Sudan turmoil explodes as government bows to IMF demands

A week of violent demonstrations across Sudan, sparked by the cancellation of state fuel subsidies, has culminated in calls for the removal of President Omar al-Bashir’s government by opposition groups.

Following a meeting between International Monetary Fund officials and senior government figures, the Sudanese government announced last Monday it would cancel state subsidies for fuel and cooking gas, almost doubling prices.

Petrol stations in the capital Khartoum raised the price of a gallon of fuel from 12 Sudanese pounds to 21, and cooking gas rose from 15 to 25 pounds. The minimum monthly wage in Sudan is about 330 pounds.

Protesters expressed their anger at the government announcement by holding demonstrations across the country, which led to attacks on police stations petrol stations.

Amnesty International said at least 50 demonstrators were killed on Tuesday and Wednesday alone by security forces, who were “shooting to kill”. Activist groups claim more than 100 protesters have died.

Sudanese Information Minister Ahmed Bilal Osman, defending the government response to the protests in an interview with Al Jazeera, said demonstrators were in engaged in “terroristic actions”.

Demonstrator calls for the immediate removal of al-Bashir’s regime are also finding support in the opposition National Umma Party.

“This government cannot be reformed, it has to be changed. A national transitional government should be put in place to put in a new constitution,” said Sadiq Al Mahdi, the party’s leader.

The NUP has called for a general strike and sit-ins. The activist Girifna movement is calling for all Sudanese people to take to the streets, and for the armed forces to support the uprising.

Crippled economy

The government adopted an initial package of IMF recommended austerity measures in June 2012, but the National Congress Party had until Monday resisted its calls for the complete cancellation of fuel subsidies.

An IMF mission led by Edward Gemayel carried out its first round of meetings in July, holding consultations with Finance Minister Ali Mahmoud Abdul Rasool, and head of the Central Bank Mohamed Kheir Ahmed Elzubeir.

This month’s second round of talks, which appear to have led directly to the fuel subsidy announcement, formed the IMF’s Article IV consultation with Sudan, which is a prerequisite of IMF membership and access to credit.

Sudan’s economy has been in free fall since the secession of South Sudan in July 2011, when the country lost 75 percent of its oil reserves. Prior to the split Sudan experienced substantial economic growth driven by oil exports and foreign direct investment, with nominal GDP per capita more than quadrupling between 1999 and 2010.

But Sudan’s growth was too heavily reliant on oil. When oil export revenues dropped and austerity measures were introduced the country entered a depression, losing more than 15 percent of its GDP in 18 months.

Before the secession, China represented 58 percent of the country’s exports, with significant trade relationships with Japan (15 percent) and Indonesia ( nine percent). Those export deals are now gone, and countries such as the United Arab Emirates and Saudi Arabia, previously minor trading partners, account for most of the market. The total value of Sudan’s exports halved in a single year.

Despite 80 percent of the population working in agriculture – especially the harvesting of cotton and peanuts, and production of cereals such as sorghum and millet – Sudan has to import food.

Inflation sharply rose in Sudan last year, reaching 44 percent in December, with much of the rise coming from basic food items such as meat, fruit, and milk.

Three-and-a-half million Sudanese face “stressed or crisis” level food security, according to the Famine Early Warning System, leading to Kamal Omer of the opposition Popular Congress Party to refer to the protests as a “revolution of the hungry”.

Sudan’s industrial sector is also shrinking at a terrific rate. In 2010 its growth was in the top fifth globally; now it’s shrinking at a rate of 29 percent, second only to Syria’s. The budget deficit, meanwhile, was last estimated to be about $3.7bn (-6.2 percent of GDP).

Division of the kingdoms

“The removal of the fuel subsidies is a direct consequence of South Sudan’s secession, and Sudan’s economy has been reeling from this blow ever since,” James Copnall, author of the new book A Poisonous Thorn in Our Hearts: Sudan and South Sudan’s Bitter and Incomplete Divorce, told Al Jazeera.

“Inflation has soared and people are finding it harder and harder to make ends meet.”

While Sudan ‘s economy flounders, in South Sudan a 16-month shutdown of oil exports over a dispute with its neighbour to the north ended in April, and output has now reached 240,000 barrels a day.

South Sudan had its own IMF Article IV consultation last Wednesday, when Finance Minister Aggrey Tisa Sabuni met with IMF officials for advanced negotiations on support under the Fund’s Rapid Credit Facility.

While the IMG is insisting on more austerity in Sudan, for the South it is negotiating more loans and supporting some expansions in state spending.

The 2013/14 budget strikes the right balance between increasing spending on priority areas and maintaining economic stability. The mission also welcomes the authorities’ plans to lift fiscal austerity gradually as the oil revenue stream becomes more certain,” the IMF said in statement last week.

