Six months ago on July 7, 2011, news of South Sudan’s birth reverberated around the world. After two civil wars, thousands of lives lost and five years of preparation, South Sudan seceded from Sudan, becoming the 193rd country of the world and 54th of Africa. The next day, the United Nations Security Council introduced a resolution confirming South Sudan’s admission to the organisation and the end of the United Nations Mission in Sudan (UNMIS). In its place, the new resolution established the United Nations Mission in South Sudan (UNMISS) tasked with ensuring a peaceful transition to democracy.
After the celebrations, a host of issues remains unresolved, as the presence of the semi-permanent UN mission indicates. Six months into its independence, Africa’s newest nation-state is already embattled in conflict and trapped in a humanitarian crisis.
Issues remain over integrating the mosaic of different peoples found within the country. Nearly a hundred different ethnic groups speaking over sixty indigenous languages live in South Sudan. Within this demographic mix, there are an undetermined number of nomadic South Sudanese groups of Arab descent who seasonally populate small portions of the western territories. Durable stability might be sustained by the country’s division into ten states along South Sudan’s three historical territorial delimitations (Bahr el Ghazal, Equatoria and the Greater Upper Nile). However, it is questionable how far the South Sudanese national identity has solidified since the signing of the Comprehensive Peace Agreement with the North in 2005.
Long before the country’s birth in 2011, the Greater Upper Nile region, which includes the Unity, Upper Nile and Jonglei states, was prone to insecurity, territorial disputes and inter-communal animosity. Arguments over land and cattle ownership between long-time residents and returnees from the North have been exacerbated by the state’s scarcity of resources and lack of economic growth.
The combination of a fragile national identity, strong tribal allegiance and large amounts of weaponry remaining from years of conflict have all contributed to civil violence and the marginalization of certain groups. Recent clashes between Lou Nuer militants and South Sudanese soldiers in Pibor County indicate the present degree of division within the country. Calls from South Sudan President Kiir to end to cattle-rustling in Jonglei state have gone unheeded, and confrontations have escalated into a full-blown political and humanitarian crisis that has already displaced 50,000 people, according to the UN.
South Sudan’s humanitarian situation could have been deflected (if not prevented) by better civic infrastructure and steadier revenues. But providing the latter will prove difficult as South Sudan’s economy is heavily reliant on returns from its oil industry.
Oil constitutes 98% of the country’s revenues and these revenues have not so far been directed towards the establishment of solid infrastructure or reliable oil refinery, storage and export apparatuses. Much hope lies in the possibility that economic success could be drive by foreign-funded drilling in which the US, China, Malaysia, India would act as major overseeing powers. But South Sudan’s unstable political landscape remains hostile to foreign investment, which is not forthcoming despite the government’s numerous attempts to attract foreign investors.
As it is, less than 50% of the country’s oil reserves are currently being tapped. And investment would have to develop the infrastructure of South Sudan’s archaic oil industry before the country could profit from its wealth of natural resources.
Worryingly, the current fiscal regime guarantees investors’ the right “to freely repatriate their money in freely convertible currency or dispose of it in any manner they deem fit". This exceedingly accommodating policy grants foreign investors an incredible amount of leeway when repatriating profit. Subsequently, South Sudan will rely heavily on the generosity of foreign investors for reinvestment in the oil sector, giving foreign investors a considerable degree of indirect control over the country's economy. South Sudan’s economic growth and stability will therefore hinge on the government’s ability to create a fiscal regime that is more favorable to its interests and better fitted for its urgent needs.
South Sudan is in desperate need of a sustainable healthcare system, an institution sorely lacking in the midst of a humanitarian crisis. South Sudan's health indicators are dismal: there is one doctor for every 500,000 and the country suffers from one of the worst maternal mortality rates in the world. The government is therefore searching for investment in its healthcare system, but so far with much less enthusiasm than projects related to natural resources. The past prioritisation of oil production over healthcare, if understandable, is now proving costly, and the embattled new republic may have generated a vicious circle of funds allocation vs. funds origination.
Gaining independence was a triumph in itself for South Sudan, but now the freedom-induced euphoria has dimmed and the reality of the challenges facing the new state is evident. South Sudan must overcome integration issues and solidify its new national identity if is to avoid fitting the profile of yet another ‘at risk’ state. A fiscal policy that benefits the country's citizens rather than foreign investors is integral to South Sudan's development at this stage.
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