Sudan: Dire Times Ahead

By John T. Haldane

During the early and mid-1970s, Sudan had high hopes of playing a key role in a new Arab economic order. The Arab oil-producing states were in search of productive investments for their accumulating revenues. One of the main targets was Sudan, which was to become "the breadbasket of the Middle East." Investment in Sudanese food production was to alleviate the Arab world's critical dependence on imports from Western Europe and the United States. Sudan, with an estimated 192 million acres of potentially cultivable land, of which only 10 percent was under cultivation, received millions of dollars of Arab investment. This, combined with Sudanese labor and ample water from the Nile, was to have achieved a developmental breakthrough.

Ten years later, the bubble had burst. Few of the projects were completed on time. Production targets rarely were met. Output from established agricultural schemes and the processing plants set up to handle the produce gradually declined. Having borrowed huge amounts of money, the Sudanese government suddenly found itself facing an immense debt.

The country's infrastructure could not handle the new needs. Sudan, a country about as large as the United States east of the Mississippi, has only 1,200 miles of paved roads. The British-built railroad has not been properly maintained, and now carries less freight than it did in 1947. Other parts of the country's infrastructure, as one analyst put it, are operating "as if the 20th century never happened."

With a per capita gross national product of only $440, Sudan is one of the world's poorest countries. It depends heavily on aid from international agencies, Saudi Arabia and the United States. Current American aid now exceeds $450 million. This includes over $200 million for emergency famine relief and $45 million in military assistance. Only Egypt on the African continent gets more American taxpayer dollars. The Saudi Fund for Development, the Kuwait Fund for Arab Economic Development and the Arab Fund for Economic and Social Development have provided over $330 million for transportation, communications, industrial and agricultural projects. The World Bank has earmarked a 50-year soft loan of $30 million to help Sudan improve its power supply, even though the nation still owes the IMF $143 million. (The IMF has pressed for changes in Sudan's economic policy, including devaluation of the Sudanese pound and an end to food subsidies.)

An Agricultural Economy in Trouble

Sudan's economy relies almost completely on agricultural production, including cotton, gum arabic, grain, rice and sugar. Textile and food processing industries make a small contribution to the nation's economy. However, a series of droughts have cut farm production by an estimated 20 percent. And international prices for cotton, Sudan's largest foreign currency earner, have collapsed. The 1984 grain harvest of only 1.5 million tons fell an estimated 1.9 million tons short of the country's needs.

The bright spot on the economic scene is the oil sector. The Chevron Oil Company began prospecting along the northern edge of Bahr al-Ghazal province in 1975. Other Western oil companies have followed. Even though the oil companies are committed to the major oil exploration expenditures, the Sudanese government must provide the funds for associated infrastructural expenses, including a 1,000-mile pipeline to carry the crude oil from the fields to Port Sudan.

Sadiq Mahdi, an Oxford-educated pro-western moderate, recently assumed the leadership of the Sudanese Government. He is the great-grandson of the revered leader whose forces defeated British General Charles Gordon at Khartoum in 1885. Experts believe Mahdi has a good chance of resolving the country's most serious political problem, a growing civil war between the Muslim north and the Christian and animist south. On May 10 he announced an agreement with southern Sudanese parties on their participation in a coalition government. Mahdi's statements on revitalizing the economy have been vague and restricted to increasing agricultural production and rehabilitating the industrial sector. He will need to come up with a comprehensive program if he is to get the Sudanese economy back on a paying basis.

Mahdi will have his hands full. The inflation rate last year jumped to more than 70 percent. Sudan's foreign debt is now over $10 billion. Most experts believe that Sudan will never be able to pay off its debt without generous rescheduling by commercial banks and the outright cancellation of debt obligations by bilateral and multilateral lenders.

Economy Hurt By Continuing Brain Drain

A country such as Sudan, with a population of 22 million, normally could expect to call on its educated administrative and technical cadres to assist in the country's rehabilitation. However, an estimated 2 million of Sudan's best-trained people have left the country over the past 10 years for jobs in the Gulf states and in Europe. While some foreign exchange is earned by Sudan through their foreign remittances, the overall impact has been to limit severely the government's ability to control its economy.

Although comments by foreign experts on the state of the Sudanese economy have been frequent since the overthrow of President Nimairi last April, few of them have been positive. A western economist working with the Sudanese government in Khartoum said: "The short and medium-term prospects for Sudan are grim." One international lending agency warned in a report late last year that without "very generous aid" and dramatic internal economic reforms, the only likely future for the country is "a sharp and chaotic downward movement of the economy at great cost to the Sudanese people."

But Sudan is too important a part of both Africa and the Middle East to be written off. "The United States, the Soviet Union and the regional powers in the Middle East and Africa all have interests that are affected by the successes and failures of political leadership in the Sudan," stated John Voll in a recent Current History article. The U.S. Government is well aware that it needs Sudan for economic and strategic reasons. It is supporting President Mahdi and is considering a new request for $158 million in aid.

John Haldane is a specialist in Middle East affairs who has served as a foreign service officer in Baghdad, Beirut and Cairo, and as an international economist in the Departments of Commerce and Treasury.