Betwenen sponsor of terrorism and US debtor: Why creditors are favorable to Sudan?

Author : Georgiy Kuhaleyshvili

Source : 112 Ukraine

Recently, the International Bank allocated a loan of $ 2 billion to Sudan for the implementation of infrastructure projects and assistance to internally displaced persons for a year. Following the summit in Paris on economic support for African countries in overcoming the consequences of the coronavirus, France decided to write off $ 5 billion in debt to Sudan and allocate $ 1.5 billion in a new loan, while Germany offered $ 500 million to pay off debt to the IMF and bilateral debt obligations. In May, Saudi Arabia provided Sudan with a $ 20 million grant to pay off its debt to the IMF. At the same time, Khartoum already owes Riyadh $ 4.6 billion
09:20, 31 May 2021

Open source

International lenders flocked to Sudan after in March 2021 the IMF expressed its readiness to soften the requirements for the African country to pay off $ 50 billion in debt, and the US Treasury Department allocated $ 1.15 billion to the government to cover the debt in the short term. ... While the Ukrainian government cannot get a new tranche from the IMF and increases utility rates for the population, creditors flood unstable Sudan with money, which until December 2020 was on the list of countries sponsoring terrorism by the US State Department. It's all in the best interests of the global players who are crossing over in an oil-rich African country on the Red Sea coast.

US-China battlefield

The policies of the IMF and the World Bank largely overlap with American interests, since the United States is the largest donor of these financial institutions and has a key influence on decisions. The favor of international creditors and the administration of US President Joe Biden towards Sudan is associated with US-Chinese competition in the world.

Related: Russian naval base in Sudan: Extending Moscow’s influence in Middle East and North Africa

The rapprochement between Sudan and China was facilitated by the long-term US sanctions policy. The regime of President Omar al-Bashir has turned the country into a haven for international terrorists. In Sudan, there was a base of the terrorist organization "Al-Qaeda" (later moved to Afghanistan), involved in the explosions in the garage of the World Trade Center in New York in 1993, near the buildings of the US embassies in Kenya and Tanzania in 1998, the terrorist attacks on September 11, 2001 ... In 1993, the Americans added Sudan to the list of countries sponsoring terrorism. Khartoum has been in international isolation for 30 years under the yoke of sanctions. Fuel was added to the fire by the fact that the al-Bashir regime carried out ethnic cleansing of the Negroid population during the armed conflicts in the Darfur region and in the south of the country. South Sudan gained independence in 2011.

China is a key trade and economic partner of Sudan and has invested over $ 10 billion in the oil industry, agriculture, and the mining industry of this country. In the bowels of Sudan there are deposits of gold, silver, chromium, copper, zinc, lead, gypsum, phosphates, uranium. The Chinese oil company CNCP operates in Sudan. China exported to Sudan technologies and equipment for oil production, cotton production, and weapons. The Sudanese authorities have used the services of Chinese security companies, which employ former members of the People's Liberation Army of China.

In 2020, Sudan joined the Belt and Road Investment and Logistics Initiative, which brings together over 130 countries and 50 Chinese state-owned companies that have invested at least $ 900 billion in more than 1.7 thousand infrastructure projects around the world. The United States views the global project as a tool for China's economic expansion in the world and strengthening the debt dependence of the governments of individual countries. Chinese firms are interested in the development of the infrastructure of the Sudanese seaports, navigation on the Nile River, the construction of an industrial zone, a new oil pipeline from the fields of South Sudan (where CNCP also operates) to the Red Sea coast.

Related: Who's in line for normalcy with Israel: Sudan comes next?

The Celestial Empire has projects in the field of hydropower, solar and nuclear energy in Sudan. The construction of the first nuclear power plant with the support of China is being considered. Sudan can become a partner of China in the implementation of projects on a continental scale. The construction of a railway connecting the countries of South and North Africa, a railway from the coast of the Indian Ocean to the Atlantic is under consideration. The problem of African countries is the different gauge of the railway, which creates certain barriers to a full-fledged transport connection on the continent.

After the military coup in Sudan and the removal of al-Bashir from power in 2019, the administration of US President Donald Trump removed the state from the list of countries sponsoring terrorism in exchange for paying $ 335 million to Americans who suffered during the attacks. In fact, the US has lifted restrictions on Sudan in order to have more room to maneuver in competing with China for influence in that country. China is also seeking to mend relations with Sovereign Council Chairman Abdel Fattah al-Burhan and Prime Minister Abdullah Hamduk, who will remain in power until the 2022 general election.

Observing the competition between the United States and China, the Sudanese authorities are promoting them to various preferences. During a recent trip to Paris, Hamduk received a note verbale from the Chinese government that Beijing supports the transitional government. In response, the Sudanese prime minister asked the Chinese authorities to write off the debts of his country.

