Sudan’s Debt Archive

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Senator Mark Udall Sponsors Letter to Obama on Sudan

Thursday, June 23rd, 2011

Senator Mark Udall (D-CO)

On Tuesday, Senator Mark Udall (D-CO) was joined by 12 Senators in a letter sent to President Obama. The letter urges the President to take steps to mitigate the crisis occurring in the border regions of North and South Sudan. In the South Kordofan region alone, attacks by the Sudanese army have resulted in the displacement tens of thousands. Civilian casualties have been reported along with widespread looting and destruction.

The letter to the President highlights the crisis unfolding in Abyei, South Kordofan and Blue Nile regions. The letter further expresses concern for the implications that the fighting will have on the peace process:

“Fighting in the border areas of Abyei and Southern Kordofan threatens to derail implementation of the Comprehensive Peace Agreement (CPA) and bring both sides to the brink of renewed civil war.”

While the letter commends the President’s work with the Security Council to put pressure on the Sudanese government, it also pressures Obama to take more decisive action.  The letter asks the President to suspend consideration of debt relief to Sudan until the CPA is fully implemented, and to “urge Arab States and China…to use their leverage to persuade president Bashir to withdraw his troops.” The complete text of the letter can be found here.

Senator Udall’s letter was signed by Senators Richard Blumenthal (D-CT), John Boozman (R-AR), Scott Brown (R-MA), Sherrod Brown (D-OH), Tom Harkin (D-IA), Frank Lautenberg (D-NJ), Robert Menendez (D-NJ), Jeff Merkley (D-OR), Jerry Moran (R-KS), Sheldon Whitehouse (D-RI), Roger Wicker (R-MS), and Ron Wyden (D-OR).

 

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Don’t prematurely reward Sudan with debt relief

Friday, April 15th, 2011

A delegation from the Government of Sudan arrived in Washington, DC yesterday to lobby for debt relief, while attend the World Bank and International Monetary Fund (IMF) annual meeting this weekend. Sudan has accrued over $37 billion in external debt, nearly all of which is in arrears, and is desperately seeking a relief package.

Any policy concerning debt relief is the largest leverage the international community has to pressure the Sudanese government to take essential steps, such no longer targeting civilians in Darfur or elsewhere in Sudan, as well as fully implementing the CPA and resolving remaining post-referendum issues. The conversation around debt relief offers the U.S. and international community an opportunity to influence Khartoum.  It is imperative that Sudan not be prematurely rewarded due to their lack of progress towards peace in Darfur and critical post referendum issues.

Since President al-Bashir came to power in a coup in 1989, his regime has accrued over $23 billion in debt much of was used to finance the Government of Sudan’s wars against Darfur and the South. The government also used the loans to support development in Khartoum while neglecting the peripheral regions such as Darfur, Eastern Sudan, and the South.

The distribution of the debt is one of the many post-referendum issues that North and South Sudan must resolve before July 9th, when the South officially becomes independent. The North continues to insist that the South takes a portion of the debt since some of it was accrued by developing oil infrastructure that the primarily the South will benefit from, however, the Government of South Sudan has refused to accept any portion of the debt.

Due to outstanding debt owed to the IMF, Sudan is currently prevented from receiving a debt relief package under the Highly Indebted Poor Countries (HIPC) Initiative, which was launched by the IMF and World Bank to “ensure no poor country faces a debt it cannot manage.” Sudan currently accounts for an estimated 75% of the arrears owed to the International Monetary Fund. However, in its recently released report, the IMF recommended that Sudan “initiate a dialogue with creditors with the aim of establishing wide support for arrears clearance and debt relief.”

While Sudan owes relatively little debt to the U.S., support by the United States is critical in obtaining relief from key multi-lateral institutions. Already, the U.S. has supported the creation of a group to work on ways to ease Sudan’s national debt and in a recent interview the newly appointed U.S. Special Envoy for Darfur Princeton Lyman, the U.S. has asked the World Bank to start the technical work toward debt relief.  Even though the debt relief process is lengthy, the international community should link this reward to specific steps taken by the Khartoum government.

