Sudan: Navigating War, Debt, and Political Turmoil – Challenges and Solutions

By Elmuntasir Ahmed

Historical Context:

IN SUDAN, there’s a lot that’s led to crisis over the years: famine, land and water issues; they all stem from deep-seated factors that are made worse by civil conflict and disputes in the region. This is also compounded by involvement of international financial institutions such as International Monetary Fund (IMF) and World Bank among others as well as Arab regimes that interfere with Sudanese affairs.

Analysis of Sudan’s economic reality points to several key conclusions, with civil war being the most destructive factor on the country’s growth performance. The direct impact of the war is not the only concern; its overall effects on growth include increasing political instability, ill-considered development policies, and ineffective institutions. Consequently, investing in peaceful conflict resolution remains the best option for Sudan.

Successive governments in Sudan bear significant responsibility for these crises, as they have failed to provide basic social protection and develop the necessary infrastructure to ensure food and water security. Instead, their policies have favored the ruling elite and foreign companies, exacerbating economic and social inequality.

International financial institutions and imperial powers, however, are trying to impose austerity and economic liberalization measures upon Sudan as a prerequisite for giving it financial assistance and support from outside. 

These policies which promote privatization, market opening, and reduce the role of the state in the economy only help big businesses and ruling elites; they make things worse for the poor and middle class.

Arab regimes encourage conflict in Sudan through financing warring factions, fanning tribalism and religious hatreds. This is part of their strategy to continue wielding influence over political dynamics within the region as well as its economy.

It appears that Sudan needs comprehensive developmental strategies and radical socialist changes focusing on achieving social and economic justice, protecting natural resources, and enhancing the state’s role in directing the economy for the common good, rather than adopting austerity policies that deepen social divisions.

While neoliberalism dominates global culture through media, Sudanese society is still struggling to determine how it should change, whether that be through modifying the current system or demolishing it entirely. This paper highlights some of these challenges in a critical manner and provides an overall perspective on dealing with them.

A contemporary reading of history to answer this question emphasizes the need for comprehensive change through a peaceful social revolution. It highlights the failure of reform movements to achieve social change and discusses the challenges facing attempts at social change in our current era, stressing the importance of utilizing all available forms of struggle to build a strong movement capable of defeating the capitalist system and achieving socialism.

Following the Islamist coup in Sudan in 1989, the National Islamic Front presented what it called the “Economic Salvation Program 1990-1993,” adopting neoliberal policies that privatized state institutions and relied on directives from the World Bank and the International Monetary Fund. The adoption and continuation of these policies during the transitional period led to the destruction of Sudan’s economy, which was moving towards unbalanced capitalist development.

These economic policies resulted in a decline in consumer purchasing power and exacerbated the economic crisis, with many factories closing their doors and agricultural failures recurring, threatening famine for about 40% of the population. Additionally, the country witnessed waves of protests demanding wage improvements and working conditions.

• The Impact of Wars and Coups on Debt Accumulation:

The war that erupted in 2023, as the latest in a long history of civil wars in Sudan, has led to further economic disasters, as the capitalist parasite class clashes and each side seeks to destroy the other. Each party’s main goal is to thwart the revolution, liquidate active membership in all its components, displace populations, and deplete national resources.

However, Sudan lacks economic data making it difficult to make accurate predictions about the future of its economy. Sudans economy is performing badly which is indicated by the fact that it is regarded an underdeveloped country with poor health care systems, less-educated people and lower individual income. The available information shows a decline in government expenditure relating to health sector, fall in educational standards and decrease in personal incomes of individuals.

The recent economic situation in Sudan suggests a recession and deterioration that requires extensive restructuring of economic policies and creation of an enabling environment for investment as well as promoting productive sectors for sustainable development.

A major challenge facing Sudan is multidimensional poverty affecting the population. Official reports indicate that approximately 52.3% of the population suffers from multidimensional poverty, equivalent to about 20 million people.

This reflects a high level of poverty, especially when compared to local poverty standards. The multidimensional poverty intensity rate is about 53.4%, equivalent to about 11 million people.

Multidimensional poverty, in this context, encompasses aspects such as health, housing, income level, employment, security, personal freedom, education, and property use, factors that, if taken into account, expand the targeting scope of relevant state agencies and make it more accurate and just.

Reports also indicate minimal variation in multidimensional poverty dimensions among deprived individuals, indicating convergence in numbers among the poor. The multidimensional poverty index estimates the population suffering from severe poverty at 30.9%, or about 6 million people.

