July 11, 2012 (WASHINGTON) — To resolve South Sudan’s current economic crisis, the new nation needs to embark on a hard, pragmatic, and courageous
approach such as resumption of its oil production and ease further tension with neighboring Sudan, the US special envoy for the two nations has said.
- Princeton Lyman (Reuters)
Early this year, South Sudan shut down its oil production following a dispute with neighbouring Sudan over pipeline charges. Prior to the shutdown, South Sudan also accused Khartoum of allegedly confiscating $800m worth of its oil.
Speaking at an event organised by the United States Institute for Peace (USIP) on Monday, Princeton Lyman said without oil revenue, many development projects in the new nation will be delayed and many basic services cut back.
“It is not enough to announce an austerity budget. It requires prioritization, discipline, hard choices, and utter transparency and honesty. Anything else would threaten the very stability of the country,” said Ambassador Lyman.
“It also demands a courageous and forthcoming effort to reach an agreement that would allow a resumption of oil exports through Sudan. The long term may suggest alternative export facilities, but the new nation cannot afford to lose years of income when the development basis of the country is so low,” he added.
South Sudanese President Salva Kiir Speaking at the occasion marking the first anniversary of the independence of South Sudan in Juba on Monday, July 9, 2012, said the country had run out of money to finance the huge government, and pledged to downsize his cabinet.
Sudan and South Sudan are holding currently talks in Addis Ababa to settle the outstanding issues including oil transportation fees, but Khartoum says the security matters should be resolved first and asks Juba to stop its support to the Sudanese rebels before to tackle the other issues. Juba denies backing rebel groups in Sudan.
However, different sources said the two parties are preparing for a big breakthrough in the talks and they might agree over different pending issues.
Juba said an alternative pipeline will be constructed to transport its oil production through Kenya. It also said an agreement was signed with the Japanese firm Toyota Tsusho to build it together with two refineries.
Kiir in his independence day speech confirmed the construction of refineries but he did not mention the pipeline. Experts say South Sudan needs to raise its output to 500,000 barrels per day to make a new pipeline financially viable.
The 9 July discussion on, “South Sudan: Beyond the First Year” also focused on the numerous challenges and opportunities in Africa’s newest nation, a year after it split from Sudan as a result of a self-determination referendum held in January 2011.
The US special envoy also spoke about the problem of the inter-ethnic and inter-communal conflicts, which he said caused widespread suffering, death and displacement in South Sudan in the past year.
“This cycle of violence must end if the nation is to experience sustained progress toward peace and prosperity,” he said.
Although Lyman acknowledged the recent peace process initiated by the southern government the major areas of such conflict, he urged the latter to also focus on the larger needs that lie ahead, beyond the mere grievances of individual communities involved.
He however said South Sudan’s leaders must address a challenge that many new nations have faced before, through devising mechanisms to build a society that celebrates its ethnic, cultural and religious diversity, while strengthening a shared identity and common destiny as South Sudanese.
Lyman also urged South Sudan government to institutionalise basic freedoms, to include the right of creating political parties and a vibrant and free civil society.
“A free and unmolested press is a necessary component for a true democracy, ensuring that all voices and opinions may be heard and giving citizens an avenue to hold their government accountable,” he said, while expressing optimism that South Sudan will strive to foster respect of such fundamental rights that will in turn strengthen its democratic, civic and national identity.
Meanwhile, the US special envoy assured the two nations of the unwavering support from the international community and all its partners, while urging South Sudan to work with them in close coordination to build the sort of state that is worthy of past sacrifices, and that will deliver a “peace dividend” for its citizens’ benefit.