Promises not kept

Khartoum is cashing in on the oil boom, which is bringing revenue and infrastructure into the capital. Meanwhile the South faces incredible poverty and the demands of rebuilding a nation that is completely devastated from over twenty years of bombing and attacks. It is barely benefiting at all from these monies. One of the stipulations of the CPA was wealth sharing in regards to oil revenue.

An island unto itself
Aug 3rd 2006 KHARTOUM
The Economist

The capital benefits most from an economic boom


The conversations tend to be very different, but very predictable, when Khartoum's bourgeoisie gathers for espressos and croissants at the trendy new Ozone café. Americans and Europeans, mostly aid-workers, swap horror stories about the latest depredations in Darfur, Sudan's war-ravaged western region, or bemoan southern Sudan's “lack of capacity”. At the Sudanese tables, however, Arab men, and often women, josh about their city's brand-new traffic lights, which most still ignore, share information about new government privatisations and greet old friends who have returned to live in the Sudanese capital after years abroad.


Khartoum moves up in the world
Both views of Sudan, Africa's largest country, are valid. It is just that the Western focus on Darfur, where about 2m people are living in refugee camps as the result of a still unresolved war in the region, has obscured another fact about Sudan: the country is booming. With low inflation, GDP growth of 8% in 2005 and 13% projected by the IMF this year, Sudan is one of the fastest-growing economies in Africa. Furthermore, this success has been achieved despite the fact that the country has been subject to American sanctions since 1986, the year that the IMF ended financial assistance to the country.

Oil undoubtedly plays a big part in this boom, accounting for about 80% of the country's exports, but it does not explain all the gains. Indeed, the IMF has given guarded praise to the policies initiated by Sudan's government to liberalise the economy. It is not the kind of attention that the Islamist regime in Khartoum, accused of genocide by America for its actions in Darfur, is accustomed to.


Oil, structural adjustments that began in 1998 and the relative political stability that followed the signing of a peace deal with rebels in the south last year are encouraging foreign investment, particularly from China and the Gulf states. More needs to be done to tackle corruption and eliminate stifling regulations, yet new economic opportunities are enticing thousands of the country's rich and educated diaspora to return. More and more, Sudan's ruling National Congress Party is toning down its hitherto robust Islamist language; the new emphasis is on economic development.

However, it is almost exclusively the Arab heart of the country that is benefiting from the boom. Nearly $3 billion of foreign direct investment has come to Sudan, but well over half of it has gone to the capital and its hinterland. In the past year hotels, telecoms companies, light industries and even a Thai massage parlour have opened in a city that is still nominally ruled by sharia law.

The development that most epitomises Khartoum's new dynamism is Alsunut. Meaning “point of meeting” in Arabic, this behemoth of a residential and office project is now under construction on 65 hectares (160 acres) of land where the Blue and White Niles converge. The $4 billion project, the result of a public-private partnership between the government and DAL Group, Sudan's leading company, will transform the city by adding 63 towers varying between 15 and 35 floors in height. Over half the office space has already been sold to local and foreign companies.

However, for all the new prosperity in Khartoum, evidence of the boom outside the capital is hard to find. Progress towards improving the lot of the majority of poor Sudanese is plodding. For most people, electricity is still rare and most schools still hold classes under trees.

And, crucially, Sudan's improved economic outlook has not had any discernible impact on the mainly Christian and animist south. Hundreds of thousands of displaced southern Sudanese are leaving their refugee camps in the north and returning to what remains one of the poorest areas in Africa. Indeed, the pace of recovery in the south is so slow that some aid agencies report that villagers have started throwing sticks and stones at their passing convoys as a form of protest.

The inequitable distribution of the country's wealth has always been a large factor in stoking rebellions in the south, in Darfur and in the east against the central government in Khartoum. If that remains true of this current boom—which may last only as long as the high price of oil—it will be a huge missed opportunity to reduce some of the inequalities that still threaten to pull the country apart, with disastrous consequences for all Sudanese.