South Sudan is seeking help from foreign governments including Turkey as its economy deteriorates amid ongoing efforts to crush a 3-year long rebellion militarily. Officials say the government’s economic strategy now depends on securing external financial assistance.
The scramble for resources comes after the International Monetary Fund and historical Western donor governments cancelled plans for a post-war bailout after the collapse of a peace deal signed in 2015.
Finance Minister Stephen Dhieu Dau visited Turkey and signed a trade and economic cooperation deal with the country’s Minister of Economy Nihat Zeybekci on April 26th. Zeybekci reportedly said at the signing that Turkish investors are interested in exploring opportunities in South Sudan’s mining, agriculture, livestock and fisheries sectors.
Speaking in an interview with The Messenger on Thursday, South Sudan’s director general for planning Phillip Ajak Boldit praised his boss Dhieu for his outreach to Turkey but also pointed out that he faces a virtually impossible task — keeping the government-run economic system in South Sudan afloat after years of wartime shocks.
“That minister was not just coming to (Turkey) to warm up the seat. He is a tested man of principles guided by hard work, commitment and dedication to serving his people and the country,” he said.
Ajak added, “But the problem is that he has now been given an assignment at the time everything has virtually collapsed; even Jesus Christ, the Son of God, cannot manage this situation if it is not because of being a son of God to perform miracles.”
South Sudan’s economy continues to deteriorate owing to a civil war that started in December 2013, declining by an alarming percentage. The government spends most of its money on weapons and military operations while facing threats of targeted economic sanctions, widespread infrastructure damage, diminished domestic consumption and production, and high inflation, which have caused dwindling foreign exchange reserves, a rising budget and trade deficits.
The value of the South Sudanese pound has plummeted. About a third of the population have fled from violence; within the last year some of the most productive farming areas have been depopulated after army operations.
Juba continues to give different justifications for the economic situation, blaming the ongoing war and the fall in global oil prices. In the meantime, the gap between the ruling elites and the majority poor in South Sudan increases along with the the proportion of citizens living under the poverty line.
The 2017 budget is considered the largest in the history of young nation, but the size of the budget does not indicate economic development, according to James Alic Garang, a senior economist at the Ebony Centre for Strategic studies.
“The economy is destroyed by war.” – Economist James Alic Garang
“Yes, the 2017 budget is the largest budget but this does not indicate an actual increase as a result of developing or expanding the economy, which is now destroyed by the war, but is due to inflating the value of expenditures that resulted from the large increase in prices caused by the collapse of the value of the pound to the dollar,” he explains.
Alic stresses that despite the increase in the budget, its real value when measured in US dollars is much less than previous years.
Can the government sustain its military and institutions if the economy continues to slide? Officials are hoping deals like the one signed with Turkey will help.
Presidential adviser on economic affairs Agrey Tisa Sabuni describes the deal with Turkey as a step toward economic recovery: “The signing of the trade and economic cooperation deal is another effort and strategy to find a way to return the economy to recovery path. And I therefore commend the minister for signing trade and cooperation agreement with the government of Turkey.”
“I also would like to state clearly and emphasize that strengthening our connections with the outside world is our strategic choice,” he adds.
In line with this strategy, some of South Sudan’s finance ministry staff are currently undergoing training in Turkey. And state media in Juba report that the Turkish finance minister has expressed willingness to travel to Juba with potential investors.
While the government is optimistic, experts are keen to underline that except for some investment in agriculture, energy, and tourism, the Turkish and South Sudanese economies share little common ground. Nonetheless, the new cooperation deal could lay the groundwork for expanding Turkish influence in years to come.