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Two days of voting in South Sudan

Monday, January 10th, 2011

After two days of voting on the referendum for independence, South Sudan is edging closer to seceding from the Northern government based in Khartoum. With no reports of violence related to the vote, The Guardian is claiming a turnout approaching 50% of the population while the vote seems to be swaying overwhelmingly toward independence as the BBC’s Will Ross has reported he is unable to find any voters who opted to remain a part of Sudan. Furthermore, former US President Carter said in an interview with CNN that in a private conversation with Sudanese President Omar al-Bashir that Bashir expressed the belief that an independent South Sudan should be free of Sudan’s debt obligations, in effect pledging to take on all of Sudan’s $38 billion international debt.

Among 60,000 Sudanese refugees and expatriates living in the United States, there are 8 designated polling places to cast votes. In Omaha, refugees are braving snow and cold to cast their votes–some have come from as far away as Fargo, North Dakota to vote.

The news has been less positive in the border region of Abyei, however. A referendum planned to run in parallel to the South Sudanese referendum has been delayed and tensions between rival Misseriya and Dinka tribes have exploded into violence that have claimed between 23 and 33 lives in the past three days. UN Peacekeepers are being sent to the region to investigate the incidents of violence.

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Time to Take Away Sudan’s Credit Card

Sunday, January 3rd, 2010

Cross posted from ForeignPolicy.com.

Omar al-Bashir’s brutal Sudanese regime certainly has nerve. On Dec. 14, as Bashir’s National Congress Party (NCP) thugs violently suppressed the second peaceful demonstration by opposition groups in seven days, the Sudanese minister of finance met with the U.S. Special Envoy to Sudan Scott Gration and urged the United States to lift sanctions on Khartoum and cancel Sudan’s foreign debt — in other words, bailing out the government that brought you such atrocities as Darfur and the decades-long civil war with South Sudan that now ominously threatens to reignite.

While no Western country is rushing to hand out money to Bashir, the international community has disagreed over how to persuade Sudan to end its genocidal ways, and the United States is still the only country to impose sanctions. One unlooked-for upside of the global financial crisis may be that it offers new economic leverage with Khartoum. Following the crash, Sudan now holds roughly $36 billion in external sovereign debt that it is struggling to repay. This debt gives the rest of the world a new opportunity to finally affect the course of Sudanese political reform and even end the conflicts in Darfur and South Sudan, if Western countries are willing to act boldly.

For much of the last decade, Bashir and the NCP, who were sitting on Sudan’s rich oil reserves, could afford to ignore their mounting debt. A flood of foreign direct investment and new loans contracted with China, the Gulf Arab states, and India financed a booming resource economy and made Sudan careless about payments to the International Monetary Fund (IMF), Paris Club members, and other debtors. The existence of such a steady stream of income has also enabled Sudan’s hubris toward the international community on issues like Darfur.

But the global recession has rocked Sudan’s fragile economy, and the good times are over. The large drop in oil prices over the last year has sharply lowered government revenues. The Sudanese government compounded the problem by defending the exchange rate of the Sudanese pound in order to prevent a rise in domestic food and import prices. This unsound policy quickly became unsustainable as the Sudanese government began to run out of foreign reserves and found foreign capital more difficult to acquire, because all of its creditors were also affected by the crisis.

(more…)

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Sudan’s Debt: A Leverage Point for Peace

Friday, December 11th, 2009
Bashir took power militarily in 1989

Bashir took power militarily in 1989, since then his regime has accumulated 23 billion dollars in debt

In October, I reported from Istanbul that the Sudanese government had sent a delegation to the annual International Monetary Fund/World Bank meetings to seek a debt-relief package from the international community. With an economy hemorrhaging from the global financial crisis, the delegation sought relief from an estimated 36 billion dollars in foreign debt.

The Save Darfur Coalition has called for the international community to condition any debt-relief package on concrete and lasting progress toward peace in Sudan.  To provide more information on this new mechanism for the international community to place pressure on Omar al-Bashir’s regime and to offer earned incentives for peace,  we have just published a new paper entitled, “A Leverage Point for Peace: how the United States should deal with Sudan’s troubling debt.”

