South Sudan: Country’s Experiment in Gandhi Diplomacy
South Sudan’s oil fields have been eerily quiet for nearly a month, ever since the government ordered a complete halt to oil production in Africa’s newest country, also one of Africa’s poorest. It is effectively a hunger strike on an international scale. But will it work? That depends on just how long South Sudan can stay hungry.
The country of South Sudan was born just last year with few advantages.
A poorly-educated population, traumatised after decades of fierce fighting. Almost nothing in the way of roads, hospitals, school and universities. And a belligerent, unfriendly neighbour up north is Sudan proper, hurting from the loss of vast swathes of lucrative land that it once owned. There was, however, one thing going in South Sudan’s favour.
The country had oil, lots of it. Just about enough to provide the billions of dollars needed to kickstart a non-existent economy and build a new nation from scratch.
Only one problem. South Sudan’s a landlocked country. This wasn’t an issue prior to secession because Sudan as a whole has a lovely Indian Ocean coastline, and a well-equipped port. Pipelines took the oil from the south into the holds of the tankers waiting in Port Sudan. But now that the one country has become two, it’s not so easy. Those pipelines remain the only way to get oil out of South Sudan in any significant quantity, but they go through land controlled by Khartoum - and Khartoum isn’t making it easy for the new government in Juba to use them.
The sticking point is the transit fee that Khartoum is demanding. For every barrel of oil that goes through its pipes, it wants to be paid $36 - roughly a quarter of what a barrel of oil is going for at current prices. Juba, at the other extreme, is offering $1 per barrel. Neither country is that keen on (or particularly good at) negotiation.
Matters came to a head in January, when Juba accused Khartoum of stealing nearly a billion dollars worth of its oil - taking it directly from the pipelines, through which oil had continued to flow while negotiators sporadically negotiated. Khartoum said this wasn’t theft, it was just appropriating what Juba owed in unpaid transit fees.
Juba’s response was drastic, and unexpected. They turned off the taps.
Completely. Ordered a total shutdown of all oil production in the Republic of South Sudan, giving companies two weeks to comply. And not a barrel has been extracted since then.