South Sudan: Not Fully Independent After One Year, But Asia Could Turn The Tide

The African country of South Sudan split from its northern neighbor Sudan on July 9, 2011. The South had long suffered under the totalitarian regime of Omar Al Bashir, who continues to preside over Sudan, while President Salva Kiir Mayardit leads South Sudan.

To celebrate 365 days of sovereignty, South Sudanese revelers gathered in Juba, the capital city. Flags and parades filled the streets, and representatives from neighboring countries joined Kiir to celebrate the occasion in person.

We have fought for our right to be counted among the community of the free nations, and we have earned it, said Kiir to a crowd of thousands of people, who had waited in the hot sun to hear him speak.

Celebrations aside, this has been a tough year for South Sudan. Citizens there fought long and hard for their sovereignty, but serious problems continue to plague the government and its people. And in the end, Sudan still presents a major hindrance to South Sudan's economic progress.

We still depend on others, said Kiir. Our liberty today is incomplete. We must be more than liberated. We have to be independent economically.

New initiatives may yet break old bonds once and for all, but it will take some help from beyond South Sudan's own borders.

A Ways To Go

The good news: South Sudan is rich in natural resources. It has abundant rainfall, diverse wildlife and huge reserves of arable land. The vast majority of South Sudanese people are subsistence farmers, but better infrastructure could modernize agricultural practices and turn the country into a food exporter with time. This would be a boon for the continent, since surrounding regions in the Horn of Africa and the Sahel are vulnerable to drought and recurring famine.

But the necessary infrastructure has been a long time coming; decades of conflicts with Sudan have sapped resources. Even today, about half of the already-pinched national budget goes to defense spending, while infrastructure continues to languish.

The electrical grid consists of little more than stand-alone generators, mostly in urban areas. Only about 60 miles of paved roads exist throughout the entire country. Health care and education levels are dismal; South Sudan has the highest maternal mortality rate in the world, and nearly three-quarters of the population are illiterate.

But ongoing violent crises make it near impossible for the government to dial back its military spending.

Within South Sudan's own borders, tribal and ethnic rivalries rage on as they have for decades. The fighting is at its worst in the eastern state of Jonglei, where the Nuer and Dinka tribes engage in constant skirmishes with the Murle people -- on both sides, thousands have been killed within the past year alone.

But the biggest threat to national security still comes from neighboring Sudan. Territorial disputes and battles over resources have dragged on for decades, and formal division has done little to calm the violence.

Today, both sides are mobilizing near their shared border. South Sudan has increased its troop presence in the town of Rubkona in Unity State, along its northern edge. And the Sudanese government continues to attack and intimidate residents in its own border states of Blue Nile and South Kordofan, which are home to villagers who once fought alongside the South for independence but ended up on the wrong side of the border when the final lines were drawn.

In short, the Kiir administration has plenty of motivation to focus on security at the expense of infrastructural improvements. That's why it's impossible, for the time being, to divorce the idea of South Sudanese progress from the goal of ending the conflict with Sudan. Roads and schools could be built, health care could be improved, and agricultural practices could be revolutionized, but, first, the army must be scaled back so that funds can flow where they are needed most.

Grinding To A Halt

South Sudan's ongoing conflict with Sudan is, at heart, an economic one. Resolving the violent decades-long feud will involve ending the tussle over oil resources, which make up the bulk of revenue for both countries.

When South Sudan gained independence, it seceded with the vast majority of oil fields. But Sudan retains the pipelines to turn the resource into a marketable commodity. Disagreements over transport fees and allegations of stolen oil motivated South Sudan to stop pumping crude altogether this January. The decision stunned the international community and devastated South Sudan's own economy, cutting off 98 percent of revenue.

For a struggling young country, this was an incredible sacrifice to make in the name of retribution. Since January, inflation has soared to about 80 percent, and austerity measures have been implemented. Sudan has also suffered; the high cost of living there has motivated scores of protests over the past month in Khartoum.

Reopening the oil fields could end this serious crisis, but neither side shows signs of backing down. Just this April, Kiir sent troops to occupy Heglig, an oil-producing zone in Sudan. More than 1,000 died, and the offensive withdrew after 10 days. International powers disparaged the ill-fated maneuver.

In June, Kiir kept up the strong language in a speech in front of parliament. I reject the proposition that the best way to peace with Sudan is through dependence on Sudan, he said. No nation can prosper by surrendering control of its economy to another.

But the fact remains that oil is South Sudan's best immediate hope for infusing much-needed funds into its struggling economy. Crude is abundant, but the landlocked country currently has no way to get that resource out to market.

With neighboring Sudan out of the picture, what is there to be done?

The Silent Partner

South Sudan has a new vision for its own oil infrastructure. Forget the two pipelines that lead from South Sudan up north, past Khartoum and into a Sudanese export point on the Red Sea; there are new plans in place for a line that would go south via Juba, passing through Kenya to a port that is currently under construction in that country's Lamu region on the Arabian Sea.

This would enable South Sudan to bypass negotiations with Sudan while still generating much-needed revenues from its abundant oil fields.

China would be a natural partner in this endeavor. When South Sudan and Sudan were working together to export oil, reports the U.S. Energy Information Administration, 66 percent of the product went straight to China. In return, the Asian country has been heavily involved in the economies of both Sudan and South Sudan. Indeed, Beijing was the main financier of the oil lines and refineries there and a major provider of loans and assistance overall.

Now that South Sudan is independent, it is eager to establish a healthy trade relationship with the world's second-largest economy.

But China was put off by some of Juba's recent decisions, especially its move to shut down oil production in January. In February, the South Sudanese government made another faux pas when it evicted the top executive at Pertrodar, a Chinese-led oil conglomerate, on allegations that he was participating in Sudan's efforts to steal South Sudanese oil.

But faced with censure from its most important economic partner, the Juba government made new attempts to smooth over tensions with China. Kiir himself paid a visit to Beijing on April 24, with hopes of securing China's partnership on the new pipeline venture. He signed a number of agreements with Chinese leader Hu Jintao, with China pledging new loans and more humanitarian aid assistance to South Sudan.

But in the end, a pipeline was deemed too risky a venture. China walks a fine line now that Sudan has split in two, and helping Juba to export its own oil could have imperiled Beijing's relationship with Khartoum.

Kiir left that meeting earlier than planned, traveling back to Juba with several helpful commitments from China but no pipeline investments.

Another Rising Sun

Today in Juba, all hope is not lost. Last month, South Sudan signed a new Memorandum of Understanding with Kenya; it is once again in talks to build the new pipeline. This time around, a Japanese company may step up to fund the venture.

The Toyota Tsusho Corp. has already conducted a feasibility study for the project, reports the Sudan Tribune. Results were positive, and Toyota Tsusho has voiced a willingness to enter into a deal. They appear ready to finance construction and are in talks with the Ministry of Petroleum and Mining to work out a plan for repayment.

Completion of such a project -- not to mention a transition to profitability -- is years away. But should the venture succeed, South Sudan will have a brand new source of income, as well as an opportunity to form strong new connections in the international community.

Of course, a pipeline is by no means a cure-all. South Sudan will still have to address governmental corruption, internal tribal clashes, poor infrastructure and a lack of economic diversification. Those problems can't wait, and there is a chance the Juba government will collapse before any new oil infrastructure can begin to confer its benefits.

But if the project succeeds, the resulting economic autonomy would at least mark a true divorce from Sudan. It may be South Sudan's best chance to achieve the true sovereignty that wasn't quite won when Juba declared its independence one year ago.