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‘West waging economic war against Sudan’

Sudan Tribune | April 17, 2012

KHARTOUM – A senior Sudanese official has accused Western countries of waging an economic war against his country and aiding neighbouring South Sudan in its alleged support of Sudanese rebels.

Nafie Ali Nafie, a Sudanese presidential assistant, said while addressing a rally in the capital Khartoum on Tuesday that the West is aware that “the rebels and mercenaries” had destroyed oil facilities in the Heglig area which was captured by South Sudan’s army last week.

“They [Western countries] believe this could weaken the Sudanese economy” he said before adding that the government knows how to run the battle and organise its priorities.

Heglig, which produces half of Sudan’s daily oil production of 115,000 barrels a day, was occupied by South Sudan’s army last week in the most dangerous escalation of military confrontations between the two neighbours since the south gained independence last year.

In his speech, Nafie said that Sudan must talk to its friends in the international arena in order to prevent Western countries from supporting Sudanese rebels of the Sudan People’s Liberation Movement North (SPLM-N) via the UN.

His statement appears to be related to international efforts spearheaded by the US to allow aid groups to the country’s border states of South Kordofan and Blue Nile, where Sudan’s army has been fighting SPLM-N rebels since last year.

Nafie went on to dismiss concerns that his government would use the war over Heglig as a pretext to increase repression of dissent but he put a caveat saying that Khartoum will not tolerate “traitors”

“There will be no curtailment of public liberties but traitors are entitled to no freedom” he declared.

Nafie further accused the Sudanese Revolutionary Forces (SRF), a rebel coalition including the SPLM-N, of occupying Heglig and then handing it over to the “enemy”, meaning South Sudan.

He described SRF’s supporters as “agents and traitors” and reiterated Khartoum’s commitment not to negotiate with South Sudan’s government.

He further sought to allay concerns that the government would terminate fuel subsidies against the background of losing Heglig’s oil, saying that such actions would only occur within calculated measures.

Sudan admitted this week that the loss of Heglig’s oil will affect government income but government officials said that plans have already been initiated to assimilate the deficit.

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Sudan’s projected economic contraction in 2012 worse than expected

Sudan Tribune | April 17, 2012

WASHINGTON – The International Monetary Fund (IMF) on Tuesday revised down its forecast to Sudan’s economy to show a significant shrinkage in 2012.

According to the latest release of the World Economic Outlook (WEO), the East African nation achieved a -3.9% growth in 2011. The figure includes South Sudan only up until July 2011 when the country officially broke into two.

In 2012, Sudan’s economy will contract by -7.3% before improving in 2013 to -1.5% and to 1.7% in 2017.

The loss of oil-rich South Sudan last year meant that Sudan no longer has access to billions of dollars worth of crude reserves. Oil was the main source of foreign currency and revenues for Sudan prior to the country’s partition.

To make matters worse, South Sudan managed last week to take over one of Sudan’s major oilfields of Heglig in South Kordofan through a military occupation that took everyone by surprise. Analysts say that damages to the facilities in the area, which produces half Sudan’s oil, as a result of military operations means that production will not resume anytime soon.

Furthermore, landlocked South Sudan shut down its own roughly 350,000 barrels per day in January in a row over how much it should pay to export crude via Sudan. The latter has built in oil transit fees as part of its budget at the rate of $36 per barrel.

Khartoum has undertaken measures since last year in anticipation of the sharp curtailment in revenues. This includes cutting government spending, partially lifting subsidies and banning a wide range of imports to stop depletion of foreign currency reserves.

But nonetheless, food prices soared to unbearable levels for many citizens prompting limited demonstrations in the Sudanese capital last year. The exchange rate of the Sudanese pound also deteriorated to unprecedented levels amid sharp shortage in hard currency which further fueled price hikes.

The IMF projected consumer prices in Sudan to increase by 23.2% in 2012 and 26.0% in 2013, which is the highest in the Middle East region.

Sudan has turned to a number of friendly nations seeking help to shore up its budget deficits and boost its foreign currency reserves directly or through investments. So far only the Arab Gulf state of Qatar made a $2 billion pledge to assist in the form of buying Sudan government bonds and investments in several economic sectors.

Sudanese officials assert that their country will overcome the loss of oil revenue by exporting more gold and revamping the agricultural sector.

However, this week the Sudanese finance and national economy minister Ali Mahmood Abdel-Rasool said that the 2012 budget as it stands is unsustainable and needs to be amended.

The pro-government al-Rayaam newspaper reported that the Sudanese parliament is poised to approve a second round of lifting subsidies on fuel amid strong objections from the labour union.

April 18, 2012 - Posted by | Economics, Illegal Occupation | , , , , ,

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