Born into debt?

For south Sudan, sovereignty must mean more than having your own border, writes Nick Dearden
1 February 2011



The nearly unanimous south Sudanese referendum result announced over the weekend is likely to lead to independence for a southern state by July. But it only marks one step along the road to true sovereignty for this oppressed and impoverished people. As south Sudan's oil wealth has been used to enrich elites in the North for decades, so it is now being viewed with hungry eyes by the US and its allies.

The debt which is inherited by this new state is likely to play a key role in attempts to assert control on south Sudan from the outside. The Sudanese government in Khartoum currently has a debt of $35 billion, large parts of which stretch back to the 1970s and 1980s when the regime of General Nimeiry was propped up by the US. Of this debt, $20 billion represents interest, following years of default by the Bashir regime.

The UK claims Sudan owes £650 million ($1 billion) to the government's Export Credit Guarantees Department – the department which insures some British exports, usually arms, aerospace and big fossil fuel projects. The department refuses to say what projects the debt is based on. What we do know is that since 1984 an interest rate of between 10 and 12 per cent has been charged on this debt, wildly inflating it – in fact new figures reveal that up-to 90 per cent of Sudanese debt owed to the UK is interest.

Justice demands that south Sudan is not handed a portion of Khartoum’s debt, but the International Monetary Fund probably has other ideas. One suggestion is that Sudan will be allocated debt on its inception that will then be cancelled. No-one should fall into the trap of believing this to be just – in reality it would mean the southern state would be forced to go through a lengthy cancellation process, during which it would probably have to take out new loans to pay interest on its unjust debts, as well as whatever reforms the IMF felt like pushing on the country. It would ensure south Sudan could not escape from the grips of international institutions and their neoliberal ideology.

Meanwhile, popular protests have spread to Khartoum in north Sudan. Here too, most of the accumulated debts undoubtedly arose more through international power play than genuine attempts to improve the lives of Sudan’s people. The people of Sudan might want to take a look at the calls of people as far apart as Greece and Bolivia, and call for an audit of Sudan’s debts so they can find out just what the debts paid for and how legitimate they are.

Sovereignty for south Sudan means much more than a declaration of independence from the north. It means the people of that country controlling their own economic development. But with a large debt hanging over their heads, and reserves of oil ready to plunder, the people of south Sudan will need to be prepared to continue to struggle for real freedom.



Nick DeardenNick Dearden is the director of UK campaigning organisation Global Justice Now. He was previously the director of Jubilee Debt Campaign


 

University should not be a debt factory

Sheldon Ridley spoke to students taking part in their first national demonstration.

Mass civil disobedience in Sudan

A three-day general strike has brought Sudan to a stand still as people mobilise against the government and inequality. Jenny Nelson writes.

New Cross fights new wave of housing privatisation

Lewisham residents object to a new trend in local authority housing developments

Stand-off with prison profiteers at the Tower of London

Marienna Pope-Weidemann reports on disruption at the European Custody and Detention Summit




tim f 1 February 2011, 18.25

It’s also important to consider that many Southerners find debt-sharing unconscionable because of the way debt was accumulated – by procuring weapons with which to kill Southerners. Should Southerners pay for their own extermination? Did Southerners benefit from development funded by the loans they are now asked to share the debt interest payments of?

It isn’t just a question of fairness, or just of development, but of sustainable peace. If the bribe for peace (oil-sharing, debt-sharing etc) is too great, Southerners will want to renegotiate it before long, which could lead back to conflict.

Realistically there must be resource-sharing, of course – the detail of the CPA, oil pipelines which stretch to Port Sudan, and the necessity of ensuring the North does not become a failed state all demonstrate its necessity. But bribing the North for peace comes at a cost and is no panacea.



Comments are now closed on this article.






Red Pepper · 44-48 Shepherdess Walk, London N1 7JP · +44 (0)20 7324 5068 · office[at]redpepper.org.uk
Advertise · Press · Donate
For subscriptions enquiries please email subs@redpepper.org.uk