'It's Basically Over': The Sudanese Dictatorship's Dwindling Options

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Even after it signed a crucial oil treaty with its southern neighbor, the government in Khartoum has plenty to worry about.

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Sudanese President Omar Hassan al-Bashir waves to supporters outside the Defense Ministry in Khartoum, just after hostilities with neighboring South Sudan ceased, on April 20th, 2012. (Mohamed Nureldin Abdallah/Reuters)

On September 27, one of the most repressive governments on earth was thrown a lifeline. After an eight-month standoff that ravaged the two countries' economies and brought them to the brink of war, North and South Sudan resolved a long-simmering dispute over how to divide their oil revenue, the primary source of tension after the South became independent in July 2011. The relationship between the two countries is still one of suspicion, proxy warfare, and seemingly-insoluble border disputes that provide a plausible casus belli if either needs an excuse to ratchet up pressure. Even so, the deal allows for the possibility that within the next six months, oil will again start flowing for the first time since February 2012, restoring a revenue source that each government desperately needs.

The oil deal is added evidence of the Khartoum government's astounding ability to weather whatever challenges a polyglot and deeply unstable region throws its way. Since taking power in a 1989 coup, Sudan's National Congress Party, led by the International Criminal Court-indicted Omar al Bashir, has proven itself to be one of the more adaptable cadres of autocrats the modern Middle East and Africa has ever known. In the 23 years since they came to power, they have morphed from revolutionary Islamists into pan-ideological opportunists -- all while effectively defanging or co-opting the country's other political parties, which are some of the oldest and most respected in the Arab world. At various times, the NCP has gotten Iran, the Gulf States, and the Arab League to arm it, fund it, or provide it with crucial political cover. It has used sprawling patronage networks, which extend from local militias all the way to the upper ranks of the military, to turn the country's numerous armed conflicts in its favor. And it has waged scorched-earth campaigns against insurgencies in Darfur and Southern Kordofan -- while deploying less-violent and more tactical methods against peaceful anti-regime activists in places closer to the centers of power.

But there is now ample evidence that the NCP's flexibility is reaching its limits. The regime is facing a crisis because of a basic dilemma: Khartoum is running out of money, and the government is facing fiscal and economic challenges that can only be avoided if its nature and basic outlook undergo a dramatic shift.

The Democracy ReportThe fact that Sudan is not a democracy limits the possibility of such a shift. If the Sudan were ruled by a government beholden to voters, rather than to its exclusive self-interest, the governing clique would not have to be counted on to give up its privileges -- to voluntarily change its fundamental nature, or its philosophy toward governing a populous, complex and volatile country. Yet as Yousif Elmahdi, a Khartoum-based economist and democracy activist explained, the NCP now cares about short-term resiliency to the exclusion of all else. "The regime is so fragmented and so fragile," he said. "There's no ideology, no common goal, no common vision. It's basically survival from day to day."

Elmahdi said that the widespread protests that gripped Sudan over the summer offered a glimpse of the popular frustration that could bring down the NCP. "People are oppressed," he said. "There's a lack of basic freedoms, conflict, poverty -- you name it. Any governance issue you don't want to have, we have in Sudan."

Even so, he doubts the government will fall unless there are paralyzing street protests that would convince more opportunistic elements in the NCP to side against the regime's current leadership. And those won't materialize unless Sudanese see an economic imperative in ousting the government. "It hasn't gotten to the level where we're looking at the revolution of the hungry," said Elmahdi. "If we're going to eventually break this fear barrier outright, the economy's going to be the reason. People are going to go out because they won't have a choice anymore."

"There's no ideology, no common goal, no common vision. It's basically survival from day to day."

It's impossible to know just how far off that is -- the NCP might be able to stretch its resources and preserve its network for several more years. The possible Israeli bombing on October 24 of the Yarmouk weapons facility -- a sprawling munitions factory in southern Khartoum and the site of what might have been a large cache of weapons bound for Hamas and Hezbollah -- exposed the regime's strategy for survival. The NCP has made itself indispensable to Iran's weapons-smuggling network in Africa; one U.S. State Department cable published by WikiLeaks reported that the facility had handled "items on a multilateral control list, or other items that have the potential to contribute materially to WMD, missile, or certain other weapons programs in Iran or Syria."

But the bombing, which saw Sudan's capital city attacked partly because of the recklessness and opportunism of the ruling party, also revealed the destabilizing consequences of such an approach. As one analysis concluded, Sudan is now a front in Israel's conflict against Sunni terrorism and Iran. The Yarmouk incident hardly suggests a government interested in pursuing a more moderate course. And there's plenty to suggest that its current path can't be sustained forever. The attack on the capital must have been embarrassing, but the NCP has much bigger problems on its hands.