Moreover, looking at economic growth and inflation in Sudan during the period from 2017 to 2021, reports before the war period show that Sudan’s economic performance was the worst among COMESA countries, with a contraction in growth rates during that period.

Currently, Sudan faces immense economic challenges due to its external debt of about $62 billion in 2021, after a reduction of approximately $15 billion by Paris Club countries.

Delay interest accounts for a large percentage of this debt, reaching about 89% of the current debt and 43% of the cumulative debt for 2021, without taking into account the cessation of debt repayment since the military council’s coup against Prime Minister Hamdok, who led a partnership government with several politically diverse components advocating for a new liberal economic direction.

Sudan faces serious economic challenges due to these massive debts, which have hindered its efforts to achieve development and improve citizens’ livelihoods in the past. Furthermore, delay interests increase the debt burden on the country and make its debt management strategies more complicated.

The previous transitional government of Sudan, led by Dr. Hamdok, found itself facing difficulties as it classified debt as binding debt and dealt with it accordingly, responsive to global axis pressures and donor club demands.

It is worth mentioning that the writer of the article tends to consider a very large proportion of Sudan’s debt as odious or repugnant debt. Odious debts are those borrowed by a government or illegitimate regime without benefiting the citizens or with their consent, or used for unlawful purposes that harm the public interest.

The concept is rooted in peoples’ rights and international responsibility, allowing countries to refuse to pay these debts in some cases, provided certain basic conditions are met. The borrowing regime must be illegitimate, and the funds must be used for purposes contrary to the public interest or contribute to human rights violations.

Additionally, the people must not benefit from the borrowed debts, nor should there be approval by the people or their representatives. All of these conditions match Sudan’s situation, similar to other examples.

Odious debts are a legal and ethical issue, involving international responsibility. Therefore, they must be subject to rejection by debtor countries based on legal and ethical principles, relying on the history of use and purpose of the borrowed funds.

Overall, the significant economic and social challenges facing Sudan as a result of multidimensional poverty and massive external debts require urgent intervention to improve citizens’ living conditions.

The general picture of the Sudanese economy reflects fundamental shifts due to the wars and conflicts the country has experienced, leading to deteriorating infrastructure and the collapse of state institutions. In this context, the Sudanese economy is experiencing tension and instability, facing significant challenges affecting several essential aspects.

One of the main challenges facing the Sudanese economy is the collapse of state institutions, as the government has lost the ability to provide basic services to citizens due to infrastructure destruction and government efforts scattered due to wars and internal conflicts. Among other things, banking has been highly affected whereby most banks have stopped operating and their establishments destroyed thereby affecting money management and financial services negatively.

Additionally, there is a decline in economic performance of Sudan coupled with reduced ability by the banks to offer financing which has led to overall economic activity contraction as well as increased demand for foreign currency in black market hence causing significant increase in dollar exchange rate.

Given these challenges, the Sudanese economy faces immense challenges in achieving stability and growth, requiring urgent and effective measures to rebuild institutions, enhance the capacity to provide basic services, and boost confidence in the banking system.

The Economic and Social Development Survey in the Arab Region 2022-2023 information, ESCWA publication No: E/ESCWA/CL3.SEP/2023/4, classifies Sudan as one of the poorest growing Arab countries with overwhelmingly negative projections largely influenced by Sudan’s increasing conflict.

The Gross Domestic Product (GDP) is expected to decline on average by 3.8 per cent over the period 2023-25.

Coming back to the latest suggestions from IMF and World Bank, they stress that there is necessity for raising exports so as to cover the trade deficit. However, Sudan’s current export composition mainly consists of raw materials, making it difficult to achieve this goal.

• Exploitation of Natural Resources Amid War:

Despite the ongoing war, gold production has not ceased, but accurate data on export quantities is not available. The decline in the value of gold exports is indicative of the impact of export operations under prevailing conditions. Some sources also indicate problems faced by small producers in production areas, leading some to cease production due to security risks.

Overall, the heavy focus on exporting minerals, raw materials, fossil fuels, and many agricultural products poses challenges, as prices of basic commodities are subject to greater fluctuations than industrial goods. Moreover, heavy reliance on a few export commodities, makes sustainable development more difficult.

Many colonial policies persist to this day, whether indirectly or covertly, leading to the continued hardship for citizens. African elites use the colonial legacy as an excuse for corruption and government neglect, negatively impacting youth and society.

