The two Sudans play the biggest game of poker in the world

The facts are simple but brutal: in response to a dispute over pipeline fees, the world’s newest country South Sudan stopped producing oil in February because the only way to take it to market was through the pipeline to the north, through Sudan, the country they had just seceded from.

Then there’s the interpretation of the known facts, which can be as deep and technical as you want: which of the two government positions, Juba and Khartoum, is closest to any kind of international norm? How come the sums the North demands for transport, $36 per barrel, magically equal the amount of money it was getting before the South’s independence, when half the oil produced in the south still belonged to it? Did anyone in Juba take advice on how one closes down an operating field, and how long it would take to restart production if there was ever an agreement reached? How do the fees compare to other transnational pipelines, and what is the truth behind the stories of billions of dollars of oil physically lifted, inside Sudan for local consumption and then at Port Sudan by some unholy alliance of officials and black market traders who – make no mistake about this – have connections which ultimately lead to a petrol station near you.

But behind the facts and the speculation about the facts, a two week trip to both countries has left me with an unnerving and perhaps unanswerable question: what if the shutdown of oil production in Sudan, and the resulting economic crises in both countries is the biggest game of poker in modern history. What if its win or bust with 40 million livelihoods, a game consciously played by decision makers used to  staking other people’s lives?

There is chaos and mayhem on both sides of the border. The international media have covered the bangs and flashes part of it – the more dramatic part north of the border where no sooner did the South secede than the south of the new truncated country in turn took up arms to demand justice in a still vast country that has always been dominated by the centre.

But the north of the south is also in trouble due to the shutdown. In the town of Bentiu last week, rice cost $2 US per kilo, lentils $6 per kilo. There are no cars on the streets because petrol costs over $20 US per gallon. This hyperinflation is due to two facts: first, that the border is closed and these parts of South Sudan have traditionally been locked into markets in northern Sudan. While malnutrition spreads across the belt close to the border, at the other end of the food chain, farmers in Darfur suffer because prices for their crops have collapsed without the chance to access what is traditionally a major market. People are already eating only once a day, or some perhaps only every other day. And now the rainy season starts, meaning large areas could be cut off from outside supply for weeks or even months. And the second reason is because the shut down has meant both governments are bankrupt.

Neither government has any real money coming in to pay wages or provide any public services whatsoever. The question is, which government collapses first. It really is the largest game of poker in the modern world.

I met a man, a natural leader, who some people later told me drove the decision in South Sudan to shut production down. He is super bright, impeccably dressed and well informed, youthful and energetic. We talked about what South Sudan’s options were and he said, well, you have to understand, we’re a country now. For years we struggled as a liberation movement but could never rely on the United Nations, the machinery of international diplomacy. Now we can.

In retrospect, it seemed like he was telling me Juba just got a couple of jokers in its hand. For a movement – now a country – which came into being and succeeded through bravado, play after play which paid off at terrible humanitarian cost, it seems like just another hand. The government in South Sudan is from a revolutionary struggle turned founder of a state – think Fidel Castro in Cuba, the FLN in Algeria, even the ANC in South Africa. Whereas the government in the north is simply the latest of many, and deeply unpopular even among its own people. They may have bought the middle class with petrodollars these last few years and done their best to disembowel civil society for the quarter of a century they have been in power… but ultimately they have not brought any achievement to Sudan that most of its citizens recognise. And they lost the war they pursued with the South.

Has this man calculated all that? Is the growing malnutrition among two to three million people in his own country simply collateral damage in his play for regime change in Khartoum? I have no proof but I think so.

A complex and familiar picture. Where does transparency come into all this? If there was transparency, Khartoum couldn’t have tried to play Juba in the same way around the money, creating a groundswell of opinion to just shut the oil down. If there was transparency, come to that, the governor of Unity State in South Sudan couldn’t just smile and wave his hands expansively and say how many schools have been built in the last few years (no numbers and no evidence on the ground) when asked where the $400 million direct allocation had gone. If there was transparency and real public debate, both governments would realise how fragile the oil wealth is and how they need to plan now for when it goes. If there was transparency, the lives of 40 million people wouldn’t be tied up in a high stakes game of poker that maybe a dozen people in both capitals control.

Category: Africa, Blogs, OpenOil blogs, South Sudan, Sudan · Tags:

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