Sudan just shrugs off sanctions

Ten years after the U.S. imposed an economic boycott against what is territorially Africa’s largest country, it’s hard to see much effect on the streets of Khartoum, the capital. Unlike the case of Iraq, which was crippled by United Nations sanctions in the 1990s, Sudan has blossomed economically since the sanctions were put in place in 1997 because of its alleged support of terrorism and attacks against southern rebels.

But by most measures, Sudan’s economy is booming, expected to grow 13% this year, far faster than those of most other African nations. Oil exports are generating more than $4 billion a year, and heavy investment by China and other Asian nations has allowed the country to escape crippling economic pain.
For the most part, large U.S. firms have steered clear of Sudan, including Chevron Corp., which helped discover Sudan’s oil but left the country before being able to profit from it.

Investors from China, Malaysia and India have rushed to fill the gap, offering financing, technology and construction services.

Sudan’s rising oil production lured public and private investors from China, but now the Asian nation is finding Sudan to be a thriving outlet for Chinese goods, from soccer shirts to coffee tables. Economists estimate that for every dollar China pays for Sudanese oil, it earns back 50 cents through sales of products and services.

Economist Abda Yahia El Mahdi, a former government finance minister who runs an economic consulting firm, worried that Sudan was spending too much money on luxury projects in Khartoum, and not enough on developing schools, roads, water systems and hospitals in other parts of the country.

“We’re heading directly into the oil curse,” she said. “We’re spending and becoming a consumer economy. All of the boom is focused in one area. There’s no public investment plan to see the country into a new era.

“What are we going to do when oil prices drop?”

LA Times