Copnall said authorities in South Sudan are likely monitoring the events in Sudan with great interest.

“The two Sudans have squabbled and fought over the last two years, including through economic means. There are still many in South Sudan who desire Bashir’s downfall, so Juba will be watching these events closely,” he said.

South Sudan’s economy is projected to grow at a rate of 49.2 percent in 2014, according to the World Bank.

History of IMF ‘adjustment’

Sudan’s first significant international credit programme, designed to counter economic problems not dissimilar to those Sudan faces today, came from the Arab Fund “Breadbasket” plan in 1976, which aimed to transform the country’s agricultural production.

Research from the University of Bremen’s Sudan Economy Research Group into the plan shows this first attempt at structured international investment had serious problems, particularly in its unequal approach to the territory. The plan assigned only 4 percent of the investment to the country’s south, harking back to the colonial British policy of separate development, and reinforcing ethnic tensions.

The Arab Fund plan failed, but in 1978 the IMF instituted a six year credit plan for Sudan contingent on extensive “structural adjustment” and austerity, including the “deferment of all new government projects”.

Five years of depression ensued, with a total of -3.9 percent growth over the six years. Sudan began to renege on IMF commitments and its membership was suspended.

In 1990, following a military coup that brought Omar al-Bashir’s government to power, Sudan returned to the IMF and began another round of austerity. Price controls were abolished, leading to high inflation, and unemployment soared as newly privatised sectors retrenched.

The number of general physicians declined by 35 percent between 1990 and 1993, and the percentage of the population below the poverty line rose sharply.

Once again the country built up arrears and ceased servicing its debt. Sudan became the world’s largest debtor to the World Bank and IMF in 1993.

‘Without major unrest’

The IMF based its case for the latest round of subsidy cuts on its being “fiscally costly and inefficient”, arguing the removal would “reinforce economic growth” in Sudan. It also argued the subsidies promoted inequality.

“A very large share of the benefits from universal price subsidies goes to richer households, further reinforcing existing inequalities of income and consumption. Overall, almost 50 percent of subsides accrues to the richest 20 percent of households,” the IMF noted in a report last year.

But some have argued the IMF is overlooking the scale of the impact subsidy cuts will have on ordinary Sudanese people.

“The IMF neglect the fact that the economic crisis in the short-run is inextricably linked with the current political crisis, and that the two must be solved simultaneously,” said Rick Rowden, former senior policy adviser for Action Aid.

“Cutting fuel subsidies as a way of addressing Sudan’s fiscal deficit may seem reasonable in the IMF’s abstract econometric models, but it is actually quite unreasonable when applied in the context when many people are already eating only one meal a day,” he told Al Jazeera.

The IMF identified in its November 2012 report that this latest attempt at liberalisation and spending cuts presented “policy challenges” for the government, particularly stemming from the “adverse impact on the poorest households”.

Moeketsi Majoro, then IMF executive director for Sudan, also noted it may be necessary to increase corporate income tax from 15 to 30 percent in order to pay for new social security programmes. No such policy has been forthcoming, however, nor has additional IMF funding for it been offered.

The IMF was nonetheless optimistic that the cancellation would not lead to the kind of public anger and protest seen across Sudan the past week.

“International experience shows that most subsidy reforms occur without major civil unrest,” it said.

But Sudan analyst Aly Verjee said the IMF failed to take into consideration the reality on the ground.

“Their economic models seem to have overlooked the cost of scores of destroyed businesses and petrol stations, the costs of [even more] repression and brutality and the blow to productivity with hundreds of thousands of days of school and work lost,” wrote Verjee.

 

This article was originally published with Al Jazeera on September 29th 2013.

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Tunisia: Labour and the Capital

Protests are continuing into their second week in Tunisia’s capital and the towns of Sousse and Gafsa, where Tunisians are making clear that the murder of left-wing opposition leader Chokri Belaid will not be quickly forgotten.

The charismatic head of the Democratic Patriots Party and government critic was shot four times in the head and neck outside his home on February 6, sparking a wave of demonstrations against the ruling Ennahda party, who many are blaming for Belaid’s death.

The murder has initiated a political crisis in Tunisia with both President Moncef Marzouki’s Congress for the Republic party on one side, and the Ennahda Prime Minister Hamadi Jebali on the other, threatening to resign from government if their competing programmes for stabilising the country are not put in place.

Union power

In perhaps the most striking response to Belaid’s murder, the country’s largest trade union, the Tunisian General Labour Union (UGTT), called a general strike that brought the nation to a stand-still, from the phosphate mines of the south to Tunis’s Westernised Avenue de France.

