"IMPLEMENTING U.S. POLICY IN SUDAN"

TESTIMONY OF JOHN PRENDERGAST
INTERNATIONAL CRISIS GROUP

COMMITTEE ON FOREIGN RELATIONS
SUBCOMMITTEE ON AFRICA

JULY 11, 2002 HEARING

"IMPLEMENTING U.S. POLICY IN SUDAN"

In the last two decades of Sudan's civil war, there have been few hopeful
moments, and few windows of opportunity for making peace. In the aftermath
of the September 11 terrorist attacks, one of those moments arrived, and the
window of opportunity for peace opened. For a number of reasons, however,
the window is closing quickly. If more serious leverage is not immediately
brought to bear on the warring parties in the context of the current peace
talks taking place in Kenya, the window will slam shut, condemning the
Sudanese people to cumulative levels of death and destruction with few
parallels to any conflict since World War II.

The Answer to All Questions: A Just and Comprehensive Peace

The U.S. has a number of fundamental policy objectives in Sudan: countering
terrorism, promoting human rights and democracy, ending the war, and
supporting humanitarian assistance. All of these objectives are best
addressed through a comprehensive peace agreement which both reforms the
central government and provides for the exercise of self-determination for
southern Sudanese.

More than any other country in the world, the U.S. has the ability to move
the Sudan peace process forward. The U.S. has decided to focus on making
the IGAD process in Kenya a more serious one. So far, U.S. efforts have
been useful but by no means sufficient. This is why today's hearing is so
timely.

In the topsy-turvy debate over Sudan policy, the very idea of a negotiated
settlement has come under fire by those who see negotiating with the
Khartoum government as useless. That may be proven true, but in the absence
of a new U.S. policy objective which has not yet been formulated, such a
view abandons the Sudanese people, particularly southerners, to endless war.
In fact, southern Sudanese are prepared to continue the war indefinitely in
the absence of a just peace, a factor that continues to be underestimated by
mediators. But as long as an opportunity exists to end the conflict through
the conclusion of a comprehensive peace agreement, we must urgently and
diligently pursue that objective.

To be clear, in order for peace efforts to have a chance of succeeding, the
objective of the negotiations must emphasize a just settlement. There are
indications from the ongoing talks in Kenya that mediators and observers are
pulling back from support for self-determination in the form of a referendum
with the full complement of options, including independence. It cannot be
emphasized enough that southern Sudanese will continue the war, no matter
what the cost or the outlook, if this fundamental element of any potential
solution is not part of the deal in some form. Modalities can certainly be
negotiated, but the essential principle appears to under assault, and this
guarantees the failure of the negotiations. It is not too late to rectify
this.

The Missing Ingredient in the Peace Process: Leverage

Because the divergent positions of the parties are so entrenched, it is
unlikely that they can be reconciled through conventional facilitation
alone. More forceful diplomatic intervention -- of which leverage is the key
element -- will be required than is currently envisioned. Therefore, the
most visible missing ingredient of a potentially successful IGAD peace
effort is coordination of pressures and incentives.

Leverage does not grow on trees. It is created through leadership in the
development of a multilateral strategy of carrots and sticks, and its
judicious execution. Despite the influence the U.S. actually possesses over
the warring parties, American diplomats have frequently claimed in the past
that they lack the leverage to move the parties toward peace. Such claims
increase perceptions among Sudanese parties that the leverage the U.S. does
in fact enjoy will not be used during the negotiations - perceptions that in
fact reduce outside leverage in the manner of a self-fulfilling prophecy.

To be effective, pressures and incentives must be multilateral. As the actor
with the most potential leverage and the only one whom all Sudanese parties
believe can make peace, the U.S. should take the lead in organising the
judicious and tactically opportune application of these carrots and sticks.
This may be the single most important contribution the U.S. can make.
Leverage can be increased both through actions and positions taken in the
context of the peace process, and through wider policies pursued by the U.S.
Both are discussed below. All of these require U.S. leadership but would
have much greater effect if pursued - through the G-8, EU and other bodies -
with our European allies as well as with other countries with influence.

