What is behind the economic crisis in Sudan?

Omar al-Bashir. Image via Al-Jazeera Flickr.

In October 2017, the Sudanese public was thrilled after the decision by US President Donald Trump to lift economic sanctions against the country, in place since 1997. Sudanese social media buzzed with great expectations. This enthusiasm was legitimate given the drastic impacts of two-decades of sanctions on Sudanese society, but how realistic was the Sudanese public in their hopes for a brighter future?

The US imposed restrictions on Sudan in 1993 listing it as one of the countries that supported “terrorism.” In 1997 the Clinton administration imposed the embargo on the country claiming that it hosts terrorist groups, and in 1998 it bombed a pharmaceutical factory in Khartoum. In 2016, the Obama administration announced that the sanctions would be lifted as a response to a campaign against the sanctions led by Sudanese individuals. Obama stipulated five conditions and gave six months to the Sudanese government to fulfill them.

Sadly, the hopes of revitalizing the Sudanese economy and boosting social and economic development were negated within a month after the decision to lift the sanctions. Drastic inflation has hit the Sudanese economy causing near implosion. This is the result of three major factors that underpin Sudan’s political and economic entanglements with the West.

Demonstrations in all Sudanese cities have been ongoing since the beginning of January, protesting the high prices of commodities, specially bread. Many Sudanese families have reported that they are eating only one meal a day. And many people claim they cannot afford to buy medications. The increase in commodities was not an ephemeral episode.

The first factor is what the Sudanese government’s “Altamkeen” (empowerment and solidification) policy. This policy was meant to empower the affiliates of the Islamist party, led by Dr. Hassan Alturabi, that came to power in a military coup in 1989. The policy promotes objectives of the Islamist political project by all economic, social and political means available. It translates into using the state and its institutions as tools to serve party goals. The Altamkeen policy is better understood by linking it to the history of the Islamist group with the West.

Islamists in Sudan, like other political Islamist groups in the region, were nurtured by the West during the Cold War to combat leftist parties. The West had been maneuvering to influence the policies of Sudan since its independence in 1956, pushing it to take right-wing positions through a series of events that included coups, interventions in parliamentary politics and assassinations. In the mid-1970s Islamists’ influence was particularly powerful and the party imposed the International Monetary Fund’s (IMF) policies of lifting subsidies, liberalization and privatization. It also worked to impose Sharia Law. The IMF policies created a climate of profiteering and corruption that benefited the Islamist group through the creation of multiple businesses, banks, and companies. However, in 1985 the Sudanese public rebelled against the IMF policies and its social impacts, and also against the Sharia Law toppling the dictatorship through a popular uprising. The election of a democratic government jeopardized the economic power of the Islamist group and threatened its political goals. It then moved to retake power, and eventually did so through a military coup in 1989.

The Altamkeen policy is a continuation of the project the Islamist group started in the mid-seventies with the support of the US. The Sudanese government adopted neoliberal policies: privatization, lifting subsidies and a free-market economy. It sold major enterprises that were owned by the public and the government. Selling those enterprises was accompanied by major corruption, and profits from these businesses were reaped by a minority of stakeholders.

The second factor is the economic sanctions against Sudan. The sanctions have affected the technological and social development of the country. Travel restrictions on Sudanese people have drastically affected an exchange of skills, education and training in the country, and negatively impacted economic development.

The third factor contributing to the current economic debacle in Sudan is the austerity project of the IMF, which has resulted in the staggering accumulation of debt, stunted economic growth, and social and political destabilization. For instance, in 2001 the IMF praised the economic performance of Sudan — despite the sanctions — and announced it would facilitate debt relief if the government followed its lead. The independence of South Sudan in 2011 caused a loss of 46% of the national income, causing a major shock to the Sudanese economy, which the government, expectedly, did not prepare for. The IMF intervened again in 2013 and 2017 and pushed for further austerity measures and liberalization. This caused commodity prices to soar and the frustrated population took again to the streets. In November 2016, the Sudanese public organized a successful civil disobedience campaign for a week, which led to massive arrests. Since the beginning of January 2018 civil society demonstrations have been constant in Sudanese cities leading to massive arrests.

The Altamkeen policy could be considered a recipe for corruption and nepotism, yet the IMF policies have emboldened it, giving it international legitimacy, while the liberalization of the economy has been shouldered by the masses. Every time the government announces austerity measures it appeals to the public to be thrift and asks them to be patient, attributing the economic difficulties to the sanctions. At the same time the government spends munificently on its security apparatus. The government also relies on high taxes and other tricky means of collecting money from the public thereby hindering production and victimizing the ordinary Sudanese.

The lifting of sanctions without political reform will only exacerbate the current economic crisis of the country. It would have been a golden opportunity for economic growth and social development if it was accompanied with the right political reform to reinforce transparency and accountability. It would have stimulated an economy, potentially drawing thousands of Sudanese in exile to return and participate in the development of the country. It would have arrested the brain drain that has been taking place for three decades. The need is ever pressing for major political reform that addresses endemic corruption and encourages political and economic participation.

With a weak and divided opposition that lacks a comprehensive plan for a political transition, the only option for young activists and youth movements will be to continue demonstrating.

Further Reading

Exile, Return, Home?

Many will read Sisonke Msimang’s new memoir for its musings on exile and home, but it is also a political telling of the complicated South African transition.