Here is the executive summary:

The current global economic crisis has significantly affected Sudan’s fragile economy. The country’s large existing public debt burden—which ballooned under the National Islamic Front/National Congress Party reign from 1989 until today—frustrates its attempt to access needed foreign capital during the financial downturn. Like other struggling countries, Sudan has sought a debt-relief package from its creditors to overcome its current challenges.

This debt, however, has been incurred by an unrepentant, unreformed regime, and has effectively subsidized war and genocide waged by the Sudanese government against its own people. The Sudanese people have been burdened with more than $23 billion in “odious debt” from the Omar Al-Bashir regime’s campaign of negligence and destruction over the last 20 years. During the past six years, moreover, robust economic gains have underpinned the government’s hubris and intransigence in confronting the international community on Darfur. Now in dire straits, the Sudanese government has redoubled its push to secure a debt-relief package and economic foreign assistance agreement as part of its bilateral talks with the United States, with American allies, and with multilateral creditor institutions in which the United States plays a key role.

With Sudan at a dangerous crossroads, President Obama must present those in power in Khartoum with a choice between earned incentives or serious consequences. His administration should lead an international coalition of Sudan’s creditors to condition any consideration of debt-relief or debt-servicing adjustments on concrete and lasting progress toward peace in Darfur, the full implementation of the Comprehensive Peace Agreement (CPA), and significant structural political and judicial reforms that fundamentally change the repressive systems in Sudan. For a more prosperous future in Sudan, the international community must rid the Sudanese people of this burdensome and “odious” debt created by the regime in Khartoum – but Sudan’s leaders should know they first must finally commit to extinguishing the flames and embers of decades of war in Sudan.

This aggressive lobbying by the Sudanese government continues and the economic conditions that precipitated the urgent requests have not disappeared. Instead, Sudan’s Central Bank Governor Mohamed al-Hassan Sabr last week confirmed that Sudan’s banks still have not recovered from the global crisis. Foreign reserves remain low due to a decline in oil revenues, as well a significant drop in foreign investment and financing (link in Arabic). As inflation has increased and the Sudanese pound has become less valuable compared to other currencies, the average Sudanese person has seen the cost of food, consumer goods, and imports become much more expensive over the last year.  With elections looming, Bashir certainly wants to reassure those committed to his National Congress Party (NCP) – and more broadly the Sudanese people – that his economic policies are working. This fact is yet another reason why debt-relief has become such an important issue for the Sudanese government. (more…)

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Falling Down: Sudan Takes Its Place at the Bottom

Thursday, November 19th, 2009

Each year, Transparency International—a Berlin-based NGO that monitors global graft—releases a Corruption Perceptions Index (CPI), which reports corruption levels throughout the world by assigning the rank and score of surveyed countries.  Each year, Sudan appears, predictably, in the last few spaces of a long list; among the lowest of the low.

Despite its poor performance, Sudan does cling to one key distinction. Unlike even the most desperate states—including many of its struggling and war-torn neighbors—Sudan’s score has consistently dropped over the past five years. Since signing the Comprehensive Peace Agreement (CPA), rather than progress, Sudan has fallen even further behind in terms of what TI’s index measures.

But what exactly is that? Transparency International collects surveys from independent experts, formulates a number on a 10-point scale, and assigns each country a rank based on that (information on their research and methodology can be found here).

More important than the lists and figures is what they indicate. In the case of Sudan, a dismally low and ever-decreasing score reveals that its leaders have failed to translate the country’s natural wealth and considerable international investment into equitable and steady economic progress for all of its people. It has failed to use the opportunities presented by peace negotiations, international aid, and prospective elections to realize essential political reforms and improve the country’s governance.

It’s no surprise, then, that this year Sudan takes its place at #176 of 180 countries, with a score of 1.5 out of 10. Surrounded by headline-makers like Somalia, Myanmar, Afghanistan and Iraq, there, at the end, Sudan enjoys the company of its political and economic peers: the world’s failed and failing states. This seems appropriate; Sudan’s own list of well-documented failures is long: failure to protect its own people, failure to negotiate in good faith, failure to promote peace and justice….it goes on. Lack of transparency and accountability comprise a destructive and pervasive theme – a strategy, even – that defines the dealings of a government with a wanted war criminal at its helm.

