South Sudan’s pipe dreams

As negotiations between the two Sudans languish, South Sudan is pushing the construction of an alternate oil pipeline to bypass the north. But some of the South’s own friends are warning that it’s playing with fire.

"The alternative plan is that in 30 months, we will have a pipeline in place coming from South Sudan and going to [Kenya’s] Lamu Port," said South Sudanese Ambassador Dhanojak Obongo at a July 9 event marking his country’s first anniversary at the United States Institute for Peace in Washington, D.C.

South Sudan shut down oil production in January 2012 as part of its dispute with Sudan, its parent country, over pipeline transit fees.

However, the Lamu Port project — a $23 billion endeavor slated to include a second deep water port for Kenya, railways, oil refineries, highways, and pipelines connecting the port to South Sudan and Ethiopia — only broke ground a few months ago. Experts say that the South’s belief that it could be completed in two and a half years is optimistic in the extreme.

The country’s irrational exuberance was highlighted by remarks made by a senior U.S. official at the anniversary event. "I have talked to a lot of people about this alternative pipeline and frankly five years is the time frame most people say is the best one can hope for," said U.S. special envoy to Sudan and South Sudan Princeton Lyman. "There has to be an agreement with Sudan in the interim that would allow the government to have a basic income that would enable it function."

Lyman described the inability of the two countries to broker an agreement as "mutual economic suicide."

South Sudan seceded from Sudan in July 2011 after decades of warfare. The two countries are still at loggerheads over the demarcation of their borders. In addition, South Sudan’s nation-building process has been hindered by its near total lack of development. According to the Financial Times, only 1 percent of the population has a bank account. South Sudan gained independence through a referendum in 2011 and is scheduled to hold its first formal elections in 2016.

South Sudan’s difficulties aside, Kenya — where the pipeline would terminate — has a reputation as one of the most corrupt countries in the world. An infrastructure project of this magnitude is sure to invite the usual delays, kickbacks, and side deals. The pipeline also traverses the country’s perpetually insecure northwest region.

Ambassador Obongo’s claims suggest that the South regards the Lamu pipeline as its trump card in the ongoing economic war of attrition with its northern neighbor. But how South Sudan’s economy can hold out for even 30 months without 98 percent of its revenue stream — which comes from oil — is hard to imagine even under the best of circumstances.

South Sudan’s economy is imploding even as it faces its worst food crisis since 2005, according to Oxfam. In northern Sudan, President Omar al-Bashir’s attempt to impose austerity measures to cope with the loss of oil revenue has spurred widespread unrest that could lead to all-out insurrection against his regime. Taken altogether, all this makes it even harder to understand why the two countries just don’t sit down and work out a deal.