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WEEKLY NEWSLETTER
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Sudan
Index
Worker picking cotton, one of Sudan's
leading exports
THE ECONOMY OF SUDAN continued to be in disarray in mid-1991.
The principal causes of the disorder have been the violent,
costly civil war, an inept government, an influx of refugees from
neighboring countries, as well as internal migration, and a
decade of below normal annual rainfall with the concomitant
failure of staple food and cash crops.
The economic and political upheavals that characterized Sudan
in the 1980s have made statistical material either difficult to
obtain or unreliable. Prices and wages in the marketplace
fluctuated constantly, as did the government's revenue.
Consequently, information concerning Sudan's economy tends to be
more historical than current.
In the 1970s, economic growth had been stimulated by a large
influx of capital from Saudi Arabia and Kuwait, invested with the
expectation that Sudan would become "the breadbasket" of the Arab
world, and by large increments of foreign aid from the United
States and the European Community (EC). Predictions of continuing
economic growth were sustained by loans from the
World Bank (see Glossary)
and generous contributions from such disparate
countries as Norway, Yugoslavia, and China. Sudan's greatest
economic resource was its agriculture, to be developed in the
vast arable land that either received sufficient rainfall or
could be irrigated from the Nile. By 1991 Sudan had not yet
claimed its full water share (18.5 billion cubic meters) under
the 1959 Nile Waters Agreement between Egypt and Sudan.
Sudan's economic future in the 1970s was also energized by
the Chevron Overseas Petroleum Corporation's discovery of oil on
the borderlands between the provinces of Kurdufan and Bahr al
Ghazal. Concurrently, the most thoroughly researched hydrological
project in the Third World, the Jonglei Canal (also seen as
Junqali Canal), was proceeding ahead of schedule, planned not
only to provide water for northern Sudan and Egypt, but also to
improve the life of the Nilotic people of the canal zone. New,
large agricultural projects had been undertaken in sugar at
Kinanah and cotton at Rahad. Particularly in southern Sudan,
where the Addis Ababa accords of March 27, 1972, had seemingly
ended the insurgency, a sense of optimism and prosperity
prevailed, dashed, however, when the civil war resumed in 1983.
The Khartoum government controlled these development projects,
but entrepreneurs could make fortunes through the intricate
network of kinship and political relations that has traditionally
driven Sudan's social and economic machinery.
In the early 1970s, public enterprises dominated the modern
sector, including much of agriculture and most of large-scale
industry, transport, electric power, banking, and insurance. This
situation resulted from the private sector's inability to finance
major development and from an initial government policy after the
1969 military coup to nationalize the financial sector and part
of existing industry. Private economic activities were relegated
to modern small- and medium-scale industry. The private sector
dominated road transport and domestic commerce and virtually
controlled traditional agriculture and handicrafts.
In the 1980s, however, Sudan underwent severe political and
economic upheavals that have shaken its traditional institutions
and its economy. The civil war in the south resumed in 1983, at a
cost of more than £Sd11 million per day (for value of the
Sudanese pound--see Glossary).
The main participant in the war
against government was the Sudanese People's Liberation Army
(SPLA, the armed wing of the Sudanese People's Liberation
Movement (SPLM)), under John Garang's leadership. The SPLA made
steady gains against the Sudanese army until by 1991 it
controlled nearly one-third of the country.
The dearth of rainfall in the usually productive regions of
Sahel (see Glossary)
and southern Sudan added to the country's
economic problems. Refugees, both Sudanese and foreigners from
Eritrea, Ethiopia, Uganda, and Chad, further strained the
Sudanese budget. International humanitarian agencies have rallied
to Sudan's aid, but the government rejected their help.
When Jaafar an Nimeiri was overthrown in April 1985, his
political party disappeared, as did his elaborate security
apparatus. The military transitional government and the
democratically elected coalition government of Sadiq al Mahdi
that succeeded the exiled Nimeiri failed to address the country's
economic problems. Production continued to decline as a result of
mismanagement and natural disasters. The national debt grew at an
alarming rate because Sudan's resources were insufficient to
service it. Not only did the SPLA shut down Chevron's prospecting
and oil production, but it also stopped work on the Jonglei
Canal.
On June 30, 1989, a military coup d'état led by Colonel
(later Lieutenant General) Umar al Bashir overthrew the
government of Sadiq al Mahdi. Ideologically tied to the Muslim
Brotherhood and dependent for political support on the
Brotherhood's party, the National Islamic Front, the Bashir
regime has methodically purged those agencies that dealt
primarily with the economy--the civil service, the trade unions,
the boards of publicly owned enterprises, the Ministry of Finance
and Economic Planning, and the central bank. Under Bashir's
government, Sudan's economy has been further strained by the most
severe famine of this century, the continuation of the war in the
south, and a foreign policy that has left Sudan economically, if
not politically, isolated from the world community.
Data as of June 1991
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