As much as Sudan risks becoming a failed state at the hands of its own destructive regime, the vast country has also been failed – by members of the international community, many of which dominate the index’s upper rankings or, like China, have worked hard to improve their own. Implicated in Sudan’s failure are many—from the passive acquiescence of African leaders to his crimes, to the outright denial of these violations in the Arab World; from the empty promises of wealthy Western countries, to the ethical void in Chinese influence. Non-state actors also share the blame: rebel groups, opportunistic bandits, and corporate interests alike work to destabilize and pillage an entire nation for the benefit of the few.

(more…)

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Why all the ‘howling’ about Sudan’s debt?

Friday, October 16th, 2009

Cross posted from SSRC’s Making Sense of Darfur blog

Mr. Badawi in his recent post “Indebted to the Save Darfur Coalition?” plays loose with the numbers and the definition of Sudan’s “odious” debt. In addition, he mischaracterizes the objectives of the Save Darfur Coalition’s position related to how the international community should deal with Sudan’s debt crisis and ignores the coalition’s support thus far of the Obama Administration’s engagement strategy with Khartoum.  We have repeatedly called for the U.S. to offer Sudan’s leaders with a choice between earned incentives for durable peace and escalating costs to those who obstruct efforts to resolve Sudan’s interlocking crises.  It is necessary, as Mr. Badawi argues, for the international community to rid the Sudanese people of this burdensome and “odious” debt accumulated by multiple regimes in Khartoum – but the burden of proof first lies with Sudan’s leaders to demonstrate that they have finally committed to extinguishing the flames of decades of conflict in Sudan.

To begin with the facts, Mr. Badawi is just plain wrong when he states that the “explosion [in debt] has been almost solely [due] to a build-up of repayment arrears to bilateral and multilateral creditors.” From 1989 until today, the Sudanese government has received an estimated $4 billion in new public medium and long-term loans and an estimated $5 billion in new private medium and long-term loans (information via Economist Intelligence Unit, a past employer of Mr. Badawi).  Much of this new debt is even more recent.  Sudan accumulated over $2 billion in new loans from international lenders (almost half of it from non-Paris Club bilateral loans) between 2001 and 2006 when it was still waging war in south Sudan and orchestrating its campaign of death and destruction in Darfur. In 2007 and 2008 alone, Sudan contracted another $1.444 billion in more loans mostly from Arab multilateral and non-Paris club creditors, as well as from China and India.

This data reveals that many in the international community continued to give to the Sudanese regime while it was waging war and genocide against its own people.  Sudan’s arrears certainly did balloon during this period by $12 billion to bring its total arrears to $18 billion (half of its estimated debt load of $36 billion), but NIF/NCP leaders also contracted new irresponsible loans to finance their destructive policies.  From their own reporting, Sudan imported weapons worth $76.3 million between 2004 and 2006, not including fighter jets and combat aircraft.  The cost of Sudan’s purchase of 20 MiG-29s and 26 attack helicopters from 2004 to 2008 is unknown but most experts conservatively estimate the price-tag at hundreds of millions of dollars.  Recent reports, furthermore, allege that this advanced military buildup continues.

(more…)

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If you can read this

Friday, October 9th, 2009
One of our mobile billboards in downtown Pittsburgh

One of our mobile billboards in downtown Pittsburgh

If you can read this you can save lives in Sudan.

That was the message that we brought to world leaders in New York at the U.N. General Assembly and in Pittsburgh at the G20 summit last month.  We also brought them your messages – your reminders in photos and petitions to those world leaders: Don’t Forget Darfur.

Take a moment to check out what we accomplished together:

During our street actions in New York we delivered your 45,383 petition signatures to Special Envoy to Sudan General Scott Gration. In the short program before the Darfur/Darfur exhibit began, General Gration told the crowd:

“And this letter that I’ve got from you all is very important. I’ll make sure that the President gets this, and that he understands the concern that America has to solve this problem in a very expeditious way; a concern that we’ll see in these pictures… What you’re doing is so important to bring the visibility and the pressures to bear, so that we can take the appropriate actions in Darfur to make a difference in the lives of people who deserve this and a lot more.”