Israel recognition fee

The new loans are the payment of Americans for the recognition of Israel by the new authorities of Sudan in October 2020, following the example of Egypt, Jordan, the United Arab Emirates, and Bahrain. The sixth Arab country to establish diplomatic relations with Israel in December 2020 is Morocco. Israeli-Sudanese relations are not easy. The Sudanese took part in the 1948 Arab-Israeli War, the 1967 Six-Day War, on the side of a coalition of Arab states led by Egypt.

The US hoped that following Khartoum, relations with a key US ally in the Middle East would normalize other Arab states. However, this was prevented by the riots in Jerusalem and the next escalation of the conflict in the Gaza Strip.

Related: Sudan and Israel agree to normalize relations

Interests of Europe

Paris and Berlin are in solidarity with Washington on the Belt and Road Initiative, which explains their "generosity" towards Sudan. French President Emmanuel Macron believes that the roads being built by the Chinese should not become the main one for their hegemony and turn individual countries into vassals. German Foreign Minister Heiko Maas believes that the participation of EU member states in the initiative will contribute to strengthening dependence on China. The French and Germans provided loans to the Sudanese amid the recent cold snap in relations between the EU and China due to the violation of human rights by the Chinese authorities in the Xinjiang Uygur Autonomous Region.

France sees China as a competitor in Sudan's oil and gas sector. In December 2020, the Sudanese authorities announced their readiness to provide local and foreign companies with an area of ​​25 thousand square meters. km for investments in oil production. The government aims to increase oil production from 60 to 80 thousand barrels per day this year. The estimated undiscovered oil reserves in Sudan are 6 billion barrels. Also, the French are conducting a study to determine the amount of natural gas in this country. In addition to the French company Total and the Chinese company CNCP, oil companies from Canada, Qatar, India, and Malaysia operate in Sudan.

Related: Ukraine's Security Service to reveal information on "Wagner" activity in Sudan

Russia's interests

Russian President Vladimir Putin is pursuing a policy in Africa that is inherited from the USSR and is trying to gain a foothold in countries that are interesting in terms of investment or have a strategic geographic location. The Sudanese authorities have expressed interest in Russian participation in the construction of an oil refinery in the city of Port Sudan, and Meroe Gold, which is associated with the Russian company M Invest, is exploring gold deposits. According to unofficial information, the Russian PMC Wagner helped al-Bashir suppress the protests of his opponents. Russia is one of the largest arms suppliers to Sudan.

With access to the Red Sea, through which international commercial shipping routes pass, Sudan borders the CAR, where the mining company Lobaye Invest operates, which is associated with Russian businessman Yevhen Prigozhin. There are deposits of diamonds, gold and oil in the CAR. In 2019, Moscow signed an agreement on military cooperation with the al-Bashir regime, and in December 2020, an agreement on the creation of a logistics center for the Russian Navy in the city of Port Sudan on the shores of the Red Sea.

Related: Militaries and opposition sign transition agreement in Sudan

In April 2021, information was leaked that the Sudanese government had frozen the implementation of the agreement on the creation of a Russian military facility pending ratification by parliament - at best, until 2022, when elections are held in the country. The Russian Embassy in Sudan said that such information had not been received from the Sudanese authorities. The Turkish edition of Anadolu referred to the Sudanese official on condition of anonymity. Perhaps one of the unwritten conditions for Sudan to receive new loans was not to let the Russian military on the coast of the Red Sea. In the neighboring country of Djibouti, there are military installations of the United States, France, Italy, Japan and China.

The situation in Sudan is worse than in Ukraine

Biden is developing relations with Sudan with a focus on promoting democracy. US Treasury Secretary Janet Yellen said the Sudanese government needs loans to carry out reforms and restore dialogue with citizens. American Democrats need a clear example of how a former sponsor of terrorism can evolve into a relatively stable state. Nothing worked out in Afghanistan and Iraq, and there is no such serious internal political instability in Sudan. The country's authorities were hooked by the Americans, realizing that without financial injections into the economy, the earth would burn under their feet.

Related: Venezuela, Zimbabwe, Sudan, Argentina: World countries with highest inflation rate

However, the above political reasons do not mean that the provision of new loans to Sudan and the cancellation of part of the existing debt was economically justified. The socio-economic crisis in Ukraine may seem like flowers compared to the state of Sudan. According to the African Development Bank, in 2020 Sudan's GDP contracted by 8.4%, inflation rose to 124.9%, and the budget deficit was 12.4% of GDP. For comparison, in Ukraine, similar indicators were as follows: GDP fell by 4%, inflation rose to 5%, and the budget deficit was projected at 7.5% of GDP. If in terms of susceptibility to corruption, according to the Transparency International rating, Ukraine took 117th place among 180 countries, then Sudan - 174th.

The security situation in Sudan is no better than in Ukraine. The conflict in Darfur displaced 1.6 million people. There are ISIS cells in the country. Hence the conclusion: international lenders are willing to provide loans to unstable countries, turning a blind eye to the problem of corruption, if there are their long-term political and economic interests. Ukraine did not become such an "exception".

Related: Ukraine’s Security Service publishes list of Wagner’s Group mercenaries fighting in Sudan

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