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Gulf pledges give Sudan a short-term breathing space
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As the debate over Sudan's political future continues, the country's economy faces the risk of further chaos and economic aid pledges are expected to provide short-term relief, economists say.
Reuters quoted bankers and other officials as saying the massive protests that pushed the military to oust President Omar al-Bashir last month had cut back on business while Sudan needed urgent resources to pay for wheat, fuel and medicine.
About four weeks after Bashir's departure, army commanders are in talks with opposition factions and groups of protesters over how to lead the country in its new era.
As they continue to talk, banks say they still lack the foreign exchange needed to pay off imminent commitments, while farmers are looking for supplies for the summer planting season, which begins in weeks.
"The public confidence will collapse, the banking system crisis will continue, and the economic meltdown may even worsen," said Ibrahim al-Badawi, a Sudanese economist and former World Bank official in Cairo.
Badawi and other economists pointed out that Saudi Arabia and the United Arab Emirates last month pledged $ 3 billion in aid, which would only provide a short-term respite.
Saudi and UAE support includes a $ 500 million deposit at the Central Bank of Sudan, while the remainder goes to the fuel, wheat and medicine bill.
A Sudanese banker in Khartoum said the UAE was the only one to send money to Sudan so far, with $ 250 million deposited in the central bank. The bank estimated that this would cover basic requirements for a month or two.
Badawi said that even if the rest of the Gulf money came, and state coffers were reported to have recovered gold and hundreds of millions of dollars in homes of former officials, it would not support the economy much longer.
"more difficult"
Any new government emerging from the talks between the army and the opposition factions will face the same problems that toppled Bashir, from unbearable government support to the lack of liquidity and fuel, while it will have to deal with the aspirations of the big people.
In the meantime, citizens continued queuing for gasoline and cash. Business activities also slowed as managers waited for the clarity of the direction of import and foreign exchange policy.
The economy is also under Bashir's legacy, with sanctions initially imposed for his support of armed groups and later for his crackdown on rebels in the western province of Darfur.
As Sudan is still on the US list of state sponsors of terrorism and has arrears to the International Monetary Fund (IMF) of about $ 1.3 billion, it will not be able to appeal to the IMF or the World Bank for support. Sudanese banks are struggling to restore correspondent relationships with foreign banks.
The banker in Khartoum said they now needed to make efforts to meet the obligations. "If they lose confidence or contact with existing correspondent banks, it will be more difficult to move forward."
The United States has said it will not lift Sudan out of the terrorism list as long as the military takes power.
Mohammed Harun, a professor of social sciences at the University of Khartoum, said Sudan's main season for local crops and export crops would start in weeks, and supplies would be needed.
"This is a problem that the new government must deal with quickly," he said.
The military council said on April 28 that it had run the fuel and other requirements of the summer planting season and was working to provide the central bank with funds.
The spending on Sudan's vast military and paramilitary security network is also high.
Badawi, who estimates that both security and support devour more than 75 percent of the budget, says taking advantage of the World Bank's program to dismantle armed groups will require US support and more financial support from the Gulf.
But many protesters say they reject Gulf aid for what might give it influence to the Gulf states.
"The price may be high for the grants we may get from some countries in the region," said Aaron.
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