting from Saudi lobbying of the U.S. over sanctions repeal. In mid-2017, when tensions escalated between Qatar and the Saudi-UAE axis, Khartoum chose not to break with its longstanding ally in Doha, preferring to keep its options open.

Tensions with Egypt

Sudan’s relations with Egypt, its neighbour to the north, are also strained. A December visit of Turkish President Recep Tayyip Erdoğan – a close ally of Qatar – to Khartoum brought simmering tensions out into the open. Erdoğan announced $650 million in investments, including a Turkish commitment to restore and lease the Ottoman-era Red Sea port on Suakin Island.

Turkey’s sudden interest in Sudan is of particular concern to Cairo as both Doha and Ankara support various chapters of the Muslim Brotherhood across the world. Since Abdel Fattah el-Sisi seized power in July 2013 from President Mohamed Morsi, a Muslim Brotherhood leader, Cairo has presumed the Bashir regime to be close to the Islamists. Its willingness to allow Muslim Brothers expelled from Egypt to visit Sudan is a sore spot for Sisi.

A banner celebrating the visit of Turkish President Recep Tayyip Erdoğan to Sudan on the River Nile bridge between Khartoum and Omdurman, on 17 February 2018. CRISISGROUP/Magnus Taylor

A graver diplomatic problem is Sudan’s perceived divergence from Egypt’s opposition to the Grand Ethiopian Renaissance Dam, which Ethiopia is building on the Blue Nile. Khartoum claims neutrality in negotiations over the dam, but in reality has developed its own distinct position that departs from its earlier support for colonial-era agreements on the allocation of Nile water, which heavily favour Egypt.

Sudan will benefit from the dam’s construction: it will supply the country with cheap electricity, as well as Nile water for greatly expanded agricultural irrigation, particularly in Blue Nile state. Such ambitious plans worry Cairo, which sees upstream projects as a major threat to its own water supply and, therefore, its stability.

Sudan’s economic crisis increases pressure on President Bashir at home as regional politics are becoming ever more complex.

The ongoing war in Libya has caused tensions too. Khartoum is concerned that Darfuri rebels, now based in southern Libya, have served as mercenaries for General Khalifa Haftar, de facto ruler of Libya’s east, who is backed by Egypt and the UAE. In return, the rebels have received money, guns and equipment, which Khartoum fears they will use to restart their rebellion. When Sudanese Liberation Movement insurgents briefly re-entered Darfur (from both Libya and South Sudan) in May 2017, Khartoum angrily accused Cairo of arming them.

Escalation in Eritrea

These frictions came to a head in January 2018 when, amid the economic crisis, reports emerged that Egypt had deployed troops in Eritrea (it appears now that Cairo sent only a small number of advisers and trainers). In response, Khartoum closed the border with Eritrea, declared a state of emergency in the region and deployed additional militia forces to the area without entirely explaining why. It may have been a ploy to divert public attention from worsening economic woes.

A meeting between Presidents Bashir and Sisi on the margins of the African Union summit in Addis Ababa in late January, followed by a visit to Cairo by the Sudanese foreign minister in early February, helped de-escalate tension. But they have done little to address the disagreements underpinning it.

With the dividends of U.S. engagement still mostly unpaid, Khartoum’s foreign policy will likely continue to evolve with shifts in relations among richer and more powerful players. Sudan’s economic crisis increases pressure on President Bashir at home as regional politics are becoming ever more complex. Recent shifts of key regime figures, including at the helm of the powerful National Intelligence and Security Services, show that the president is keen to shore up his own position.

Khartoum’s international standing is higher than it was some years ago, when it was a near pariah due to the atrocities of wars in Sudan’s peripheries, and it has long proven adept at navigating choppy geopolitical waters. But its ability to do so is likely to be tested further over the coming months.

Internally displaced persons (IDP) fleeing from tribe clashes in Balela locality arrive at Kalma camp in Darfur, Sudan, on 24 July 2017. REUTERS/Mohamed Nureldin Abdallah
Briefing 128 / Africa

A New Roadmap to Make U.S. Sudan Sanctions Relief Work

By 12 October, Washington will decide whether the steps Sudan has taken qualify it for lifting some U.S. sanctions. But to push forward afterwards will require a new roadmap that ties further sanctions relief and improved bilateral relations to political reform and human rights.

By 12 October, the U.S. will decide whether to permanently lift economic and trade sanctions it suspended since January 2017. As Crisis Group argued in its June 2017 briefing, Time to Repeal U.S. Sanctions on Sudan?, the administration faces a hard choice, but on balance lifting those sanctions remains the wiser course. Many disagree, raising concerns about any move that might appear to rehabilitate President Omar al-Bashir or suggest an easing of pressure on Khartoum to improve its human rights record. But the benefits to conflict prevention and humanitarian access attributable to Sudanese performance under the so-called “five-track plan” represent a tangible, if modest, step in the right direction. They are too important to let slip away by returning to an outdated sanctions regime. If it were to decline to lift sanctions now, the U.S. risks losing considerable future leverage with Sudan and reinforcing Khartoum’s deep-seated belief that Washington cannot be relied upon to honour its commitments.