Building Leverage Through the Peace Process Itself

The peace process itself provides a number of opportunities for the U.S. to
increase its leverage on the parties in support of peace:

1. SUPPORT SELF-DETERMINATION: U.S. support for the right of
self-determination for the southern Sudanese people - in the form of a
referendum with the full scope of possible outcomes - provides the single
most important point of leverage on both parties for moving them toward a
negotiated settlement. In the absence of U.S. support for this position,
the SPLA eventually either will walk away from the talks or at best make no
meaningful compromises on any other issue, and the Khartoum government will
have no incentive to compromise as well, as it will get what it wants
without giving anything up. On the other hand, U.S. support for
self-determination will oblige the SPLA to compromise on other issues, while
creating the most important internal pressure on Khartoum to implement
whatever agreement it makes with the opposition in order to create the
strongest case for maintaining a unified Sudan. At present, mixed signals
from the U.S. and others have undercut this point of leverage, and it is
clear that the mediators underestimate the depth of southern Sudanese
sentiment in support of an independence referendum.

2. INCLUDE THE NORTHERN OPPOSITION: No agreement can be truly comprehensive
if it does not involve or gain the acceptance of the political parties that
comprise the bulk of the Sudanese electorate. Northern opposition parties
in the umbrella National Democratic Alliance, as well as the Umma Party,
should be involved more directly in the IGAD process. Their inclusion will
act as a moderating influence on the Khartoum government and the SPLA, and
will better position all actors to support the implementation of any
agreement. Until now, the U.S. and the IGAD states have not made the
widening of the process a priority.

3. STRATEGIZE WITH THE IGAD NEIGHBORS: When the U.S. was closely
coordinating its Sudan policy with Ethiopia, Eritrea and Uganda, additional
leverage was generated which resulted in the acceptance by Khartoum of the
IGAD Declaration of Principles. Now that the Eritrea-Ethiopia war is
concluded, it is time again to make a concerted effort to reconstruct the
partnership and focus it on bringing about a negotiated solution to the
Sudan conflict. This requires more focused, consistent and high level U.S.
diplomacy than that deployed currently.

4. STRATEGIZE WITH EGYPT: Understandably, focus on Egyptian policy has
centered on its inflexible opposition to any discussion of southern
self-determination, a damaging position that limits Egypt's role in any
peace process. Less understood, however, is Egypt's underutilized leverage
that it could apply particularly on Khartoum. Egypt has a vested interest
in a reformed Sudanese state, with a more moderate government. If strongly
and consistently engaged at high levels by the U.S., it could be a partner
eventually in developing and providing the kinds of serious concessions and
guarantees that the Khartoum government must accept to make unity desirable
to southern Sudanese. The U.S. also must have the hard discussions with
Egypt, again at very high levels, on the Egyptian posture regarding
self-determination.

5. STRATEGIZE WITH THE EU: The U.S. should work at high levels to convince
the EU that normalization of its relations with Khartoum should be made
contingent solely on implementation of a comprehensive peace agreement,
rather than on achievement of numerous short-term individual humanitarian
and human rights benchmarks as is currently the case. Senator Danforth's
upcoming trip to Europe would be an ideal opportunity to initiate greater
efforts in this regard.

6. INCLUDE THE PENTAGON: U.S. leverage with both parties is enhanced by the
degree to which the U.S. Defense Department is perceived to be backing the
process in a tangible way. To wit, one of the most effective elements of
the successful U.S. effort to resolve the Eritrea-Ethiopia war was to
include U.S. military officers as part of the U.S. negotiating team, and to
allow the team to travel on U.S. military aircraft. Pentagon support for
U.S. involvement in the Sudanese peace process in the form of personnel and
logistics is non-existent at present, and would be similarly useful now,
even moreso after September 11.

7. ISSUE AN ULTIMATUM: High level U.S. officials should make clear a basic
reality of U.S. domestic politics: if Khartoum obstructs the peace process
and is the reason for its demise, the U.S. will have no choice but to walk
away from the engagement required of a peace process and escalate its policy
against the government, with very uncertain outcomes given the increasing
frustration of the American constituency on Sudan. The SPLA should be
equally warned that if it is responsible for collapsing the talks it will
find far less sympathy in Washington for its cause.

