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South Sudan: A National Project Undermined by Globalizing Economic Trends.

The challenges of nation building in South Sudan are enormous. The nation building project is not progressing well. In fact there is a nation building crisis. Some of the underlying causes detrimental to South Sudan nation building are: leadership crisis, tribal rivalry, corruption, poor infrastructure, excessive and misguided foreign interventions just to mention but a few. Policy failure, particularly economic policies constitute the carnal challenge of South Sudan nation building.

While the primary responsibility of this failure lies with the government of South Sudan, the role of regional and international forces active in South Sudan’s political, social and economic space cannot be ignored in shaping the political economy of South Sudan. As Alex De Waal, of the World Peace Foundation recently stated South Sudan’s political economy and the resulting crisis is in part embedded in these regional and international economic policies and activities. “South Sudan’s political economy was a creation of international interests, including in oil, security cooperation, aid and the role that the United States likes to see itself playing in certain of the world’s trouble spots. Its functioning (South Sudan) cannot be separated from those global forces and how they incentivize and facilitate certain kinds of elite behavior”.

When one critically examines South Sudan’s economic and political development, one will agree that the political economy of South Sudan has been largely influenced by the dynamics of global forces. These global dynamics outpaced the conventional domestic dynamics of nation building that prevailed during the post independence era for most countries.  The Partnership model between the government and the Multi-Donor Trust Fund (MDTF), in my view has largely contributed to the failure of nation building in South Sudan. This is because the model undermined two important realities:

First, it is important to note that the priority of economic policies of any country in the international arena is primarily driven by domestic dynamics and interest of that particular country.

And second, the active participation of multiple groups in framing their economic policies/ strategies which are driven by their national demands as such, often lead to contradicting policy objectives.

South Sudan and its partners ignored the risk this setup could pose to the nation-building agenda. For instance, the International Community’s economic and social engagement started during the interim period that preceded the independence. A body called Multi-donor Trust Fund for South Sudan (MDTF-SS) was formed to manage financial aid from the donor community. Launched in 2005, the MDTF-SS spend some US$ 718 million, contributed by 14 international players.  The MDTF-SS through the World Bank was able to build schools, hospitals and train teachers in all the ten states of South Sudan. The full range of projects funded by MDTF-SS can be found on their website.

In their final evaluation report, the general self –appraisal of the donors at the closure of the MDTF-SS in 2013 was positive.  But the donors did put a footnote on the need to develop the low human capital. This constitutes the crux of the failure. By failing to develop the human capital, the MDTF-SS missed the whole point of economic development. There is no development without people.

It all went wrong when the government accepted the philosophy of free market economy in an economy that has nothing. This policy opened the country to International NGOs (INGOs) and businesses from the region to be the expending agents. The South Sudanese were left out.   Records show that from 2005 to 2011 the number of INGOs in South Sudan grew exponentially from 47 to 155 organizations, putting the South Sudan the second largest host of INGOs in the world! These INGOs engagement stretched from Humanitarian relief to building capacity and advising policy makers.

The other obvious impact of failed economic policies is in the private sector. The free-market approach gave no protection to the indigenous. As a result regional players dominated the private sector. Experience becomes a major barrier for local businesses to effectively engage in the private sector.

Ultimately Kenyan, Ugandan, Ethiopian and Sudanese businesses consolidated their position in the country’s economy. For example, today 90% of the financial industry is dominated by Kenyan firms.   All of the IMF support for South Sudan private sector has been administered through Kenyan banks. And they keep on growing, even at times of war!

But is it fair to solely blame the international and regional forces? Perhaps.  But the national government should squarely shoulder the blame. The government failed to protect the interests of South Sudanese. It should have argued that South Sudan nation building requires a trade-off between the need for national consolidation and the need for merits of globalization. It should have noticed that NO country had ever started with non-intervention strategy.  How this strategy should look like will be discussed in the next article.

In a word, South Sudan is failing in part because of bad economic policies. The free-market economy approach failed to build a national economy, and instead created a fragile economy dominated by international and regional players.

Warille B. Warille is a South Sudanese currently living in London. He holds an MBA in International Business Management and is the founder of IMATONGAS, a South Sudanese Oil retailing company. He can be reached at warillewarille@yahoo.co.uk.