* * *

The most telling signs of looming problems for the NCP are economic. Sudan's economic troubles partly stem from the loss of its oil income in July 2011 after the South Sudan became an independent state -- the country was already running a $2.5 billion trade deficit in the six months between the south's secession and the oil shutdown. In a dispute over how the countries would divide their oil revenue, the South froze its oil exports in February 2012.The two sides resolved the issue thanks to an agreement in late September, but only after eight months of economic disaster for both countries. In Sudan, a country that depends on oil for half of its government revenue and 90 percent of its export revenue, government salaries and subsidizes were cut, and the price of electricity and fuel doubled. Official inflation skyrocketed to 42 percent, although Elmahdi said that the actual rate was closer to 65 percent according to estimates he conducted this past March. Inflation had a major impact on the price of basic foodstuffs, since Sudan imports nearly 100 percent of its wheat. Elmahdi said the government, which is currently in $4 billion of debt, had to take out a $700 million loan from China (which buys 66 percent of Sudanese oil) simply to be able to keep importing fuel and wheat.

"If they've reached the stage where they don't even have the liquidity to import the most basic necessities -- necessities that would ultimately make or break the regime -- if we don't have diesel to run factories or to run public transport, then basically it's over for them," said Elmahdi.

actual yarmouk.jpgFlames engulf the Yarmouk munitions factory after what might have been an Israeli attack on October 24th. (Reuters)

The current situation in Sudan is a master class in how dictatorships endure long after their ideological appeal has faded -- and far beyond what would seem to be the logical point of viability. The NCP has used a combination of militarism and patronage to stay in power, and the two often work in lockstep: for instance, the NCP has provided organization, weaponry and even government salaries to irregulars fighting the insurgencies in Darfur and South Kordofan. It's replaced the upper echelons of the military with regime loyalists, and beefed up the NISS, the domestic intelligence agency. "The government of Sudan amazes in its ability to survive," said Freedom House's Ahmed Kodouda. "The government will continue to find agreements, create coalitions and engage various actors, regardless of their positions or the impact on the actual country's foreign or domestic interest, for its survival."

To that end, the Sudanese government spends $4 million a day, and, according to Elmahdi, 88 percent of its budget, on defense and security. One of the regime's top priorities has been to maintain its control over a vast and compartmentalized security apparatus. For instance, as Magdi El Gazouli, an economist and fellow at the Rift Valley Institute explains, the government maintains a bank "dedicated to giving cheap loans to junior military officers and security officers." Still, the bank had to be bailed out by the Sudanese central bank three times even before the southern oil shutoff. And after the shutoff, it is clear that the government is struggling to balance its patronage network against the need to maintain a functioning state and society.

The NCP is a master class in how dictatorships endure long after their initial appeal has faded.

"[The government's] problem is with the salaried class in Khartoum," said Gizouli. "These are the people the government doesn't have enough money to pay. They depend solely on their salaries. That's why you see occasional wildcat strikes in Khartoum. It's very, very frequent." He said that a week before our conversation in early October, over 150 employees of a state-owned bus company went on strike in Khartoum, in response to long hours and dwindling pay. "The transport system in the capital sort of was at a standstill for two days. People had to walk extensive distances to get to work."

Bus drivers, teachers and industrial workers haven't been drawing a consistent salary -- all have gone on strike recently, according to Gizouli. But militants, some of them left over from conflicts that ended years ago, apparently still are. "I can't even count how many irregular government militias there are in town," said Elmahdi. "There are so many different militias guarding this regime. It's absolutely unbelievable."

* * *

It's possible that even with the oil industry up and running, Sudan will not be able to regain its old sources of credit and income. For years, Khartoum has depended upon the Gulf States for loans and investment. The Kanana Sugar Company, one of the largest sugar producers in Africa, is jointly owned by the Sudanese and Kuwaiti governments. Meanwhile, the Qatari government provided Khartoum with a $2 billion line of credit earlier this year. But, as the Yarmouk incident highlighted, Khartoum enjoys close relations with Iran that include a "military cooperation agreement" and the stationing of Revolutionary Guard soldiers in Darfur. This is hardly the only reason Sudan has blown its goodwill with the Sunni Arab states: Qatar hosted and funded an abortive peace summit for the Darfur conflict in 2009 and 2010, a failure that has done little for Qatar's diplomatic prestige -- or for Darfuris, nearly 3 million of whom are still displaced. Qatar is providing aid and development money for Darfur, but Bashir apparently failed to obtain additional debt relief during a visit to Doha in August. In September, the Sudanese government appealed to Saudi Arabia for aid and debt relief, and received an amount almost calculated to embarrass it. At the height of the oil standoff, the Sudanese government found few takers on an attempt to give away farmland to Emirati developers.

