Sudan’s increasingly urgent economic crisis, which has recently grown more acute because of financial isolation related in part to tighter sanctions enforcement for Iran, has become the regime’s greatest vulnerability, says the USA-based advocacy think-tank Enough Project.
In its latest report released today, ‘Khartoum’s Economic Achilles Heel’, The intersection of war, profit, and greed’, Enough Project analyst Suliman Baldo states that Sudan’s growing economic vulnerability gives the US government and the international community powerful leverage to support an inclusive peace deal in Sudan that leads to a transition to democracy.
The international community should leverage the regime’s multiple internal and external economic vulnerabilities to press the Sudanese government into agreeing to negotiated solutions rather than continuing in its current destructive path of military subjugation and political repression of its opponents.
According to the analyst, the regime appears to keep a tenuous grip on the political and security situation, but it is constantly undermined by its own short-term opportunistic moves, mismanagement of the economy, and its enabling and protection of grand corruption as a way to maintain its power.
Sudanese leaders readily attribute to external pressures the livelihood hardships the government’s policies are inflicting on the Sudanese people. They routinely denounce in particular the economic sanctions that the USA have imposed on Sudan since the mid-1990s because of the regime’s links to international terrorism and its attacks on Sudanese citizens.
Yet, the Enough Project report states, Sudanese officials minimise the role they themselves have played in mismanaging the economy, in wasting and abusing resources, and in diverting the Sudanese public’s money away from the productive and human development sectors -particularly agriculture, health, industry, and education- toward private accounts, or to fund war against Sudanese citizens in peripheral regions.
The report points in this context to Sudan’s national budget of 2016, wherein 76 percent of the government expenditure is dedicated to the defence, police, and security sectors, while only eight percent of projected expenditures are earmarked for the agriculture and manufacturing sectors, and to the vital health and education sectors.
Senior ruling National Congress Party (NCP) officials and members of their families also own protected companies. These groups all receive privileged treatment in the allocation of government contracts, and in countless waivers of government dues.
The regime-affiliated economic networks of hundreds of commercial companies, which dominate the private sector, constitute what many Sudanese people call a ‘grey economy’. This grey economy thrives in the shadows of the ‘deep state’, the latter being a term Sudanese people use to refer to the networks that have managed through their control of the grey economy to hijack the national economy, and exploit that power to generate benefits for themselves.
Some government institutions figure prominently among the key operators in this gray economy. These government institutions operate alongside companies controlled by regime cronies which hold monopolies over entire sectors of the national economy and are well protected. These government institutions include, among others, the economic outshoots of the Ministries of Defence and Interior, and the National Intelligence and Security Service (NISS) which all have dozens of companies operating in the commercial arena, the Enough report reads.
Senior ruling National Congress Party (NCP) officials and members of their immediate and extended families also own protected companies. These groups all receive privileged treatment in the allocation of government contracts, and in countless waivers of government dues for customs, taxation, and other business transactions.
This economic duality makes the Sudanese government highly vulnerable, inside and out, says the Enough Project. State-enshrined grand corruption, combined with economic mismanagement and short-sighted, opportunistic over-spending of finite public money on unproductive pursuits, have left the regime heavily indebted. Recent banking restrictions now affect individual transactions and directly hamper access to cash by some key operators in the gray economy. These restrictions have helped prompt a concerted Sudanese government-led lobbying effort to have sanctions -particularly US sanctions- lifted as quickly as possible.
The Enough Project recommends the Government of Sudan to facilitate a genuinely comprehensive and inclusive solution to end Sudan’s civil wars, and steer the country to a democratic transition.
Furthermore, the regime should increase accountability by fighting the official corruption, and introducing transparency measures. It should support the tracing and return of stolen public funds, and protect the independence of the judiciary and the media as well.
To the Sudanese opposition, civil society, academics, and institutional reform experts, the Enough Project recommends that they work for better coordination and integration of ongoing initiatives for the development of alternative policies for the reform of the economic sector and other sectors vital for the stability of the state in the event of transition to democracy. They should as well research and document all stolen public funds and assets, and prepare plans for the recovery of these assets and for holding accountable those responsible for their diversion.
The AU and the UN Economic Commission for Africa (ECA) should support illicit finance investigations, and provide technical assistance to civil society efforts to enable them to identify, investigate, and document illicit financial flows from Sudan, in particular from the diversion of oil revenue.
The Enough Project was established in the USA in 2006 by a group of concerned policy makers and activists. Based in Washington DC, the think-tank works with concerned citizens, advocates, and policy makers to prevent, mitigate, and resolve crises of genocide and crimes against humanity, in particular in the Horn of Africa.
In recent years, the Enough Project has been lobbying for intensified diplomatic efforts to pressure the Sudanese ruling party to end the wars in Darfur, South Kordofan, and Blue Nile, by agreeing on a comprehensive peace agreement that would pave the way to democracy in the country. According to the think-tank, this could best be done by focussing on the Khartoum regime’s wealth, in cooperation with the Gulf states, and targeting Sudan with sanctions on its gold exports.