By Magdi El Gizouli
September 23, 2013 - After almost two years of agonizing budgetary worries Sudan’s finance minister, Ali Mahmoud Abd al-Rasoul, pushed forward a plan to abolish government subsidies on fuels (including cooking gas) and wheat, a decision that the government failed to implement back in 2012 and is now apparently determined to enforce whatever it takes. The National Congress Party (NCP) bloc in parliament, effectively the entire house, voted down the scrapping of fuel subsidies in the 2012 budget draft but then agreed to a package of austerity measures, termed the three years rescue plan, including a gradual reduction of subsidies in June 2012 following on South Sudan’s decision to suspend oil production in January. The plan is copied letter and comma from recommendations regularly repeated by the International Monetary Fund (IMF) since the independence of South Sudan in 2011. In its 2012 Article IV report on Sudan, the Fund estimated the cost of subsidies to be a total of 1.24 billion US dollars in 2013. The IMF made the argument that it is not the poor who benefit from fuel subsidies but rather the affluent Sudanese who have cars and consume more fuel, a proposition that President Bashir has been drumming with little if any original contribution from his side. Emboldened by the expert opinion of khawaja finance gurus, the President and his aides vigorously advocated for the indispensability of the ‘economic reforms’ in the face of considerable resistance within the party, the rejection of opposition forces and public displeasure. Unlike in June 2012 when he preferred to watch over the debate President Bashir has taken it upon himself this time to lead the charge.
The government’s keenness to implement the IMF’s recommendations seems partially related to its bid to secure the relief of Sudan’s burgeoning foreign debt; the 2012 calculation was 41.5 billion US dollars in nominal terms of which eighty four percent was in arrears. In its 2012 report the IMF declared Sudan potentially eligible for relief under the Heavily Indebted Poor Countries Initiative (HIPC) noting that the country has progressed well towards the target of satisfying the conditions of the initiative. The related fragment of the report is worth quoting in full: “The government has taken three important steps: (i) it has reconciled over 90 percent of the end-2010 external debt stock in collaboration with creditors; (ii) Parliament has approved an ambitious interim-PRSP [Poverty Reduction Strategy Paper] in June 2012; and (iii) Sudan has implemented 13 Staff-Monitored Programs (SMPs) with the Fund since 1997, establishing a sound track record of cooperation on economic policies and payments. Furthermore, Sudan has indicated its desire to continue demonstrating a strong commitment to cooperation with the Fund on policies and the payment of arrears, also formally in the framework of a new SMP (for which negotiations could start later this year). Meanwhile, the government is collaborating with the World Bank on an Interim Strategy Note, which would determine the development objectives for the next two years.” Nada al-Galaa, one of Sudan’s star singers, was forced a few years ago to defend her reputation in lyrics after a video recording of a performance she held ‘bare-headed’ to entertain a Nigerian businessman identified as Mr al-Shareef and his guests in a hotel found its way to the internet. Nada sang “al-Sharif is pleased with me because I love my art” to mock her detractors. “The Lexus was a present and not the reward for a personal relationship,” she explained in the next line. Replace Mr al-Shareef with Messrs IMF and you have the government’s policy rationale, the detractors being the people under its rule. Whether the IMF will reward the Sudanese government with the Lexus it expects remains an open question. The government’s hopes in that regard have been repeatedly dashed, partially because of its failed relationship with its own people. President Bashir’s long reign, since 1989, has not witnessed a single day of peace throughout the country, before the secession of South Sudan in 2011 and thereafter. In his mind, this predicament is the product of a foreign conspiracy that unfolds to no end, tireless and timeless.