At this point, Khartoum has very little it can borrow against. Sudan's state oil enterprise owns little more than five percent of the Greater Nile Petroleum Operating Company, one of the consortia established to extract and develop the Sudan's resources--indeed, the country's oil industry is a foreign project, largely owned and operated by China's national oil company and Petronas, the Malaysian energy giant. As Kodouda explains, Sudan has already leveraged its oil resources about as much as it possibly can. "All the pipelines in the country have been built using futures," said Kodouda, "and a lot of them are still owned by Malaysian and Chinese companies." Attempts to diversify the economy have proven farcical: in July, a $1 billion sugar refinery opened "several years" behind schedule, partly because international sanctions made it difficult for the Sudanese government to find a company willing to program the facility's machinery.

What about farming? Due to the oil boom, brain drain, and decades of official neglect, the once-functional irrigation systems serving the Jazirah region, the potential breadbasket lying between the White and Blue Niles, are largely silted over and unusable. As Gizouli explains, sub-competent private companies owned by various NCP allies are now responsible for irrigating the country's potentially-verdant interior -- and have let the Sudan's agricultural infrastructure, once of the envy of Africa and the Middle East, go to rot. "You probably see more Sudanese agricultural engineers and irrigation engineers working in Saudi Arabia than in Sudan," he said. "The combined loss of know-how and investment in agriculture, and the administrative shambles that the [irrigation scheme] has become, produced this outcome that despite being this very rich area, Jezira is not producing anything."

Animal husbandry isn't promising, either. For years, the NCP has bought and exported cattle raised by government-allied tribes on the country periphery. This is a convenient and mutually-beneficial form of patronage, according to Gizouli.

"For the NCP it's important to keep all of these groups very happy," he said -- including the Janjaweed, the vicious, pro-government militant pastoralists in Darfur. But it's hardly the path toward a more modern, high-yield agricultural sector. Worse still, it could even have a negative impact on food security, said Kodouda. "The government decides to export the vast majority of livestock at the expense of the ability of local individuals in Sudan to purchase livestock. The price of a sheep has tripled or at least doubled in the last year," he said.

"There isn't a shortage of Sudanese professionals outside Sudan."

These aren't even the only problems the country faces. As Gizouli explains, a huge percentage of the educated, skilled labor pool has left Sudan, and is living in either Europe or the Gulf states. "There isn't a shortage of Sudanese professionals outside Sudan," he quips. This is arguably beneficial. Officially, the Sudan is starved for foreign currency: the International Monetary Fund currently believes that the Sudanese government has less than two months' worth of foreign reserves left if it continues to import at its present rates. Yet Gizouli said that those estimates fail to take remittance money into account. Sudan has a consistent, seemingly politics-proof source of foreign currency. But it is seldom a good thing for so much of a country's professional class to be living abroad, especially when unskilled labor is also fairly difficult to come by: Gizouli explained that the secession of the South and the subsequent hostilities between the countries froze the typical inflow of cheap laborers from South Sudan, and led to an exodus of southern refugees who had lived in and around the most fertile regions of the Sudan for decades. Skilled workers are living abroad, while the availability of unskilled labor is conditioned on shifting and erratic political winds.

So the Sudan faces crippling debt, a suffering and over-leveraged oil industry, an irrelevant agricultural sector, and a shortage of both skilled and unskilled labor -- on top of international sanctions, Israeli bombing sorties and a regional and international pariah status that only appears to be getting worse. Meanwhile, the regime's survivalist instincts have only deepened its long-term problems. The maintenance of its exclusionary and nominally-Islamist rule almost requires the NCP to alienate the countries on which it depends the most. The government has to keep insurgents in Darfur and Southern Kordofan at bay -- although the humanitarian disaster there is a major obstacle toward normalization with the United States, and for debt relief or World Bank loans. The NCP has to maintain its patronage network -- but it does so at the expense of the country's professional and civil-service class. It prioritized relations with Iran, the one other self-perceived revolutionary Islamist government in the Muslim world -- but that has meant alienating the Sunni states it used to depend on.

These trade-offs have proven ruinous, but they've also enabled the regime to endure through two decades of chaos and war. The NCP can rescue the embattled Sudanese state. But only if it turns into something dramatically different than what it currently is.

The Middle East and Africa are pock-marked with autocratic governments that have entrenched their rule while holding out the vague possibility of reform: there was a time when western-educated autocrats like Bashar al-Assad and Saif Gadhafi seemed like possible agents of peaceful, democratic transition. But Syria and Libya are vivid examples of regimes that, when faced with a final, defining choice, opted for state collapse over fundamental change -- the near-term bid for regime survival, over the long-term certainty of reform. Although its structure and governing philosophy are different from both, the NCP has made much the same decision as the Gaddafi and Assad regimes. Perhaps the question isn't whether the unsustainable nature of its path will be exposed or whether there will be a dramatic Tahrir or Aleppo-like moment when the NCP's failure is finally sealed. Perhaps the question is when and how that moment will take place -- and how much violence it will leave in its wake.

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Armin Rosen is a former writer and producer for The Atlantic's Global channel.

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