The Boom In Khartoum  

The Guardian has a look at the oil induced boom in Sudan, taking a surprisingly pro-government line, much to the annoyance of some commenters. Others point out that the Sudan situation isn't as bad as that in the Congo, but no one seems too concerned about what has been happening there over the past decade (some of my older posts on Sudan can be found here and here).

The conference on Sudan-Europe relations that the VIPs are attending, an attempt to change perceptions of Sudan among Europeans, symbolises an evolving reality - the strengthening confidence of Omar al-Bashir's government about a prosperous national future.

That may sound counter-intuitive. Relatively poor, undeveloped Sudan is under sanctions imposed by the US and followed, somewhat reluctantly, by the EU. The ostensible reason is the continuing war in Darfur. It receives no help from the IMF, to which it must make large debt repayments each year. Influenced by the US, other international institutions and businesses tend to steer clear.

Yet 10 years after the US bombed the country, and three years after the peace agreement that ended the civil war in the south, vibrant Khartoum is beginning to resemble a boom town.

The reason can be spelled out in three letters: oil.

Until 2002, Sudan was obliged to import petrol and other oil products. Now it is exporting about 750,000 barrels per day. That figure is expected to double within the next two years or so.

Plans are afoot to massively expand the country's refining capacity at Port Sudan, enabling it to sell finished products such as gasoline, diesel and kerosene at even greater profit. At present, oil revenues stand at about $7bn a year. That, too, could double in a few short years.

The expansion is coming despite the US sanctions, which were broadened by President George Bush last year to include bans on doing business with 30 companies owned or controlled by the Sudanese government. The principal reason is Chinese investment in the oil industry, thought to be worth in excess of $6bn.

But other Asian countries, notably Malaysia's Petronas oil company, and India are joining the rush to invest, undeterred by American threats. Turkey is also becoming a major partner in construction and infrastructure projects.

Other partners come from the Arab world and Iran. A symbol of their involvement is a new oval-shaped hotel and business centre in Khartoum popularly known as Gadafy's Egg, after the Libyan leader who financed it.

"You can feel how things are changing since the war in the south ended," said Khaled Ahmed, a businessman. "They reckoned the war as costing $2m a day. All that money is being used for infrastructure projects now."

Sudan is not oil-dependent. It is a potentially rich country, about the size of western Europe, with a population of only 39 million, almost unlimited land resources, good water supply, and many mineral deposits (including uranium in Darfur).

But capital from oil sales is proving to be the catalyst for a national economic renaissance that even the US treasury and an over-reaching US Congress cannot stymie.