African business, politics and lifestyle
Britain on Sudan: Selling out or cashing in?
Britain’s new coalition government made its priorities on Sudan very clear as Henry Bellingham, the minister for Africa, used 90 percent of his opening remarks at his first press conference in Khartoum to outline how Britain could increase trade with Sudan.
The other 10 percent dealing with the run-up to the south’s referendum on secession, which is likely to create Africa’s newest nation state, and the International Criminal Court arrest warrant for President Omar Hassan al-Bashir for genocide all seemed like just an afterthought.
At first glance many would say Britain was selling out — engaging economically with a government whose head is a wanted man would destroy the global divestment campaign’s years of efforts to make investing in Sudan a poisoned chalice and to pressure Khartoum to stop rights abuses and allow democratic freedoms.
Many Darfuris and rights activists who have been victims of torture and harassment will be dismayed by the move, which clearly extends a hand of friendship to Khartoum, virtually a pariah since the ICC warrant for Bashir last year.
Is Britain selling out?
In fact many ordinary Sudanese say no. They say U.S. sanctions since 1997 have had little effect on the government, which took control in a bloodless coup in 1989 and was elected in disputed elections in April this year.
The economy has grown on average eight percent a year, Khartoum extracted the oil found on its territiry pretty much without Western companies, built hundreds of miles of tarmac roads, and erected high-rise government buildings which sparkle nicely in the sun, visible from the heavily secured U.S. embassy compound.
But sanctions have made life almost impossible for any normal Sudanese to do business abroad or at home. It’s those struggling to become an emerging middle class who welcome Bellingham’s suggestions to use the 35,000 Sudanese living in the UK to help small and medium sized businesses invest in Sudan, bringing much-desired jobs and training with them.
Britain is the former colonial power and many families have close links with the country. They would welcome British products instead of the often poorer quality Chinese goods flooding the market here in Khartoum. It would certainly lessen their excess baggage bills between London and Khartoum.
But Bellingham went one step further, saying British companies were lagging behind Chinese companies and missing out on great investment returns in Sudan as it emerges from decades of civil war. He also mentioned the unmentionable. Oil.
Most Western oil companies pulled out of Sudan, citing rights abuses during the north-south civil war which ended in 2005 with a shaky peace deal. Some firms were even implicated by activists in those rights abuses.
So is Britain cashing in?
Only if they can make it happen.
Western oil companies have been reluctant to enter to a post-war Sudan. Oil exploration is a long-term and costly venture and the stability of the country is far from guaranteed.
Many are waiting to see what will happen after the southern referendum on independence in five months time because the oil lies mainly in the south. They worry contracts signed with a united Sudan may not be honoured post secession by a new nation fighting to survive as a country in its own right.
British banks in the past five years all but stopped transactions with Sudan, no matter what the currency and no matter who the recipient.
Sudanese abroad had their bank accounts closed down regardless of who they were, foreigners working in Sudan received similar treatment and mortgage companies turned down anyone whose work brought them to the war-torn nation.
Lloyds TSB, which also owns Halifax and Bank of Scotland, last year paid a massive $350 million fine to the United States for fraudulent transactions to U.S.-sanctioned Sudan, Libya and Iran.
So how will Whitehall convince them it’s a good idea to facilitate investment in an opaque Sudanese economy dominated by companies hijacked by government organs or ruling party officials?
The jury is not only out on the moral implications of Britain’s new policy but also on whether London can convince UK businesses and banks to invest in a country which regularly ranks in the top five of failed states indices.