Sudan’s Suitors and Economic Challenges

Courtesy of STRATFOR (subscription required), a look at Sudan’s economic challenges and interested suitors:

  • Western states will successfully leverage their support for Sudan’s transitional government amid the country’s economic challenges to establish geopolitical influence there.
  • Anticipated Western financial support will bolster the civilian government’s position against that of the military, which has closer ties with other financial backers like the Gulf states, China and Russia.
  • But for this to occur, the United States will first have to remove Sudan from its list of state sponsors of terrorism — a development that some expect to come soon.

With a new government finally in place, Sudan’s suitors are starting to call. In August, the country’s military and civilian leaders formed a transitional government, winning plaudits from the international community. For Khartoum, however, one issue continues to cloud its path forward: the United States’ designation of Sudan as a sponsor of terrorism. Until Washington removes Khartoum from the list, Prime Minister Abdalla Hamdok’s government won’t be able to access much debt relief or financial support that would help right Sudan’s poor economy.  

The Big Picture

Now that Sudan’s military and civilian representatives have reached a deal, Western states are seeing opportunities to help the government tackle its economic woes and shape the alignment of the country’s future administration.

And as many lobby the United States to remove Sudan from the list, Western actors are looking to make inroads in the country. French President Emmanuel Macron, for one, has offered to organize an international conference to restructure the country’s debt as soon as the United States removes the country from its terrorism list. (Hamdok, in fact, has said U.S. officials intimated to him during recent talks at the United Nations that such a move could come “very soon.”) The French proposal illustrates the possible rewards available to Sudan, as well as the West’s efforts to leverage financial support to guarantee Khartoum’s alignment, lest the newly democratizing country stray too far into the arms of global competitors such as Russia, China or even Iran.

Climbing Out Of an Economic Hole

For Sudan, the ramifications of greater financial support could be huge. Perhaps even more so than the efforts to move toward free and fair elections following the transitional process, the current administration has to try and fix the economy. The country has been crushed by debt (which totaled $56 billion in 2018, or 137 percent of its gross domestic product) and a shortage of foreign currency. In fact, it was economic malaise that initially drove civilians to begin protesting against food shortages in December 2018, ultimately culminating in rallies that brought down Omar al Bashir, the strongman whose 30-year rule ended in April. At the very least, significant debt relief and access to foreign financial assistance would offer Sudan economic stability during its transitional period, which will end with elections in 2022.

These charts show the performance of Sudan's key economic indicators.

As a result, the West’s potential economic relief could also affect Sudan’s internal power dynamics. For one, the military still plays an important role in the country, sharing seats on the governing sovereign council with civilians even as it has agreed to allow civilians to fill all but two positions in the Cabinet, as well as all the positions in the future legislative body. One pillar of that role has been the military’s direct relationship with Arab partners. Sudan’s reliance on financial support from Saudi Arabia and the United Arab Emirates gives the Gulf countries some leverage and could be conditional on guarantees that the new government won’t rehabilitate elements of al Bashir’s former National Congress Party or the Muslim Brotherhood-tied Sudanese Islamist Movement, which could destabilize the country. Indeed, during the final years of al Bashir’s rule, Sudan pivoted toward Gulf partners such as Saudi Arabia and the United Arab Emirates after previously aligning with Iran. Sudan also forged connections with Russia and continued a longstanding relationship with China. 

Rivals for Sudan’s Attention

But with al Bashir out of office, others are waking up to the opportunities to develop a more meaningful relationship with Sudan. As part of a broader regional competition, Turkey and Qatar have provided humanitarian aid and healthcare investments to Sudan in an effort to outflank the Saudis and the Emiratis. And because of the presence of civilian elements in the transitional institutions, the West now has an opportunity to cultivate its own direct influence in Sudan — an eventuality that would likely weaken Riyadh and Abu Dhabi’s leverage.

For Western diplomatic backing to actually translate into meaningful financial support, Sudan’s creditors will first have to make significant contributions to a larger debt restructuring effort. 

The civilian opposition has made no secret of its desire for Western attention. But for Western diplomatic backing to actually translate into meaningful financial support, Sudan’s creditors will first have to make significant contributions to a larger debt restructuring effort. Without this, Sudan will continue to struggle under the massive weight of its debt and remain without new lines of credit from organizations like the International Monetary Fund — to whom Khartoum still has outstanding debt. Finance Minister Ibrahim El Badawi has already set the bar high, indicating that Sudan needs a full debt relief plan, rather than just a limited restructuring. In the end, without such deep help, Khartoum will struggle to extract itself from its financial predicament and put its economy on track.

This entry was posted on Wednesday, October 9th, 2019 at 4:26 am and is filed under Sudan.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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