For over four decades, intra-state conflict raged in the north east African state of Sudan. There were few intermissions from the violence until a long-awaited peace agreement was signed in 2005 between the Sudanese government and the Southern opposition. A predetermined referendum in January 2011 produced an undisputable 98 percent vote of approval by the South Sudanese in favour of secession. In July 2011, South Sudan became the newest independent state in Africa.
After acquiring official separation, one could presume that independence of Juba and Khartoum from one another finally beckoned. This could not be further from the truth. The two economies are highly interdependent and so the two states remain fatefully bound.
This is due to the most significant factor in both economies: oil. Upon the establishment of new state lines, South Sudan obtained 75 percent of Sudanese oil reserves, while Sudan has within its territory every oil refinery, every oil pipeline and the only export port. The divorce was bound to be messy.
Of the 23 months in which South Sudan has existed as a state, Juba stopped oil production for 15. When considering that South Sudan relies on oil production for 98 percent of its entire revenue, the significance of this decision is difficult to underestimate, while the indication of the palpable tension with its former ‘tyrant’ becomes more apparent.
The mutually damaging move hit both economies very hard. Political tension between Sudan and South Sudan continued to escalate and the two came to the brink of war just over a year ago in April 2012.
Despite such a turbulent beginning, optimism for better inter-state relations increased when in March 2013 a deal was struck to resume oil production and export. But before the ink of the cooperation agreement even had time to dry, an act of sabotage brought political tension back to the fore. Justice and Equality Movement (JEM) rebels from South Sudan have been accused of blowing up the oil pipeline in northern Abyei on June 12th 2013.
The Sudanese President, Omar al-Bashir, and Communications Minister, Ahmed Bilal Osman, have accused Juba of supporting the rebels, specifically by allowing them to cross the border and supplying them with equipment. Juba has categorically denied the attack.
Each state accuses the other of supporting rebel forces. More worrying than the customary accusations, which continue to fly back and forth, is President Omar al-Bashir’s threat to stop the flow of oil through Sudanese pipelines, thereby making Juba’s oil reserves practically redundant. This threat is particularly dangerous in a relationship as fragile as Khartoum and Juba’s.
The cooperation agreement has been signed but cooperation is far from reality. Some territories remain in dispute and war wounds are still fresh. Additionally, as one of the least developed country in Africa, it is very likely that South Sudan’s President Salva Kiir will react badly to an act carried out by his Sudanese counterpart that could easily topple South Sudan’s rudimentary economy.
Yet another spanner in the works is the significant agreement signed on the 26th of June 2013 between Uganda, Kenya and Rwanda to construct two pipelines, enabling landlocked South Sudan to export its oil through the south. The first pipeline reaches the Lamu port in Kenya while the second runs through Rwanda to Mombasa, Kenya. Juba therefore will no longer be at the complete mercy of its neighbour.
For South Sudan, this seems to be a promising situation, but what will it mean for Sudan? Removing the income earned from the high price charged to Juba for refining and exporting their oil will likely have catastrophic implications for the Sudanese economy. With such a grievance against Juba, will Khartoum sit back and watch this unfold to its detriment, whilst Sudan’s former insurgents reap ‘their’ oil wealth?
With relations between the Juba and Khartoum already at breaking point, this latest explosion and the subsequent threats make the situation downright dangerous. Along with the construction of a pipeline – which will ‘liberate’ Juba from its despised dependence on Khartoum – the tension between the two states becomes a melting pot.
Will investors such as China and Japan offer assistance for a resolution? Or will neighbouring countries, especially those keen on Juba’s oil reserves, step in? Whether intervention is carried out and by whom is uncertain, but onlookers should be prepared to ‘brace for impact’ at the possibility inter-state conflict between Sudan and South Sudan.
