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A New Nation: South Sudan Readies for Independence

On Saturday, South Sudan becomes the world's newest country and Africa's 54th state, a process that follows 50 years of bloodshed. Renewed violence on its borders has shaken hopes of a peaceful transition to nationhood, but the fledgling country is not a failed state in waiting, analysts and senior figures in the reconstruction effort told CNBC.com.

JUBA, SUDAN - JANUARY 09: Southern Sudanese celebrate at the end of the first day of voting for the independence referendum January 9, 2011 in Juba, Sudan. Southern Sudan is participating in an independence referendum today following a historic 2005 peace treaty that brought an end to decades of civil war between the Arab north and predominantly Christian and animist south. The south is expected to vote around 99 percent to secede from the north which will also give it a majority of Sudan's oil
Spencer Platt
JUBA, SUDAN - JANUARY 09: Southern Sudanese celebrate at the end of the first day of voting for the independence referendum January 9, 2011 in Juba, Sudan. Southern Sudan is participating in an independence referendum today following a historic 2005 peace treaty that brought an end to decades of civil war between the Arab north and predominantly Christian and animist south. The south is expected to vote around 99 percent to secede from the north which will also give it a majority of Sudan's oil

The signing of the Comprehensive Peace Agreement (CPA) in 2005 brought an end to a civil war between the ethnically and religiously distinct north and south of Sudan that had raged since before the country won its independence in 1955.

The CPA laid the ground for a referendum on independence in January 2011, in which more than 99 percent of voters backed secession. The declaration of independence will be read in the capital, Juba, at the grave of the liberation hero John Garang.

International actors, particularly the US, Norway and UK, have pumped resources into a state that has oil reserves but few roads, and will be among the poorest nations on earth.

With conflicts over resource sharing still raging with Khartoum, fighting in the border areas of Southern Khordofan and an ongoing dispute over the oil-rich state of Abyei, the governing party – the Sudanese People's Liberation Movement (SPLM), composed of former freedom fighters from the Sudan People's Liberation Army – faces an uphill struggle to build a new nation.

"There has never, throughout the history of post-independence Sudan, been effective governance in the south. In many respects state structures in South Sudan are five years old, they've been put in place since the signing of the CPA in 2005, so the baseline was an incredibly poor starting place." George Conway, head of programs for the United Nations Development Program in South Sudan since 2007, told CNBC.com.

"Most civil servants after the signing of the CPA didn't have higher education, less than 5 percent of them didn't have graduate degrees. Many civil servants were illiterate, they didn't speak English, and the state structures were built very rapidly."

In that context, Conway said, there has been strong progress, with 32 ministries set up, civil servants trained and a civilian "surge" of experts from the region moving in to plug the many gaps in the government's capacity.

The country's long civil war took much of the population out of the education system, meaning that capacity in public and private sectors is low, and cannot be quickly rectified, he noted.

"When you've had a population that's been so affected by generations of war, it will take a full generation to get through this and get out of it. It's essentially building up a whole generation of civil servants," Conway said.

"South Sudan is in a category all by itself in terms of the challenges," Richard Downie, deputy director of the Africa program at the Center for Strategic and International Studies in Washington DC, told CNBC.com.

Among the most pressing of those may be the need to transition the SPLM from a party defined almost entirely by its resistance and opposition to Khartoum into a genuine political party able to oversee the creation of a multi-party system.

"You look around the region and see other rebel movements that win political power and turn into pretty lousy governments," Downie said. "This is a bunch of rebel leaders used to giving orders, and transparency, accountability, those kinds of skills that are needed when you become a government, they're not really in evidence at the moment."

The relationship with the government in the north, which has said that it will respect the secession, is also critical.

Sudan produces around 500,000 barrels of oil per day, much of which is produced in the south, but shipped through infrastructure in the north. Like it or not, the two countries have a symbiotic relationship when it comes to their hydrocarbon wealth. Disputes over the state of Abyei, a major producing region that straddles both nations, look set to go on well beyond independence.

Around 97 percent of the south's scarce revenues will come from oil.

"Until such time that Juba can have an alternative pipeline infrastructure, Juba needs to cooperate with Khartoum and the two are dependent on the continuation of that singular resource that writes the budgets for the two countries," Stratfor analyst Mark Schroeder wrote in a research note.

There is also the huge challenge of governing the country's vast periphery. With few paved roads in an area the size of France, the ability of the government to project power and maintain the rule of law is in question.

Conway acknowledged that there had been "an overabundance of support that concentrates around urban centers and state capitals," but said that the government's ability to deal with security concerns and criminality in remote regions was improving.

Even with oil revenues, the new state is economically fragile. Proven oil reserves may not last out the decade, and alternatives need to be found, before international interest in South Sudan – heightened by a variety of factors, from the US government's political focus on "ungoverned spaces" to celebrity-backed campaigns – runs out, analysts said.

Agriculture is one sector that the government is keen to promote, and South Sudan has large areas of fertile land. However, with the social challenges what they are, fears that another aid dependent nation in a region with many countries still struggling to escape the economic traps of international financing are rising amongst the policy community, CNBC.com understands.

"It's very clear that (South Sudan) is going to depend on its neighbours, the region of the continent and of international partners for some time to come," Conway said. "We're seeing some of the worst human development indicators in the world – highest maternal mortality rates, very high poverty rates, very low gross enrolment rates and immunization cover rates, and all of this means that support will be required.

"The government does need a strategy about how to better work with international partners. And frankly the partners do need better strategies around how to ensure that the government is taking responsibility for service delivery."

Even so, Conway added, he is "broadly optimistic."

"I have seen over the last few years a peace process that has been very resilient. It's been challenged at a number of stages and things have always clicked into place, basically at the last moment," he said.

Contact Europe: Economy

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