Broader Carrots and Sticks in Support of the Peace Process

Beyond the leverage available through the peace process itself, there are
other key pressures and incentives the U.S. has at its disposal. The points
of leverage should be deployed solely in the pursuit of a comprehensive
peace agreement, not frittered away for lesser or incremental objectives. In
other words, normalizing relations, lifting economic sanctions, ending Sudan
's isolation, support in the Bretton Woods Institutions, ending support to
the opposition, and any other meaningful pressures should only occur when
the parties begin implementing the comprehensive peace agreement that they
sign. The following is an inventory of existing or potential pressures and
incentives that, if multilateralized, could make in an impact on the
calculations of the warring parties.

a. Pressures on the government:

· It is critical for the U.S. to maintain counter-terrorism pressure on
Khartoum. This has provided the most potent leverage on Khartoum's policies
in the aftermath of September 2001, since the Sudanese government remains
uncertain what the U.S. may yet do as it pursues its declared global war on
terrorism. This is particularly salient with regard to Pentagon
calculations. Short-term tactical cooperation from Khartoum should not be
confused with strategic redirection, which will only be ensured through the
kind of change that can be expected to accompany a comprehensive peace
agreement which reforms the central government.

· Continuing opposition to aid in the International Financial Institutions
(IMF and World Bank) make it extremely difficult for the Sudanese government
to rehabilitate its formal economy, making this, therefore, a very effective
form of leverage. Most crucial is the huge debt overhang, one of the
largest in the world, that if not addressed will continue to be a major
obstacle to economic development and lending. The government needs to get
back in a full program with the IMF in order to enter the Highly Indebted
Poor Countries (HIPC) program to qualify for serious debt relief. U.S.
votes on the IMF Board have so far prevented Sudan from moving too far up
the IMF ladder. The U.S. should continue to block aid to Sudan in these
institutions until a comprehensive peace agreement is concluded.
Ultimately, Sudan's economic recovery depends on an end to the civil war,
and nothing should be done to alter that fact prematurely.

· Pressure on investors in the oil industry translates into indirect
pressure on the Sudanese government, which is heavily dependent on the
revenues it receives from that sector. Passage of the Sudan Peace Act would
thus provide an important leverage point, because it would deny critical
capital markets to oil firms operating in Sudan. Pressure on the Canadian
firm Talisman and other Western oil companies that are considering starting
new operations in Sudan is particularly critical because these enterprises
possess technology that would enable the rapid expansion of oil production.
Only Talisman and other Western firms have this technology, and thus
Khartoum is heavily dependent upon them to unlock the full potential for oil
development in the country.

· Secretary O'Neill recently reiterated Bush administration opposition to
capital market sanctions, saying, "A better way to deal with Sudan is to say
no one should do any business with Sudan full stop." If the Secretary is
speaking for the administration, this would entail two actions on the part
of the U.S. We should close the exemption on importing Sudanese gum arabic,
Sudan's biggest export to the U.S. And we should go to other countries
currently doing business in Sudan and ask them to suspend their trade and
investment, or to invoke unilateral sanctions just as the U.S. has done.
This involves European partners like the UK, Germany and Switzerland, as
well as other governments that are investing heavily in and selling arms to
Sudan, such as China, Malaysia and Russia.

· Increased effort could be expended on investigating and highlighting the
issue of government corruption associated with oil development. Shining a
spotlight on excesses to the domestic Sudanese audience could increase
accountability. The U.S. could express support for the recently launched
"Publish What You Pay" NGO campaign which aims for companies to disclose
their payments to developing countries.

· Various forms and levels of aid to opposition and/or civil society
elements represent a potentially significant lever. The continuum begins
with democracy- and peace-building assistance to the SPLA/NDA and/or civil
society groups. In and of itself, this has a positive impact on the morale
of those struggling for change in Sudan, and helps sustain their struggles.
Moving along the continuum, support for the democratic administration of
opposition-controlled areas could demonstrate that alternative governance
can be better. Further along the continuum, communication and
transportation aid could be provided for the protection of civilian
populations in the south, east and south-center (Nuba Mountains and Southern
Blue Nile) who are subject to the worst vestiges of the government's war
tactics such as forced displacement, slave raiding, and repeated aerial
bombing by Antonov or helicopter gunship.

· Opposition to Sudan's status in the World Trade Organization until it
reaches a comprehensive peace agreement would also frustrate efforts to
reduce economic isolation prematurely.

· Much more robust and higher level diplomatic efforts could be expended on
reducing the unimpeded flow of arms to the Sudan government, which remains
on the U.S. list of state sponsors of terrorism. Under the Wassenar
Agreement, Eastern European countries voluntarily pledge to maintain certain
standards for arms transactions. Sales to Sudan certainly do not meet those
standards, and higher level and more public U.S. diplomacy should be
deployed to counter these sales, especially during the peace process. U.S.
officials at the highest levels should also engage China on its burgeoning
arms sales to Khartoum.

