South Sudanese President Salva Kiir received a warm reception at the European Commission in March, where he told President José Manuel Barroso about his intention to sign the Cotonou cooperation agreement in the near future. This will enable the new state to benefit from EU funding in that framework. Meanwhile, South Sudan should get EUR 700 million of development aid in addition to EUR 45 million of humanitarian assistance. Moreover, if South Sudan is recognised as a less developed country, it should also benefit from the most favourable trade regime offered by the European Union with its partners of the African, Caribbean and Pacific states, the “everything but arms” (EBA) regime which would give a quota-free and duty-free access to South Sudan exports to the EU. Such preferential treatment would help the country to diversify its economy which is too dependent from oil, Barroso said.
The EU Commission chairman expressed his concern in front of the possible damaging economic and political consequences of the Juba government’s decision to stop its production last January and exports in retaliation to the “theft” of oil by Khartoum. The government of Sudan has been indeed accused by the Minister of Oil of South Sudan Stephen Dhieu Dau to steal 1.2 million barrels of Southern crude oil in order to feed its El Obeid and Khartoum refineries and at the same time to impede cargoes from South Sudan to reach the international markets. Indeed, last December and January, Khartoum prevented two tankers to leave Port Sudan with a 1.6 million barrels cargo and also prohibited two other tankers to load 1.2 million barrels. In addition, there is also a disagreement on the transit fees to be paid to Khartoum by the South Sudan government.
According to the head of the UN Mission in South Sudan (UNMISS), Hilde Johnson, “there are many decisions that can be taken that are suboptimal in this situation, such taking up loans against future oil resources at high interest rates, depleting foreign exchange reserves, printing money that leads to hyperinflation”. EU officials urged Salva Kiir to find an agreement on those issues with the Khartoum government. Indeed, this interruption which was dubbed as an “economic suicide” by Alex de Waal, has happened in a dramatic context. Oil represents 98% of the tax revenues in a country where one third of the population are food insecure. UN sources estimated one million people risk to die from famine in the country.
According to a diplomat from the European External Action Service, President Kiir was told in Brussels by EU leaders that the purpose of European aid was not a substitute the missing oil revenues. José Manuel Barroso rather insisted on the need for both Sudan and South Sudan to deal with each other since they are destined to live side by side. “They must do so in peace and harmony for the benefit of their peoples. Both sides must show determination to find a negotiated solution to all remaining outstanding issues” Barroso said, he also expressed the EU’s “growing apprehension with the escalation of violence and cross-border military activity”. According to the Commission President, the EU “is ready to work with South Sudan and international partners, in particular the UN Mission in South Sudan and the African Union, to assist in the consolidation of democracy, respect for the rule of law, good governance, and the fight against corruption”.
On the following day, President Kiir was expected to address the European Parliament’s Foreign Committee, which had prepared a number of questions over community conflicts and guerrilla attacks. European MPs were also curious to find out how the President would finance reforms after the shut down of the oil production and whether or not attempts to gather funding for the construction of an oil pipeline to Kenya were making progress. But unfortunately, President Kiir was not able to attend the meeting. One of the issues which the MPs were eager to raise was the demobilization program which may concern 150,000 ex-fighters.
The situation in Sudan is also high on the EU parliament’s agenda. Commenting on the escalation of violence in the border areas of Sudan and South Sudan the President of the European Parliament Martin Schulz stated: “I am very concerned about the ongoing fighting in the Heglig region in Sudan and about the extreme violence which for months has severely affected the population of the Blue Nile and South Kordofan. All sides should rein in their forces and restrain from violence allowing for humanitarian aid to provide assistance in the affected areas. I also urge South Sudan to immediately retreat from Sudan’s Heglig region and call on the Sudan Armed Forces to end the aerial bombardment of South Sudan”
But EU’s mediation attempts may be hampered by efforts at the European Parliament to ban authoritarian leaders including Sudan’s President Omar Al Bashir from owning assets in the European Union. Last February, the EU Parliament voted a resolution tabled by British liberal democrat MP Graham Watson which makes such proposals and mentions accusations by the former prosecutor general of the International Criminal Court Luis Moreno Ocampo against Omar Al Bashir. According to Moreno Ocampo, the President of Sudan is suspected to have embezzled 9 billion dollars of oil revenues and to have transferred the money in UK bank accounts. This resolution also urges the British government to reveal whether or not these funds are in the UK (in December 2010, Wikileaks published a US cable which mentioned that some of these funds were on a Lloyds bank account). Besides, Omar Al Bashir’s family is also targeted by Graham Watson’s resolution. It calls indeed for banning persons who are associated with the targeted leaders from own assets in the EU and also from attending courses in European schools or universities.
P.S. This article was prepared while the situation in Sudan remains volatile. For an update on the situation, see here.