Should the administration decide to lift the sanctions, however, such a decision ought to be viewed not as the end of a conversation about the future of U.S.-Sudan relations, but rather as its beginning. Washington should use the remaining sanctions to encourage further positive steps, both on areas covered by the existing roadmap for improved relations and on new ones, including notably political reform and human rights. In other words, the usefulness of a repeal decision only can be fully realised (and its risks appropriately managed) if the U.S. follows up with an approach aimed at pressing Sudan for more progress. This in turn will require empowering a senior U.S. official of appropriate stature and background who will be responsible for the next phase of this effort.

In January 2017, the U.S. announced that it would suspend certain specified sanctions against Sudan based on positive actions that President Bashir’s government had taken over the preceding months, and would repeal them permanently if progress were sustained over the subsequent six months. This decision marked the culmination of a policy of cautious engagement since 2015, after decades of hostile relations.

Washington defined criteria for lifting sanctions along five tracks: Sudan’s cooperation on counter-terrorism; addressing the threat from the Lord’s Resistance Army (LRA); ending hostilities in the “Two Areas” (South Kordofan and Blue Nile) and Darfur; improving humanitarian access to those areas; and ending negative interference in South Sudan. Last June, Crisis Group argued that although Khartoum’s progress on some of these was at best partial, it had done enough to warrant the permanent lifting of suspended sanctions. It also argued that failure to lift the sanctions risked undercutting those in Khartoum pushing for reform along the lines of U.S. demands and playing into the hands of hardliners.

The U.S. administration instead opted last July to delay its decision for three months. Although angered by the decision, Sudanese officials – pressed by their Gulf allies, Saudi Arabia in particular – stuck to the process, encouraged by belief that the delay at least in part reflected the U.S. administration’s Africa team was not fully in place and by hope that this delay would be the last. Officials in Bashir’s government who say they counselled patience in Khartoum claimed to Crisis Group that they faced an uphill battle but their arguments ultimately carried the day.

Measured engagement, with positive rewards held out in return for improved behaviour, is [...] more likely to induce positive change from Khartoum than continued attempts to isolate the regime.

The reasons Crisis Group cited in favour of lifting the sanctions are still valid today. Measured engagement, with positive rewards held out in return for improved behaviour, is in our view more likely to induce positive change from Khartoum than continued attempts to isolate the regime. The geopolitical winds that have shifted over the past few years in Bashir’s favour and allowed him to shore up support from new allies, particularly in the Gulf, make this all the more true.

Perhaps of central importance, lifting sanctions would not leave the U.S. bereft of powerful political and economic tools to continue to press for change. In fact, one could argue the opposite is true: the administration, by showing it is prepared to reward better behaviour, could gain additional leverage from those sanctions that still are in place. Those are far from insignificant: these include the U.S. designation of Sudan as a state sponsor of terrorism, as it requires Washington to veto international debt relief that Khartoum is particularly keen on securing. At the same time, the U.S. should signal that if Khartoum backslides in its behaviour, Washington would aim for a new series of targeted sanctions against key figures.

The U.S. administration raised another issue during this round, namely Sudan’s alleged military dealings with the North Korean regime. From a U.S. perspective the crisis with Pyongyang clearly overrides any interest it might have with Sudan and thus felt justified in adding this requirement. Senior Sudanese officials told Crisis Group that they immediately complied with the U.S. request. Assuming the claim is accurate, Khartoum’s compliance with this late breaking request will only fuel its sense of grievance should the U.S. government choose not to lift sanctions.

Lifting sanctions should not, however, be the end of the conversation. Rather, it should usher in a new phase of engagement with Khartoum aimed at using U.S. influence and that of other foreign powers – notably, the UK, Norway, the Gulf monarchies and China – to nudge Bashir’s government toward further positive steps. This means coupling the lifting of sanctions with a discussion of the next phase of the roadmap: further normalisation of relations, including potentially returning a permanent ambassador to Khartoum, lifting the terrorism designation and enabling debt relief, in return for concrete Sudanese measures.

The U.S. should concentrate now on areas where the Sudanese government has made partial progress but could do much more, namely continuation of the ceasefire in the Two Areas, improved humanitarian access there and in Darfur, and playing a more constructive role in South Sudan. Importantly, a new phase of engagement should include improvement of Sudan’s dismal human rights record and ultimately the dismantling of militia groups in Darfur, responsible for much insecurity and violence against civilians in the region. For example, the recent killings of at least five people in the Internally Displaced People camp in Kalma, South Darfur, during clashes between security forces and camp residents, should be investigated.