—Special Envoy to Sudan General Scott Gration

In Pittsburgh, President Obama drove by our street teams—and waved at our activists holding signs along the route to the G20 opening dinner.  Also in Pittsburgh we held a live webcast policy briefing on “Sudan and the G20: what the world’s richest countries can do.”  In combination with our TV ads, print and billboard ads these actions reminded world leaders that they can all save lives in Sudan.

Check out what we accomplished together during our United Nations and G20 “Don’t Forget Darfur” campaign by taking a few minutes to see our TV and print ads, policy briefing, photos of our street actions, and our new “Don’t Forget Darfur” video on YouTube.

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Wrap-up from Istanbul

Wednesday, October 7th, 2009

Andrea and I have less than 8 hours left in Turkey.  While we wish we had more time in Istanbul, the European Capital of Culture for 2010, we definitely feel that that the trip to attend the International Monetary Fund/World Bank annual meetings was a success.

On the debt-relief front, the Syrian Minister of Finance did call in his speech for the international community “to help unburden Sudan of [its] debt problems.” However, we did not perceive any strong willingness from Sudan’s largest creditors to take immediate steps to give such a reward to Sudan’s leaders before durable peace in Sudan takes hold.  This does not mean though that the international community recognizes yet the value of debt-relief as a significant carrot/stick for peacemaking in Sudan.  We need further education and advocacy to convince countries of what a powerful tool they have in their hands.

Indeed, a number of delegations, international economists, and civil society leaders supported our view that debt-relief for Sudan should be tied directly to concrete and lasting progress toward peace in Darfur, the full implementation of the Comprehensive Peace Agreement, and significant structural reforms that fundamentally change the repressive systems in Sudan.  Some of the strongest support came from leaders of debt-relief organizations that have been fighting for debt-relief for impoverished countries for decades.  Many admitted that dealing with the ‘odious debt’ of brutal regimes still in power requires a coordinated approach from the international community.   A Serbian democracy activist, and former opponent to Slobodan Milosevic, also told me that the denial by the Clinton Administration of emergency loans to Milosevic helped put additional pressure on the genocidal regime.

On the way home, I will put together some further posts on other Sudan-related topics covered in sessions on the sidelines of the meetings – such as the importance of accountability in Sudan’s oil sector and building state-capacity in conflict-affected countries.

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Conditioning Debt-Relief for Sudan on Peace

Monday, October 5th, 2009

The Sudanese government’s delegation, led by Dr. Awad Ahmed Al-Jaz, the finance minister and a senior National Congress Party (NCP) leader, is here in Istanbul for the World Bank/International Monetary Fund (IMF) annual meetings.  News reports from last week indicated that securing an internationally-brokered debt-relief package would be at the top of the delegation’s agenda.   The dire straits of the Sudanese economy motivate this new diplomatic push.

In none of the meetings thus far that I have attended has Sudan’s appeal been publicly raised; however, we have been speaking with numerous IMF and Bank officials, policymakers, economists, and journalists about this issue.  In these conversations, we have stressed that Sudan’s creditors must condition any consideration of debt-relief or debt servicing adjustments on concrete and lasting progress towards peace in Darfur, the full implementation of the Comprehensive Peace Agreement, and political and judicial reforms that fundamentally change the repressive political system in Sudan.

In addition to blocking debt-relief now for a government in Khartoum that has shown a complete disregard for protecting its own citizens, we want the international community to realize what a powerful tool it has at its disposal for peacemaking in Sudan.  Leveraging debt-relief to demonstrable signs of changed behavior by the NCP-led government and concrete and lasting peace fits perfectly with the Obama Administration’s strategy of engagement with Khartoum.  Continuing to refuse to write-off debts should be regarded as a current bilateral American stick that – with changed behavior from the Sudanese government – could become a potential bilateral carrot.  These are the very type of “earned incentives” and “serious consequences” that Save Darfur has urged the Obama Administration to include in its still yet to be released Sudan Policy Review.

(more…)

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