Date: 02/27/2008
Our organizations look at U.S. foreign policy issues through decidedly different lenses. The Sudan Divestment Task Force promotes targeted Sudan divestment campaigns throughout the United States and Europe. The National Foreign Trade Council is a U.S. business group, which opposes unilateral sanctions and successfully sued the state of Illinois over its broad Sudan divestment measure in 2007.
Despite our differences, we share the belief that nuance serves U.S. values and foreign policy objectives far better than blunt economic instruments. Regrettably, at times it is overlooked in a rush to action on an emotional issue like Darfur.
In a move that demonstrates a nuanced approach to foreign policy, the U.S. Treasury Department has begun to rely increasingly on narrower sanctions that are targeted at specific individuals and behavior.
While broad sanctions still apply to much of Sudan, stemming from a series of executive orders and legislative initiatives, U.S. policy has incorporated carve-outs for the Government of Southern Sudan in support of the 2005 Comprehensive Peace Agreement. More recently, with the support of the U.S. government, the Bank of Juba in Southern Sudan received its own international banking code, known as a SWIFT code, needed for international wire transfers.
As a result, American and foreign investors can effectively do business in Southern Sudan without having to go through Khartoum.
The region's lack of infrastructure is an opportunity for investors and donors across a variety of sectors, from banking to agriculture to construction and telecommunications. Recently, the Japan International Cooperation Agency, which coordinates development assistance for Japan, said it has received security clearance to provide substantial development assistance to Southern Sudan. And Ken Ohashi, Sudan country director for the World Bank, reported that the bank has, "built up a significant team of experts in [Southern Sudan's capitol] that provides much needed hands-on assistance, and total disbursement from the Multi-Donor Trust Fund has increased from a mere $14 million about a year ago to nearly $100 million now."
While much of Southern Sudan's development is likely to be undertaken by local companies and individuals, the blessing of the U.S. government provides important encouragement for foreign ventures. The carve-outs in U.S. regulations also create opportunities for American companies and donors to contribute to rebuilding Southern Sudan and to help the regional government shape a long-term, post-conflict approach to foreign investment.
Furthermore, with Darfur increasingly on the brink, foreign investment in Southern Sudan may be a critical component to stabilizing Darfur, Sudan and the entire region.
In Darfur, attacks against civilians are increasing. Across the border, Chad is facing a growing flood of refugees from Darfur as well as growing conflicts with rebels funded by the central Sudanese government. If the peace between the North and South breaks down, things can only get worse for Darfur. As former diplomats to the region Roger Winter and John Prendergast have suggested, if the agreement falls apart, "there will be no chance for peace in Darfur, and if Darfur continues to deteriorate, the likelihood increases dramatically of a return to what was--for 20 years--a far more destructive war in the South."
Trade and investment alone will not save the peace agreement and will not save Darfur. Investment does not eliminate the need for the international community to take a greater role in bringing stability to Darfur. The United States must do its part, beginning with helping to fully support and equip the joint United Nations-African Union peacekeeping force in Darfur.
Still, foreign investors can play a critical role by supporting development in the South.
The U.S. should be commended for taking an increasingly nuanced approach to sanctions policy and supporting the return of trade and investment to the South. This approach, combined with the government of South Sudan's eagerness to work with the international financial community, represents a unique opportunity for investors to do well by doing good.
