Juba, Southern Sudan

Sudan’s long history has been closely tied with Egypt’s on its Northern border. The British control of Sudan from 1899 – 1956 was motivated largely by its desire to safeguard its planned irrigation damn at Aswan by controlling the Nile, which flows North through Sudan and Egypt into the Mediterranean. For the Nile, down river is north, the opposite of all the big rivers I have known of.  The British effectively ruled the largely Arabic, Muslim North and the Black African Animist/Christian South separately. When Sudan became independent from Egypt and the UK on January 1, 1956, it was the largest country in Africa geographically but with a modest population of only 42 million.

A civil war between Northern and Southern Sudan broke out the year before independence and lasted for 17 years. The war resulted from Southern concerns over Northern domination and a variety of personal ambitions. Following a ten-year hiatus, war resumed when the North attempted to impose Islamic law on all of Sudan, contrary to the terms of the Addis Ababa Agreement of 1972 than ended the first civil war.  This second civil war raged until a Comprehensive Peace Agreement (CPA) was signed in January 2005. The Sudan People’s Liberation Army (SPLA), which now rules Southern Sudan, was formed at the beginning of this second civil war. Omar al-Bashir of the National Congress Party (NCP) is President of Sudan, ruling from the capital of Khartoum in the North. The International Criminal Court in The Hague indicted al-Bashir for war crimes on March 4, 2009.

The per capita income of Sudan is one of the lowest in the world at $2,380, which includes substantial oil revenue going to the government, and much lower for the South.  A census in 2008 counted 8.3 million people in the South, though some think the actual number is significantly larger. The two civil wars resulted in the deaths of 2.5 million Southern Sudanese, massive destruction, and infrastructure neglect in the South.

The Comprehensive Peace Agreement under which the country is now governed was designed to “Make Unity Work” by granting considerable autonomy to the “Government of Southern Sudan” (GOSS) in Juba, which oversees regional (state) governments and participates in the national government in Khartoum, sharing oil revenue with the South (where most of the oil fields are located), and other sharing arrangements. The CPA also established the Bank of Southern Sudan (BOSS) in Juba as a branch of the Central Bank of Sudan in Khartoum, though it operates somewhat independently. Very importantly the CPA provides for a referendum in the South in January 2011 of whether it wants to
become an independent country. The wide spread view in the South (I am told) is
that the North has not dealt and shared fairly with the South and that it will vote for independence.

I am working there to help the GOSS chose an appropriate monetary regime and to prepare it to issue and manage its own currency, if, as expected, Southern Sudan does become independent next year. In this capacity I am working for Deloitte Consulting under a USAID contract. My first two sets of meetings with the management of BOSS were in Nairobi last month and in 2007. My most recent meetings were in Juba a week and a half ago. While we have advised that the conditions for the successful launch of a new currency would be better after several years of dollarization, the Southern Sudanese want
their own currency as soon as possible. The management of the BOSS with whom I
work has agreed with us that such a currency should be issued under currency board rules (see my book about the currency board I helped establish in Bosnia, “One Currency for Bosnia”). I am now working with my Deloitte colleagues on drafting a new central bank law and an establishment plan for a new central bank, both to be discussed and finalized when I return to Juba in September.

I was not allowed to travel outside of Juba for security reasons. Juba, itself is a garrison city of refuge for hundreds of thousands of Southern Sudanese from years of war. Since the peace agreement in 2005 Juba’s population has exploded from 160,000 to over 1.1 million today. The capital city has few paved roads and I never imagined that the hills and valleys of rutted city roads could be so deep. Malaria is a problem. A scattering of huts surrounds
our relatively lovely camp on the banks of the White Nile. Our driver was proud to live in one such hut, which, he explained, has a real bed (off the ground with a mattress). Apparently that is all that it has. My colleague Adam, who has been in Juba for over a year, described a father and his four little sons who emerge every morning from their hut neatly dressed and with smiles on their faces. Adam asked the father, why they smile so brightly each morning. “Because we know we will have food today,” he replied.

These good and long suffering people deserve better. I don’t really know whether independence or Making Unity Work will be better for them. But I am happy to contribute what I can to at least improving the prospects of their having a stable currency if they issue one.

I am reluctant to photograph people in such poverty, so below you see two of my colleagues breakfasting at our lovely Camp by the White Nile.

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About wcoats

Dr. Warren L. Coats specializes in advising central banks on monetary policy, and in the development of their capacity to formulate and implement monetary policy. He is retired from the International Monetary Fund, where, as Assistant Director of the Monetary and Financial Systems Department, he led missions to over twenty countries. Before then, he served as Visiting Economist to the Board of Governors of the Federal Reserve System, and to the World Bank, and was Assistant Prof of Economics at the Univ. of Virginia from 1970-75. Most recently he was Senior Monetary Policy Advisor to the Central Bank of Iraq; an IMF consultant to the central banks of Afghanistan, Kenya and Zimbabwe; and a Deloitte/USAID advisor to the Government of South Sudan. He is currently a member of the Editorial Board of the Cayman Financial Review and until the end of 2013 was a member of the IMF program team for Afghanistan. His most recent book is entitled "One Currency for Bosnia: Creating the Central Bank of Bosnia and Herzegovina."
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2 Responses to Juba, Southern Sudan

  1. Jess says:

    Hi Warren,

    I’ve been reading your blog before I finally set foot to Juba. Are you still in Juba? If yes, it would really be a pleasure to meet you.

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