Unionisation in Tunisia is generally high, with peak figures in the industrial production sector, which accounts for more than 30 percent of GDP. The UGTT claims total membership of around half a million workers in a country with a population of 10.6 million.

In the poorer South – particularly in the mining town of Gafsa – trade unions are particularly active. Resistance against the January appointment of Ennahda members to key positions in the largest mining plants is ongoing.

During the mass protests that led to President Zine Abedine Ben Ali fleeing in the 2011 Jasmine revolution, the unions gave up their long-term support for Ben Ali. After criticism from within their own ranks, unions joined the opposition.

Building on their experiences leading precursor protest movements in 2008 and 2010, the unions provided an organisational structure that helped make the scale and persistence of the demonstrations possible.

“Since Tunisia’s independence, the labour movement served as a rare legal conduit for expressing dissent… It played a key role in sustaining the 2011 protest movement, which it framed as rooted in economic grievances,” according to congressional researcher and Africa analyst Alexis Arieff.

This history of dissent in Tunisia, from independence in 1956 to Ben Ali’s departure in 2011, is well-known across the North African country.

But the labour movement is by no means universally popular. For all its influence, the unions failed to win significant parliamentary representation in the 2012 constitutional elections.

Tunisia’s religious right have long opposed its programmes, in some cases by violence. In February 2012, the International Trade Union Congress reported that UGTT regional offices in Bou Salem, Ben Gardane, and Jendouba were burned down by Salafi groups, which labelled the organisation an “enemy of God”.

‘Escalating violence’

“Violence against union members is escalating in our country, and one of the aims of our strike was to send a message to stop such violence,” Sassi Nasseddine, a senior member of the UGTT told Al Jazeera.

“We have repeatedly asked the government to investigate attacks, but until now there have been no results. No one has been brought to trial, so there is anxiety and anger within the unions that those who use violence are not being brought to justice.”

Some have pointed to the “leagues for the protection of the revolution”, as an example of a group supportive of Ennahda that engages in political violence, and disruption against centres of secular opposition like the unions.

In the case of Lofti Naqdah, a regional leader of the secular Nida Tounes party, accusations against ultra-religious groups have reached the level of murder.

An autopsy released just prior to Belaid’s murder confirmed that Naqdah had been attacked by government supporters, contrary to the government line that he died of a heart attack. Said Chebli, head of the Tataouine League, was implicated in the killing.

”These people work in the name of Ennahda. They are people from Ennahda, close to Ennahda, former convicts hired by Ennahda, and people whose consciences Ennahda bought,” said Jilani Hammami, a member of the Workers party.

A spokesperson for the UGTT told Al Jazeera that in December their annual event commemorating the assassination of the union’s founder, Farhat Hached, was attacked by assailants the union allege to be Ennahda hardliners.

Ennahda denies any official connection between the party and the leagues for the protection of the revolution and has repeatedly denied sanctioning any attacks on activists or trade unions.

In a statement published on the party’s website, Sabhi Atiq, President of the Ennahda parliamentary group, said the party supports the “legitimacy of union activity” and condemned the attack on the Hached commemoration event.
“As a principle, Ennahda is against all violence,” Zoubair Chhoudi, an Ennahda spokesperson, told local news site Tunisia Live.

The UGTT said they would continue to pursue justice for attacks against them using all available political processes.

Expanding power

The union movement has found its reach extending even to places where it was not well represented prior to 2011, supporters said.

Tunisia’s Internal Security Forces were historically a central arm of dictatorial power, and are still an inescapable part of daily life. Military troops and armoured vehicles behind barbed wire permanently surround the statue of the great philosopher Ibn Kaldun on Tunis’s central Avenue Habib Bourguiba.

But with the sector’s recent unionisation, the security forces have begun to experience a level of independence, and an accompanying desire to become a properly neutral professional force.

This once again puts the unions in conflict with the government. At a police union meeting in January, members angry with interference from the top of the Interior Ministry, de rigeur in the old regime, even called for the resignation of Ennahda Interior Minister Ali Laarayedh.

“Unionisation of the security forces was a radical concept for Tunisia,” explains Monica Marks, an Oxford University Middle East Studies doctoral candidate based in Tunis.

“The idea of injecting more independence into the security forces, like unions or civilian oversight, is anathema to many of the old guard still working within the Interior Ministry. The UGTT also represents a significant base of oppositional power, and this threatens Ennahda.”

Marks made clear that the Interior Ministry, like many of Tunisia’s government departments, is a complex institution, and far from fully under Ennahda control.

Nonetheless, she added: “the government is increasingly seeing the unions as an adversarial political force bent on a mission of attacking them.”

 

This article was originally published with Al Jazeera.