Figure 1: Managing the Unmanageable: the 1990s
How did the Government of Sudan survive the 1990s, when its spending was less than US$1 billion per year—sometimes much less? This chart sketches how it functioned.
In the center is the official government budget, which, under Finance Minister Abdel Rahim Hamdi, was run on a cash basis: no borrowing. What was available in cash that month, was spent, on essential government items such as salaries. By those means, Hamdi brought down government spending to less than 10% of GDP and eliminated deficits.
On the left is the Islamist channel. It is notable that the second most powerful member of the Islamist movement, Ali Osman Taha, was made Minister of Social Planning—not normally a senior government position. He Islamized the social spending of the government, using parallel channels.
On the right is the military channel. During the 1990s, Sudan’s “military-commercial complex” expanded to include military industries, financed by international Islamist monies. These helped pay for the war.
President Omar al Bashir and Sheikh Hassan al Turabi each tried to manage this complex system.
This all changed with the export of oil in 1999 and the tenfold increase in spending that followed.
Figure 2: Centralized finance during the oil era
This is the “rentier political marketplace,” in which the ruler possesses the resources and the intermediate elites bargain for a share of them… and in the case of southern Sudan, seized direct access to the rents through gaining independence.
Although Bashir and his circle—having removed Turabi just in time—had centralized control over the oil rents, the demands from various constituents were so great that political spending massively increased. See the previous posts on public spending in the CPA period and defense spending.
Figure 3: After oil: The double bargain
After the end of the oil rents, it has become much more complex… and much more like the 1990s. President Bashir has to bargain both with those making demands on his resources (the Islamists, the Ministry of Defense, and armed rebels) but also with financiers (Qatar, Saudi Arabia, military industries, the government’s financial institutions).
This is not an auspicious context in which to make peace…
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