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Is Sudan on its way to a peaceful breakup?

By Philippe de Pontet and Willis Sparks

Why would President Omar al-Bashir allow the southern third of Sudan to secede, taking 80 percent of the country's oil with it? Maybe he won't. It's far from a done deal. But for the moment, it appears his government might be willing to do just that.

South Sudan is hoping to hold a referendum on January 9 that will almost certainly lead to its independence from the government based in Khartoum. After years of negotiations, North and South remain far apart on issues that must be resolved if a credible vote is to take place, and if an independent South Sudan is to be truly viable. But incentives and pressure from outsiders may help bring this off.

Last week, the State Department formally offered the North some attractive conditions-based carrots. If Khartoum accepts the results of the referendum, Washington will lift restrictions on non-oil trade and investment. And upon fulfillment of the terms of the Comprehensive Peace Agreement that ended the civil war in January 2005 and "resolution" of the Darfur conflict, the US will give al-Bashir's government much of what it says it wants: sanctions removal, normalization of relations, and support for a multilateral plan to reduce Khartoum's astronomical $38 billion debt.

In return, the South will have to share some of its oil wealth with the North, moving gradually over the course of several years from the current 50/50 split to a smaller share for the North that's large enough for Khartoum to accept. The two sides will also have to demarcate the border and resolve the status of the oil-rich province of Abyei -- not easy tasks. On Friday, a U.N. summit on the issue will bring together representatives of North and South with U.N. Secretary-General Ban Ki-Moon, President Barack Obama, and Secretary of State Hillary Clinton.

There are solid grounds for optimism beyond the persuasive powers of the diplomats involved. First, China, one of the few international players with real influence in Khartoum, wants a North-South agreement that averts any risk of a return to civil war, since most of the 480,000 barrels of crude oil that Sudan exports each day are bound for China. That's more than 5 percent of China's imported oil. A North-South conflict in Sudan would cost Khartoum and Beijing dearly.

Second, Washington will lean heavily on the South to compromise on the sharing of oil revenue and the border demarcation process. The South depends on support from the United States and the United Nations for the referendum and its independence. With billions of U.S. aid dollars spent, and billions more to come, it's high time that the United States put real pressure on the South to make necessary compromises, starting with oil revenue-sharing.

Finally, the North is not entirely vulnerable to southern control of oil. The South may hold 80 percent of the reserves, but the existing pipelines run north. The two sides must get along if either is to profit from the oil.

Last week, Hillary Clinton told a Council on Foreign Relations audience that Sudan is "a ticking time bomb of enormous consequence," reminding everyone involved how much work remains to be done-and how easily negotiations could fly off the rails. The United Nations will offer to play a leading role (with the African Union) in preparing the referendum. That's critical since preparation time for such an ambitious vote is running short, in a region almost entirely devoid of infrastructure. Khartoum's response to this proposal will give some indication of its willingness to make compromises of its own, as it has grudgingly done on several occasions since the 2005 peace agreement.

The Obama administration has adopted an ambitious (and risky) strategy. Much of what it has promised Khartoum will depend on "resolution" of the conflict in Darfur, an issue not directly related to the North-South conflict. Khartoum will want clarity on what the word resolution actually means, balking at allowing the South to secede without knowing just how high a bar it must clear to claim the incentives Washington has promised. The United States, European Union, United Nations, and Khartoum's friends in China and Egypt will have to remain actively involved if talks are to remain on track.

In the end, despite hot heads and tough talk on both sides, North and South will probably move toward compromise on oil profits, the border, and Abyei during the six-month transition period between the referendum and the official birth of a new nation (whose name has yet to be determined). A return to civil war would serve neither government. An end to conflict and a stable environment for oil production would profit the two governments' most powerful foreign friends.

If things go wrong, either side could get aggressive. A breakdown in talks before the referendum could push the South to simply declare independence unilaterally -- not an auspicious start to nationhood in one of the world's toughest regions. Alternatively, the North could decide to seize control of the South's largest oil fields. It could also destabilize border regions -- though Khartoum knows well that any attempt to stoke a broader conflict across the South would invite a military response that could trigger a return to war that virtually no one wants.

But for the moment, there are solid grounds for optimism that one Sudan can peacefully become two. And that would be an accomplishment worth celebrating.

Philippe de Pontet is Director of Eurasia Group's Africa practice. Willis Sparks is an analyst in the firm's Global Macro practice.

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