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Sudan
The Economy
THE ECONOMY OF SUDAN continued to be in disarray in mid-1991.
The principal causes of the disorder have been the violent, costly
civil war, an inept government, an influx of refugees from neighboring
countries, as well as internal migration, and a decade of below
normal annual rainfall with the concomitant failure of staple
food and cash crops.
The economic and political upheavals that characterized Sudan
in the 1980s have made statistical material either difficult to
obtain or unreliable. Prices and wages in the marketplace fluctuated
constantly, as did the government's revenue. Consequently, information
concerning Sudan's economy tends to be more historical than current.
In the 1970s, economic growth had been stimulated by a large
influx of capital from Saudi Arabia and Kuwait, invested with
the expectation that Sudan would become "the breadbasket" of the
Arab world, and by large increments of foreign aid from the United
States and the European Community (EC). Predictions of continuing
economic growth were sustained by loans from the World Bank (see
Glossary) and generous contributions from such disparate countries
as Norway, Yugoslavia, and China. Sudan's greatest economic resource
was its agriculture, to be developed in the vast arable land that
either received sufficient rainfall or could be irrigated from
the Nile. By 1991 Sudan had not yet claimed its full water share
(18.5 billion cubic meters) under the 1959 Nile Waters Agreement
between Egypt and Sudan.
Sudan's economic future in the 1970s was also energized by the
Chevron Overseas Petroleum Corporation's discovery of oil on the
borderlands between the provinces of Kurdufan and Bahr al Ghazal.
Concurrently, the most thoroughly researched hydrological project
in the Third World, the Jonglei Canal (also seen as Junqali Canal),
was proceeding ahead of schedule, planned not only to provide
water for northern Sudan and Egypt, but also to improve the life
of the Nilotic people of the canal zone. New, large agricultural
projects had been undertaken in sugar at Kinanah and cotton at
Rahad. Particularly in southern Sudan, where the Addis Ababa accords
of March 27, 1972, had seemingly ended the insurgency, a sense
of optimism and prosperity prevailed, dashed, however, when the
civil war resumed in 1983. The Khartoum government controlled
these development projects, but entrepreneurs could make fortunes
through the intricate network of kinship and political relations
that has traditionally driven Sudan's social and economic machinery.
In the early 1970s, public enterprises dominated the modern sector,
including much of agriculture and most of large-scale industry,
transport, electric power, banking, and insurance. This situation
resulted from the private sector's inability to finance major
development and from an initial government policy after the 1969
military coup to nationalize the financial sector and part of
existing industry. Private economic activities were relegated
to modern small- and medium-scale industry. The private sector
dominated road transport and domestic commerce and virtually controlled
traditional agriculture and handicrafts.
In the 1980s, however, Sudan underwent severe political and economic
upheavals that have shaken its traditional institutions and its
economy. The civil war in the south resumed in 1983, at a cost
of more than £Sd11 million per day (for value of the Sudanese
pound--see Glossary). The main participant in the war against
government was the Sudanese People's Liberation Army (SPLA, the
armed wing of the Sudanese People's Liberation Movement (SPLM)),
under John Garang's leadership. The SPLA made steady gains against
the Sudanese army until by 1991 it controlled nearly one-third
of the country.
The dearth of rainfall in the usually productive regions of Sahel
(see Glossary) and southern Sudan added to the country's economic
problems. Refugees, both Sudanese and foreigners from Eritrea,
Ethiopia, Uganda, and Chad, further strained the Sudanese budget.
International humanitarian agencies have rallied to Sudan's aid,
but the government rejected their help.
When Jaafar an Nimeiri was overthrown in April 1985, his political
party disappeared, as did his elaborate security apparatus. The
military transitional government and the democratically elected
coalition government of Sadiq al Mahdi that succeeded the exiled
Nimeiri failed to address the country's economic problems. Production
continued to decline as a result of mismanagement and natural
disasters. The national debt grew at an alarming rate because
Sudan's resources were insufficient to service it. Not only did
the SPLA shut down Chevron's prospecting and oil production, but
it also stopped work on the Jonglei Canal.
On June 30, 1989, a military coup d'état led by Colonel (later
Lieutenant General) Umar al Bashir overthrew the government of
Sadiq al Mahdi. Ideologically tied to the Muslim Brotherhood and
dependent for political support on the Brotherhood's party, the
National Islamic Front, the Bashir regime has methodically purged
those agencies that dealt primarily with the economy--the civil
service, the trade unions, the boards of publicly owned enterprises,
the Ministry of Finance and Economic Planning, and the central
bank. Under Bashir's government, Sudan's economy has been further
strained by the most severe famine of this century, the continuation
of the war in the south, and a foreign policy that has left Sudan
economically, if not politically, isolated from the world community.
Data as of June 1991
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