Sudan’s shifting frontier

Global perceptions of Sudan and Sudan-China relations have been dominated, especially in the West, by the conflict in Darfur and the International Crimianl Court arrest warrant for Sudan’s President Bashir. For many this optic has tended to colour and determine the assessment of China’s African involvement as a whole. And this in turn has had its impact on China’s conduct on Sudan itself.

The merit of this collection of essays is to take a step back from the predictable starting point, not least by integrating its view of China’s role into the broader context of Sudan’s other Asian partners, in particular Malaysia and India, whose combined share of Sudan’s oil output equal’s China – with 34 percent to Malaysia and 10 percent to India – but attracts much less international attention and odium.

The perspective is also broadened beyond oil to look at the impact of the oil sector and of Sudan’s Asian partners on the rest of Sudan’s economy, society and politics. In this broader perspective Sudan appears not that different from other oil states, except that the West has excluded itself.

Sudan’s oil supplies less than one percent of China’s total energy needs, though oil represents 90 percent of Sudan’s total exports, of which 82 percent goes to China. Of the rest Japan with nine percent is the largest buyer, with the UAE at four percent and the rest at five. This in itself should prompt reflections on the relation between oil foreign direct investment and the desire for direct ownership of oil supplies as ‘equity oil’. Japan as the second-largest buyer has nonetheless no significant ownership stake, while Malaysia and India, the other two significant investors, do not appear to be major buyers.

Sudan’s oil is of course of major importance to the Chinese company CNPC which, however, appears to sell much of its Sudanese oil on the global spot market. As the editors of the book point out, ‘the commercial rewards of oil investment stand out rather than Sudan acting merely as a direct source for China to satisfy its burgeoining oil import needs’.

But for both China and Malaysia, oil has been the bridgehead for expansion into the service sector. The editors point out that ‘the services provided by CNPC’s subsidiaries can at times be more profitable than the company’s actual oil production’. Sudan is also the largest overseas involvement of Malaysia’s Petronas. Sudan’s own initiative plays a key role, with India actively sought out as a partner by Khartoum to balance the influence of China and Malaysia. For all three Asian partners ‘relations have progressively gone beyond oil and into mining, infrastructure, agriculture and the service sector’.

Indeed, despite its key role in Sudan’s international economic position, oil still constitutes only seven percent of Sudan’s GDP and, as several contributors point out, agriculture could assume increasing importance as oil output declines, especially for the north which has lost most of its oilfields with the secession of the south.

The issues of land grabbing, dispossession and environmental degradation which all too often accompany agribusiness and land acquisition by foreign investors also accompany the exploitation of oil resources and here too Sudan has been no exception. The impact in South Sudan as described here by Leben Nelson Moro from the University of Juba appears depressingly similar to that in so many other oilfields, with some refugees returning from the north finding their homelands so devastated that they have turned around and returned to the north.

Other chapters give detailed analyses of the involvement of India and Malaysia. This reviewer was amused to note that India’s acquisition of its initial stake was only made possible by risk cover provided by HSBC Insurance in London. Britain’s oil companies could not sully their hands by continuing involvement in Sudan, but clearly the City of London had no inhibitions about taking its cut!

Roland Marchal in his chapter ‘From Islamist students to rentier bourgeois’ gives an interesting comparison of the role of Islamist ideology in Sudan and in Malaysia. In both countries a form of relatively pragmatic Islamism serves as a development ideology for a rising bourgeoisie. A comparison with Turkey would have been interesting. So also would the question of the role, if any, of Malaysia’s large Chinese community in the country’s Sudan involvement and its possible interface with private mainland Chinese capital both here and elsewhere in Africa.

Harry Verhoeven’s chapter, ‘Dams are development’, casts light on the Khartoum elite’s passion for dam-building as the key to development – a passion shared of course by China, whose construction companies are world leaders in the field. Among the fascinating details teased out in his account is the key role of Egyptian consent in enabling the dam programme to go ahead under the treaties governing Nile water allocation.

It is clear from this and other contributions that a crucial role in Sudan’s evolution was the ousting of Hassan al Turabi following the embarassment of the failed assassination of Egyptian President Hosni Mubarak in 1995. The abandonment of the attempt to spread radical Islamism made possible a rapprochement with Egypt, which enabled the programme of dam development to go ahead. It also led to a rapprochement with the Gulf states whose capital investment was attracted by the prospect of dam-enabled agricultural development.

As Verhoeven points out, ‘The petro-dollars generated by Khartoum’s oil sales are thus critical in paying back the loans given by Saudi, Kuwaiti and Emirati creditors for the dam programme. There is an interesting triangular relationship at work between Beijing, Cairo-Riyadh-Kuwait-Abu Dhabi and Khartoum that involves oil money, food production, cheap loans, dam construction, contracts and mutual diplomatic support. This division of labour – Sudan’s land and water, thanks to irrigation through Chinese-built dams will produce food for the Gulf Arabs who are to be paid back with Sudanese export crops and Chinese petrodollars by Al-Ingaz – is extremely beneficial for all the national elites involved. Its impact on the local population is far more questionable’.

The importance of this strategy for Khartoum is increased by the secession of the South and the long-term prospect of the decline of oil output, north and south. Meanwhile in the South, as Daniel Large points out, China’s image has suffered substantial reputational damage as a result of Beijing’s support for Khartoum in the oil war and as a supplier of arms and of weapon manufacturing capacity.

Nonetheless China, along with other Asian players, has been quick to establish links with Juba. Chinese entrepreneurs were on the scene even earlier, some coming up from East Africa. As a comparison, China’s position in Angola seems to have overcome any damage caused by its past support for UNITA though it is true that this association was less consistent and persistent than China’s alliance with Khartoum.

More widely Sudan does indicate the problems and complexities ahead for China’s twin policy pillars of non-interference in internal affairs and economic non-conditionality. China’s behind-the-scenes pressure on Khartoum played an acknowledged role in bringing about Sudan’s acceptance of international peacekeeping forces. Alexandra Cosima Budabin in her chapter attributes this shift to the international and US-based Save Darfur Campaign and its pressure for a boycott of what it labelled the ‘Genocide Olympics’.

China’s dual ‘hands-off’ approach is justified by the argument that national sovereignty, political stability and hard infrastructure are the essential preconditions of economic development and therefore of broader human rights. This collection brings out how this approach has developed and changed and will continue to do so under the pressure of global economic and ecological pressures and their erosion of national barriers.

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* Stephen Marks is a former co-ordinator of the Fahamu Emerging Powers in Africa Programme and has edited and contributed to several Pambazuka and other publications on China and Africa.
* ‘Sudan looks East: China, India and the politics of Asian alternatives’ is edited by Daniel Large and Luke A.Patey. James Currey ‘African Issues’ series. Special offer price £12.74 to 31 January.
* Please send comments to editor[at]pambazuka[dot]org or comment online at Pambazuka News.