Chairperson: Ambassador Shashank
Discussants: Ambassador Rajeev Bhatia and Professor S N Malakar

Ms. Beri’s paper focuses on the upcoming referendum that brings forth the complexities of energy politics in Sudan. The referendum is important for both North and South Sudan. The deep historical and commercial ties between Sudan and India mean that the developments in Sudan pose India with numerous challenges. India’s strategy of engaging with Southern Sudan in recent years, however, may reduce any adverse impacts of events. Within Sudan itself, North Sudan mainly views the possible secession of the South as a disaster due to the extensive oil production in the South – around 90 percent of oil revenues in Sudan come from the southern region of the country. Ms. Beri’s paper aims to investigate the complexities of Sudan in this transition period and its implications for India.

Talks on post-referendum scenarios began in July 2010 between members of the National Congress Party and the Sudan People’s Liberation movement. The discussion agenda includes issues such as security, citizenship, economic and natural resources, international treaties and legal issues. A crucial issue confronting the government is citizenship owing to the unclear status of Southerners living permanently in Northern Sudan and of Northerners settled in South Sudan. There is also the issue of management of natural resources – Sudan’s discovered reserves are estimated at five million barrels with the majority of these being in the South. Although the Comprehensive Peace Agreement (CPA) between the North and South restored peace beginning in 2005, Sudan’s main oil producing region, Abyei, is situated on the North-South border (Abyei accounts for around 13 percent of the country’s total income from oil exports). This has exacerbated the situation to spill into a boundary dispute over Abyei and the presence of other oil fields in these frontier areas.

Sharing of oil revenue is another area of contention. The CPA mandated equal sharing of oil wealth generated from the oilfields located in the South; however, here have been doubts about transparency in allocations of generated revenues. The North is heavily dependent on oil revenues generated in the South for the developmental progress of the Northern region. Also, a large number of Northerners are employed in the Southern oil fields. The failure of both sides to reach an agreement would likely lead to these opportunities vanishing for the North. (Reports indicate that the North has been seeking alternate sources of energy, particularly hydroelectricity, to meet this challenge). On the other hand, the dilemma for the South is about access to oil infrastructure. Facilities such as pipelines, refineries and storage and export terminals are in the North. A split would mean disruption in the South’s continued usage of this infrastructure. Ms. Beri points out that in the short term, both the North and South will continue to be dependent on each other for the utilization of oil wealth. Apart from these, there is also the question of sharing of water resources in the Nile river basin.

There are a number of scenarios predicted for Sudan – complete separation into two independent states, two independent states with an open border, the confederalist option, and a unified Sudan.

Although India’s relations with Sudan date back to ancient times, India had established minimal contact with the South until recently. Ms. Beri observes that the Indian government has supported Sudan on many occasions – India’s Election Commission helped organize Sudan’s first general elections in the late 1950s; Indian engineers played a major role in setting up Sudan’s sugar industry and railways. Politically, there is mutual support – Sudan has supported India’s aspirations for a permanent seat on the United Nations Security Council; the Indian government agreed to assist Sudan in entering the World Trade Organisation (WTO); India was given observer status at the March 2006 Summit of the League of Arab States in Khartoum; India also extended it support for the sovereignty, unity ad territorial integrity of Sudan, and affirmed that Darfur is an internal crisis that should be resolved by the government of Sudan in consultation with the African Union; India has also sent peacekeepers to the UN Peacekeeping Mission in Sudan.

The referendum can also impact India’s substantial investments in Sudan’s energy sector, largely in the South. Sudan was the first African country that India sought equity assets with. As of January 2010, Sudan has sought fresh investments by India particularly in the offshore natural gas blocks; India on the other hand has offered its assistance in modernizing Sudan’s oil refineries in addition to providing training for its technicians. One of the biggest challenges for India would be the possibility of a new government in South Sudan undertaking policy changes in the energy sector and canceling standing contracts. The fate of India’s investments in Sudan depends on the outcome of the upcoming referendum in the South. Ms. Beri points out that it is most likely that the South will split and declare itself independent. But taking into account the extent of interdependence between the North and South, a resumption of hostilities and disruption of oil exports would only cut the cash lifeline that is indispensable to both governments. India’s strategy of engaging with the Government of Southern Sudan beyond oil, in the recent years, may reduce the adverse impacts of a split between the North and South. On India’s stance on the issue, the paper concludes that India should stand with the international community in assisting with a peaceful and stable transition in Sudan.

Discussion

Ambassador Bhatia stressed the importance for India to play a larger political role in this issue, in addition to having already established a good economic presence in Sudan. The possibility of Ms. Beri’s analysis being shared and discussed with the Indian Ministry of External Affairs (MEA) was also discussed. Professor Malakar laid out the possible impacts of this referendum including on the ethnic, religious and social compositions of Sudan. India has in common with Sudan the aspects of cultural divisions and a colonial legacy, and hence holds the hope that the referendum will be successful. Brig. Dahiya suggested that the paper would benefit from being divided into current and likely developments, the present state of India’s relations with Sudan, the present and likely state for Sudan, and the challenges and opportunities for India. He also observed that inter-Sudan dynamics need to be studied further. Another aspect to consider would be the question of which side the African Union and the Arab League would take on the issue; India might want to take a balanced position and not a very proactive approach so as not to act as an irritant to any side. Brig. Dahiya also pointed out that the possible separation of Sudan would have a great deal of impact on the Darfur issue. Ms. Meena Singh Roy noted that the paper can go further than foreseeing a split, and lay out options for possible policies that the Indian government can adopt on energy security. She also suggested that the role of non-state actors in a post-referendum Sudan be explored.

Ambassador Shashank concluded the session by emphasizing that the internal dimension of Sudan (with nine neighboring countries that landlock the country, each holding its own views on the referendum) has to be brought into the paper, even though the focus is on the referendum itself and its impact on India. He also suggested that IDSA can follow up on this presentation with a smaller meeting with members working on this issue in the Indian government.

Report by prepared by Princy Marin George, Research Assistant, IDSA.