A first set of additional steps upon which the U.S. could insist relates to conflicts in South Kordofan and Blue Nile states, where Khartoum has been fighting the rebel Sudan Peoples’ Liberation Movement-North (SPLM-N) since 2011. For now prospects of a breakthrough in talks between the sides, currently suspended, are gloomy. The SPLM-N is in the midst of a bitter leadership fight, lacks significant external support and thus has little military clout. Khartoum is reluctant to offer concessions to a group it believes to be on its last legs.

Still, Sudan could and should take immediate steps to improve the situation, including, first, maintaining its current ceasefire beyond the latest end-date in October; and, secondly, that it cooperates fully with talks on humanitarian access to rebel-controlled areas. Both these measures would diminish the suffering of people in conflict-affected areas and de-intensify conflict dynamics. The first step would be to reconvene a new round of the African Union-mediated peace talks to ensure both sides remain in dialogue.

With rebel groups weakened and driven almost entirely out of the country, the government has been less concerned about the presence of aid organisations, and the possible diversion of assistance, and thus more open to humanitarian access. Relief workers report better, although not complete, access to Darfur’s Jebel Marra region, now mostly held by government forces. They note, too, improvements in their interactions with the government’s Humanitarian Aid Commission (HAC), particularly with respect to travel notifications in non-conflict areas (generally granted within one day), visas and technical agreements (more readily approved).

That said, improvements are far from comprehensive. African Union-UN Mission in Darfur (UNAMID) personnel still face visa delays and officials continue to obstruct the entry of supplies into the country. Addressing such issues could be part of the package of additional demands the U.S. and others make of Khartoum. The Sudanese government also should cooperate with UNAMID in establishing a new temporary operating base in the Jebel Marra (this reportedly was recently approved by Khartoum), which would provide greater security for humanitarian relief efforts while the mission begins its draw-down in other areas.

Khartoum largely has refrained from destabilising South Sudan via proxies, though the recent, if limited, uptick in cross-border activity could test U.S. resolve. Crisis Group remains concerned that Sudan could exploit its links with Riek Machar, leader of the Sudan Peoples’ Liberation Movement/Army-In Opposition (SPLM/A-IO). Machar currently is in exile in South Africa and Khartoum should not take any steps that would allow him to undermine any efforts by a new SPLM/A-IO leadership to seek a political settlement with Juba, or to establish a political movement that would seek to challenge the ruling Sudan Peoples’ Liberation Movement (SPLM). Sudan could be tempted to do this to pressure Juba to stop hosting Sudanese armed groups, make concessions on disputed border territories and maintain the deal on transit fees (an important source of hard currency) for South Sudanese oil exported through a pipeline to Port Sudan. Continuation of Khartoum’s relative restraint in South Sudan is a priority; it should be measured not only by the absence of arms and ammunition supplied to South Sudanese rebels but also in its willingness to renegotiate revenue sharing with the south.

For its part, Juba should be pressed to make good on its commitment to cease to host and give safe haven to Sudanese rebel groups, some of which have fought for it and contributed to conflict and insecurity in South Sudan. The expulsion of Darfuri SLM-MM units from South Sudan in May 2017, which precipitated an unwelcome, if short-lived round of fighting in Darfur, showed Juba beginning to uphold its side of the deal. It now must fulfil similar commitments regarding the Darfuri Justice and Equality Movement (JEM), which without a safe haven outside Darfur is more likely to engage in the peace process. Juba also should continue to limit its support to and involvement with the SPLM-N. Without significant external supply of arms, ammunition and fuel, the group likely will be unable to increase the conflict’s intensity; this in turn will lessen the risk that Khartoum channel arms and ammunition to South Sudanese rebel groups.

The unease many in Washington feel about appearing to reward Khartoum is well founded. President Bashir’s government is guilty of political repression and extreme violence in the country’s neglected peripheries. The small positive steps it has taken are still a far cry from those needed to improve its governance and end its wars.

Any lifting of U.S. sanctions currently suspended should not be presented as an implicit stamp of approval for President Bashir or mark Khartoum’s diplomatic rehabilitation in Washington. Rather, it should be seen as a first step along what will continue to be a long and difficult road. It reflects belief that cautious, time-bound demands, tagged to proportionate incentives, can achieve more than the continuation of the outdated sanctions regime.

Lifting sanctions should mark the beginning of a new phase of U.S. engagement, focused on nudging Khartoum – as well as Sudanese rebel groups and Juba – toward measures that are both within reach and would do much to improve the lives of Sudanese and South Sudanese people. This will require the U.S. administration to follow up vigorously, empower officials charged with carrying out this effort and signal to Khartoum both that real progress will lead to normalised relations and, conversely, that Sudan’s backtracking will trigger the imposition of targeted sanctions focused on Sudan’s leaders, not its people.

Washington/Nairobi, 29 September 2017


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