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Sudan After Sanctions

By Yousif Yahya

In the final days of the Obama administration and with approval from the incoming Trump administration, the U.S. government moved to ease the sanctions on Sudan. Since 1997, U.S. sanctions restricted financial dealings with any public or private Sudanese companies and, thus, limited the inflow of capital. The sanctions also froze and seized both private and government assets abroad. Though the sanctions were bilateral, any financial institutions or individuals doing business with Sudan were penalized—most famously, the French bank PNB was fined $9 billion for violating U.S. sanctions on Sudan and other countries.

The decision to ease the sanctions earlier this year shocked many of those who were closely following the situation in Khartoum. As the economy crumbled, public strikes became more frequent, making it seem as though the government was running on its last breath. However, with the help of some of its Gulf allies, Sudan’s government was able to get the sanctions eased. Now, Sudan has an opportunity to restore its regional role. Sudan has had difficulties partnering up with members of the international community to solve regional issues because of the sanctions and President Omar al-Bashir’s indictment by the ICC. Now that the U.S. has opened the door for dialogue and the African Union has agreed on a mass withdrawal from the ICC, more countries in the region may decide to repair their relations with Sudan.

While the sanctions were in place, all major sectors of the Sudanese economy were affected—though transportation and manufacturing suffered the most. Sudan Airways, once a regional jewel, felt the impact early; the majority of its fleet was composed of U.S.-manufactured airplanes. With the sanctions in place it was impossible to service and maintain the fleet, and Khartoum’s airport became a graveyard for the country’s national carrier. Additionally, Sudan Railways has been unable to service and upgrade its rails, increasing the costs of moving goods around the region, which caused the prices of everyday products to rise and made Sudanese products less competitive in regional markets.

According to Sudanese Foreign Minister Ibrahim Ghandour, the move to ease sanctions came after talks with Washington that lasted more than six months. The minster cited several agenda items, but intelligence cooperation was at the core of the discussions—particularly regarding the threat posed by al-Qaida and the so-called Islamic State. Though the main reason Sudan’s sanctions were eased was to obtain its assistance in combating terrorism, it still remains on the U.S.’s list of state sponsors of terror because of lingering ties with Palestinian-affiliated groups. It is therefore important to note that the change in U.S. policy came as a result of Sudan’s shifting geopolitical role, not an improving domestic situation. In the past, the U.S. has said that used sanctions as a tool to promote regime change, but over the years that narrative changed as it partnered up with the Sudanese government on security issues.

Sudan’s military role in the U.S.-backed, Saudi-led campaign in Yemen, as well as Khartoum’s decision to sever diplomatic relations with Tehran last year, pivoting away from the two nations’ former ties, highlight its strategic shift toward supporting Washington’s Arab Gulf allies. Additionally, it has been said that Sudan has been willing to provide intelligence on the flow of migrants through its territory—leading the EU to broker a partnership with Sudan.

Furthermore, Sudan has moved to reach an understating with the Italian government and EU Emergency Trust Fund for Africa to cooperate on issues of “illegal immigration, human trafficking, telecommunication and financial crimes.” While citizens of neighboring countries once turned to Sudan for employment opportunities, Sudan is now one of the main stops East African migrants make before continuing their journey into Europe or Israel in search for economic and political stability.

Additionally, Sudan is a key player in the stabilization of South Sudan. Though the two countries have been involved in political conflict, they still share cultural ties and geopolitical interests. The majority of the fighting that is taking place in South Sudan occurs in oil-rich provinces. Oil, which was once the new country’s only significant source of income, also benefitted Sudan through revenue from the pipeline that carried South Sudanese oil, giving Sudan a stake in the outcome of the crisis. As soon as the oil revenues started disappearing because of rising corruption and decreasing global oil prices, both countries moved to remove government subsidies and raise tariffs to balance their budgets. Their economic futures are thus closely tied. Sudan has experience with South Sudanese political groups, so it should be engaged as a partner to broker a peace deal.

Sudan has a long history of hosting refugees and asylum-seekers, and more than 150,000 currently reside in Eastern Sudan, Darfur, and Khartoum. For a poor country like Sudan, these numbers are difficult to support. Now that access to capital is available, Sudan has the opportunity to invite these refugees and asylum-seekers to join the Sudanese people to rebuild the country’s economy. It is not often that a government is afforded a second chance, but the 30-year-old Sudanese government has an opportunity to do right by revisiting some of its outdated economic policies and transparency laws, making it easier for businesses to move to Sudan. For these businesses to be successful, skilled laborers will also have to close the current gap in the Sudanese work force. Only when the government revisits those outdated policies will opportunities open for public-private partnerships to educate and equip workers with the necessary skills to meet  today’s economic demands.

With the sanctions lifted and African nations leaving the ICC, Sudan has a window of opportunity to reposition and rebrand itself at both the regional and global levels. At the global level, Sudan has already started presenting itself as an intelligence partner in an effort to combat terrorism and human trafficking. Sudan should seek to leverage these new partnerships to revitalize its economy, with a focus on investing in its human capital. A secure and prosperous Sudan would have a spillover effect, further stabilizing and enriching its neighbors. However, this can only be achieved if the Sudanese government changes its policies to focus on developing the country’s capacity to lead and prosper rather than just survive.  

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Yousif Yahya is a former research assistant at World Policy Institute.

[Photo courtesy of U.S. Department of State]

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