In Sudan and other countries, economic liberalization policies have led to deteriorating living conditions, increased unemployment, and diminished economic opportunities. Additionally, these policies have resulted in environmental degradation and a decrease in individual and societal productive capacities.

The new neoliberal economic liberalization policies have negatively affected workers, characterized by unfair redistribution and increased personal responsibilities, leading to increased poverty instead of the promised competition.

In general, these liberalization policies demonstrate a capitalist orientation focused on profit at the expense of workers, exacerbating economic disparities and exposing many to exclusion and poverty.

Social Situation in Sudan

In Sudan’s social landscape, the impact of wars reflects negatively on the daily lives of citizens. Families are exposed to death, destruction, and looting of property, with lives lost in conflict areas, in addition to internal and external forced migration.

Most manufacturing enterprises within this nation’s economy are small and medium scale businesses; nevertheless, majority of such industries get devastated or plundered leading to more problems being faced by the citizens thus increasing their agony.

Data from the International Organization for Migration indicates a rise in the number of forcibly displaced migrants to millions of people in September 2023. A survey showed the effects of war on services provided to these migrants:

– 42% of migrants face unclean or unsafe water, making them susceptible to diseases.

– Approximately 34% struggle to access water due to financial difficulties.

– 67% face difficulties in dealing with markets due to lack of financial liquidity.

– 55% suffer from inadequate or poor healthcare services.

– 23% lack access to healthcare services.

– 54% find it difficult to purchase fuel due to price hikes.

– 48% complain of electricity shortages or poor quality.

– Regarding education, school closures lead to a decline in education and increased dropout rates.

– Only 7% of migrants transition to schools, reflecting pressure on the education system.

– 80% indicate insufficient educational services.

To address these social challenges, effective measures must be taken in relatively stable areas compared to conflict zones, such as:

– Reviewing healthcare insurance programs and providing free treatment.

– Implementing programs to support vulnerable groups at risk of falling into poverty.

– Executing programs to combat unemployment and direct it towards employment and vocational training.

– Improving infrastructure to provide clean water and electricity in affected areas.

– Providing necessary support to educational institutions to mitigate the impact of school closures.

– Strengthening government guidance to provide basic and educational services to migrants.

To address these, solutions are needed, such as free healthcare, support for vulnerable groups, employment programs, and infrastructure improvements. Reconstruction efforts are crucial, focusing on economic diversification, citizen participation, poverty reduction, manufacturing development, and sustainable mining. Overall, coordinated efforts between the government, communities, and the private sector are essential for sustainable development and improving citizens’ lives.

These measures can contribute to improving the social and developmental situation of populations affected by wars and conflicts in Sudan, making relatively stable areas beneficial for their inhabitants and displaced persons instead of falling into the abyss of poverty and conflicts due to the continuation of the same failed economic policies.

Reconstruction programmes in Sudan are vital for economic stability and development.

They are built on key pillars:

1. Public policies focus on reconstruction in secure areas, fostering sustainable growth through economic diversification and export competitiveness.

2. Popular participation ensures citizen involvement in program design and implementation, enhancing community-driven projects.

3. Poverty reduction initiatives prioritize improving living standards for vulnerable groups, including food production, healthcare, and housing support.

4. Manufacturing programs aim to boost productivity, establish transformative industries, and reduce import dependence, utilizing existing export ports.

5. Mining efforts target sustainable extraction, technology adoption, and infrastructure improvement for local communities to benefit from mineral resources.

In summary, reconstruction programs in Sudan require integrated efforts and effective coordination between the government, local communities, with the aim of achieving sustainable development and improving the quality of life for citizens.

References:

• Survey economic social developments Arab region 2022-2023 ESCWA publication No: E/ESCWA/CL3.SEP/2023/4
• COMMON POLICIES OF MEMBER COUNTRIES, AND COMMON POLICIES IN SUPPORT OF MEMBER COUNTRIES REFORM PROGRAMS—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR – IMF Country Report No. 23/440 -December 2023

THIRD REVIEW UNDER THE STAFF-MONITORED PROGRAM, REQUEST FOR DISBURSEMENT UNDER THE RAPID CREDIT FACILITY, AND PROGRAM MONITORING WITH BOARD INVOLVEMENT-PRESS RELEASE; AND STAFF REPORT -IMF Country Report No. 23/108 -March 2023.

Elmunstasir Ahmed is a Sudanese poet, writer, and political analyst interested in the dynamics of change in Sudan

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