Apart from the NCP’s leadership council, which hastily approved the decision to lift subsidies in a late night meeting chaired by President Bashir on 12 September, no political formation in the country sounded its support for the measure first hand. The National Umma Party (NUP), the Popular Congress Party (PCP) and the Communist Party declared their rejection of the government plan and vowed to mobilize popular protest against it. Even the Democratic Unionist Party (DUP), the NCP’s partner in the cabinet, voiced a similar opinion. The Just Peace Forum (JPF) issued a statement announcing its opposition to the economic measures and the party’s chairman al-Tayeb Mustafa wrote in al-Intibaha ridiculing the National Assembly for failing to challenge the government on the issue. Arguments for and against the measure were traded between officials of the NCP, the first claiming that subsidies do not benefit the poor anyway and were undermined by cross-border smuggling of fuel for sale in neighbouring countries, and the second stressing the possibility of a popular backlash. Prominent imams in Khartoum, including the imam of the city’s grand mosque, Kamal Rizig, criticized the government’s anticipated measures in their sermons on 13 September. Rizig told worshippers the way forward was to reduce government expenditure rather than burden the people with further increases in prices. In response, the security authorities ordered press silence on the subject and dissenters were punished with confiscation. On a single day, 19 September, the National Intelligence and Security Service (NISS) seized all copies of three newspapers, the left leaning al-Ayaam, al-Jareeda and Tayeb Mustafa’s al-Intibaha. In parallel, the finance minister and the governor of the Bank of Sudan were instructed to exercise their persuasion muscles with leaders of the opposition. The two gentlemen held a meeting with Hassan al-Turabi, and knocked the doors of the Communist Party. The patrons of the DUP and NUP, Mohamed Osman al-Mirghani and Sadiq al-Mahdi, received separate visits from President Bashir himself, each at his domicile. It was to his effective constituency that President Bashir paid greatest attention. The President took his economy team to meet senior officers of the Sudan Armed Forces (SAF) and conferences of the NCP’s students’ and women sectors were hurriedly organized for the President to speak. Worn out by their own campaign the NCP bigwigs started to fret as it were. The Minister of Finance said the Sudanese were spoiled by years of luxury and now refuse to accept the necessity of austerity. “The houses were ugly” and “people only heard of pizzas while today pizza shops are everywhere…there were only old pickups in the country and now there are cars of all models,” he stated on 18 September to reporters prohibited from splashing out his pronouncements the day after. President Bashir won the cup in that regard. Caught up in a rant, the President challenged anybody who knew what a hot dog was before his rule to come forward. In the same speech to the NCP’s student sector on 19 September he declared that sixty percent of the police force had deserted the service over the past two years because of low wages, hot dogs notwithstanding.
The crowning event of the NCP’s campaign was a presidential press conference on the evening of 22 September aired live. Beside the President sat the information minister, Ahmed Bilal Osman, a migrant from the DUP. To kick off the event the chairman of the Islamic Movement’s Shura Council, a four hundred members central committee, and head of the NCP’s parliamentary caucus, Mahdi Ibrahim, recited convenient verses of the Quran, ones reminding the believers of the alternation of plenty and scarcity and promising those who hold strong to their faith when challenged by persecution generous reward. The President delivered a macro-economic argument for the lift of subsidies, stressing the ills of the economy - excess consumption over production, imports over exports and government expenditure over income, crying all the while over the loss of oil with the secession of South Sudan, and concluded with the oft reiterated proposition that fuel subsidies benefit high consumers rather than the deserving poor. Instead, he declared, revenues spared through the scrapping of subsidies will be channelled to raise wages in the government sector and boost production. The President spoke the language of an incumbent with one term behind him attempting to clear his mixed record for a second try. His memory I suppose registers the twenty four years since he assumed power in 1989 as just that. Whatever he says however is hollowed out by the hard spade of practice. The revenues the government had commanded in the years of oil plenty were squandered in a manner that entrenched the imbalances he spoke of rather than correcting them producing a government sector hypertrophied out of all proportion by co-optation and nepotism, an immense gap between a wealthy minority and a majority of nas who can only afford their envy, and a rural economy that has imploded to yield an ever expanding resources conflict. The short version is: President Bashir and his ever recycled government cannot be trusted with money. A witty Omdurmani granny told me, if he is not ready to subsidise our cooking gas we are not ready to subsidise his hot dog, let alone his minister’s pizza.
The author is a fellow of the Rift Valley Institute. He publishes regular opinion articles and analyses at his blog Still Sudan. He is reachable at email@example.com