· Maintenance of international efforts to isolate Khartoum continues to be
an irritant to the government, meaning that every move they make in
international forums is a source of difficulty or controversy. Its defeat
in its quest for a seat on the UN Security Council in 2000 was a bitter one
for the government, and U.S. unilateral sanctions remains a stigma and
economic hindrance.

b. Incentives for the government: Key incentives aimed at Khartoum could
include the following:

· Sudan is eager to reduce its debt and improve its economy as the
government's abidance to IMF-approved shadow structural adjustment programs
attests. Removing U.S. opposition to Paris Club financing, IMF lending, and
World Bank credits for Sudan when a peace agreement is concluded probably
would be the largest incentive the U.S. could offer. This would open the
door to HIPC for Sudan, a key to unleashing it economic potential.

· Sudan used to be one of the largest recipients of U.S. non-emergency
foreign aid; today it receives none. Implementation of a future peace
agreement would usher in a new era of improved U.S.-Sudan ties and once
again make Sudan eligible for foreign assitance. Rather than uncoordinated
bilateral assistance and promises of aid to the post-war reconstruction of
the south, the U.S. should work with international donors to create a Sudan
Reconstruction Trust Fund aimed at national reconstruction, from which both
the north and the south could benefit.

· Sudan wants a full-fledged U.S. embassy in Khartoum. An increased U.S.
embassy presence in Khartoum will allow the U.S. to better monitor the
government of Sudan and put personal diplomatic pressure on Khartoum to
implement a comprehensive peace agreement and reduce human rights abuses.

· Ending efforts to isolate Sudan in international forums is an important
objective of the regime, whether it is removing opposition to a seat on the
Security Council, removal of U.S. unilateral sanctions and designation as a
state sponsor of terrorism, or unlocking foreign assistance and debt relief.
The government of Sudan is eager to legitimize and reintegrate itself within
the international community.

· Potential large-scale U.S. corporate investment in the development of the
oil sector would be a major boost to the government's exploration and
exploitation plans. Although Khartoum's oil efforts can continue without
U.S. company participation, the involvement of U.S. majors is perceived as
ideal. Lifting U.S. unilateral sanctions at the conclusion of an agreement
would unlock U.S. investment in the oil sector.

c. Pressures on the SPLA: There generally are fewer levers of pressure on
opposition groups than on governments, but sticks aimed at the SPLA include
the following:

· A major effort could be undertaken to try to reduce arms transfers to the
SPLA if it is perceived to be obstructing or collapsing the peace process.
This would include pressuring regional arms suppliers as well as invoking
the Wassenar Agreement as is suggested above in the government pressures
section.

· Regional governments and the United States are the key political
supporters of the opposition. At key junctures in the negotiations, it will
be crucial for these actors to be willing to apply diplomatic pressure on
the SPLA to participate constructively in peace talks.

· Through the UN Operation Lifeline Sudan, the SPLA's relief arm, the Sudan
Relief and Rehabilitation Association, is a member of the tripartite
agreement between the government, SPLA and UN. If the SPLA becomes the
obstacle to a peaceful settlement of the conflict, the treatment of the
SPLA/SRRA within the OLS framework should be reconsidered and downgraded.

· Any institution-building support for the SPLA/NDA and its civil
administration capacity should be terminated if the SPLA becomes the
obstacle to a peaceful settlement.

· African countries that support the SPLA and NDA militarily have the most
leverage over the opposition. This leverage should be utilized in support
of the peace process and the objective of a comprehensive peace agreement.

d. Incentives for the SPLA: There are also fewer incentives for the
opposition, but carrots for the SPLA might include:

· Promises of regional and international support for the implementation of
whatever emerges in a comprehensive peace agreement are the most important
incentives for the opposition. For example, an international observer force
will be key in guaranteeing the peace, external monitoring of any wealth
sharing agreements will be needed to ensure implementation, and human rights
monitoring will be required to guard against continuing abuses or
retribution.

· The creation of a major blueprint for the reconstruction of the south,
including governance, infrastructure, and social safety nets, will be a
major incentive for southern negotiators and - if widely advertised - will
be an element of popular accountability for the SPLA to negotiate in good
faith.