Opinion: Sudan’s Economy on Verge of Collapse as US Lifts Sanctions

Published February 11th, 2018 - 04:00 GMT
The lifting of U.S. sanctions, hailed by many, has simply proved to be the starting point for utter disaster in the Sudanese economy. (AFP)
The lifting of U.S. sanctions, hailed by many, has simply proved to be the starting point for utter disaster in the Sudanese economy. (AFP)

By Eric Reeves

The Central Bank of Sudan, which has only a very small amount of foreign exchange currency (Forex), is reported to have banned any non-governmental agent or business from using its Forex for imports of any kind.

In other words, the National Islamic Front/ National Congress Party regime is determined to arrogate to itself all Forex - also known as "hard currency", or currency not subject to the massive inflation rates presently ravaging Sudan.

This will be disastrous for Sudan. Here's why.

Banning non-governmental agents from the country's foreign exchange means that even food and medicines cannot be imported, and both are commodities desperately needed by the people of Sudan. The ban also means even greater inflation for the price of bread, the staple food for many Sudanese families. Having already suffered a 300% increase in the price of bread with the promulgation of the 2018 budget in late December 2017—and another 25% increase this past weekend—prices are set to skyrocket even further upwards. The ban on use of private Forex to import even the most critical medicines will certainly cost lives, and put many medicines beyond the reach of millions of Sudanese.

The rapacious effort to deny the use of Forex for imports reflects a desperate attempt by the regime to halt the precipitous slide in the value of the Sudanese Pound, which continues to lose value at an extremely rapid rate because it is not backed by hard currency. Black market trading in the U.S. dollar, the benchmark hard currency, reveals that there is no bottom to the decline.

Professor Hamid Eltigani, head of the Department of Public Policy and Administration at the American University in Cairo, is reported to have declared that “economic measures that will have disastrous consequences in a matter of days…these measures by the government will force the flight of investors, exporters, importers, and halt trade.”

The lifting of U.S. sanctions, hailed by so many foolish observers, has simply proved to be the starting point for utter disaster in the Sudanese economy. The root issue was never sanctions, but decades of gross economic mismanagement and equally gross self-enrichment by the Sudanese regime—a fact that the international community simply refused to acknowledge. The most spectacular example remains that of Edward Gemayel, speaking in 2013 as the IMF's Mission Chief for Sudan:

Mr. Edward Gemayel, the IMF's Mission Chief for Sudan noted that "Sudan has a long track record of implementing sustainable economic policies." (IMF press release, October 12, 2013)

This was cynical mendacity on the part of Gemayel, but had no effect on his career and gave cover to those who wished to ignore the policies we see culminating in the present catastrophe. But this looming catastrophe was there for all to see at the very time Gemayel was serving as dissimulator-in-chief for the Khartoum regime. 

It was simply not in the perceived self-interest of various international actors to acknowledge the scale and consequence of Khartoum's immensely destructive economic policies or the extent of the kleptocracy that lies at the very heart of the regime, and generates most of its "political support".

Now the people of Sudan will suffer terribly, one way or another, as a consequence of this self-serving myopia. Further demonstrations and popular protests are inevitable—but so, too, is violent repression by the regime and its ruthless security forces. Newspapers will continue to suffer extreme censorship, especially when it comes to the topics of the economic crisis or protests; demonstrations will be met with increasing violence—excessive and indiscriminate use of tear gas; beatings; incarceration and torture (especially of political leaders and activists); and ultimately, if Omar al-Bashir determines it necessary for his survival, he will call for the use of live ammunition accompanied by "shoot to kill" orders, as was the case in September 2013.

Will the army continue to be quiescent in the face of the slaughtering of Sudanese civilians? There were signs in September 2013 that many in the army were appalled, and at least one major left the army in protest. The National Intelligence and Security Services, Military Intelligence, and other intelligence organizations will undoubtedly stay loyal to al-Bashir and his cronies: their lives and livelihoods depend upon it. But the army will survive regime change as an institution if one thoroughly corrupted by 29 years of purges and re-shaping by the NIF/NCP regime. Its mid-level officers—especially colonels and majors—may well decide that the only way to regain any favour among the people of Sudan is to support them if they again face other "shoot to kill" orders issued to the police and security services.

But in the short term, only increasing hardship and violence loom for the people of Sudan—hardship and violence that the international community ignores and refuses to address in its relations with the Sudanese regime.

Editor's note: The views expressed here are those of the writer and do not necessarily reflect those of Al Bawaba. 

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