President Bush’s decision Tuesday to exert more pressure on oil-rich Sudan by imposing new sanctions to squeeze the country’s economy may have limited impact, business experts say.
Administration officials described the sanctions as a significant move to pressure Sudan’s president Omar Hassan al-Bashir to bring an end to the violence in the war-torn region of Darfur, where more than 200,000 people have been killed and about 2.5 million displaced since fighting erupted in 2003.
But analysts say freezing Sudanese companies out of American financial institutions and curtailing their dollar transactions may not have the needed impacts Bush hopes for as many of the people and businesses targeted are already getting around existing sanctions, which date back to 1997. “Sudan has been quite adept at avoiding sanctions for the past decade, and this is not going to have a lot of bite,” Philippe de Pontet, a political risk analyst at the Eurasia Group in Washington, told the Times Daily.
Moreover, the latest sanctions will have little impact on Sudan’s oil output; the main source of the country’s wealth, analysts say.
Sudan has emerged in recent years as a fast-growing oil producer, first with the help of U.S. and European corporations and more recently with investments from Chinese, Indian and Malaysian firms. Now, Sudan pumps more than 500,000 barrels of oil a day, bringing in enough wealth to trigger an economic and real estate boom in the capital, Khartoum.
The new U.S. sanctions, which Khartoum denounced as “unfair and untimely”, are specifically aimed at 31 companies owned or controlled by the Sudanese government. They include five petrochemical companies and the country’s national telecommunications operator, Sudatel. The United States also singled out three top Sudanese officials; Ahmad Haroun, state minister for humanitarian affairs, and Awad ibn Auf, the country’s director of military intelligence and Khalil Ibrahim, leader of a rebel group called the Justice and Equality Movement.
In addition to the sanctions, the Bush administration said it would seek a new United Nations resolution imposing an arms embargo against Khartoum and would ban the Sudanese government from carrying out any military flights in Darfur.
Reacting to the U.S. sanctions, South Africa’s ambassador to the United Nations, Dumisani S. Kumalo, rejected their timing as they come as the United Nations, the African Union and Sudan are negotiating access to Darfur for an increased international force.
Sudan's ambassador to the UN, Abdalmahmood Abdalhaleem, also said that the new sanctions ignored recent progress. "Sanctions have never solved a problem," he said, according to the Seattle Times. Abdalhaleem also said that he knew the three sanctioned men and they had no foreign bank accounts. "I can assure you, all of them have no assets to freeze," he said. "The sanctions are just a symbolic act."
All the Sudanese firms blacklisted by the U.S. Treasury Department will be added to a list of 100 other local companies that have already been barred from the U.S. financial system, a move that effectively freezes any money they have in American banks and blocks transfers of funds through U.S. institutions.
However, Andrew S. Natsios, the special envoy for Sudan, acknowledged yesterday at a news conference that the new sanctions would have limited impacts on the country’s oil production and exports. “The purpose of these sanctions is not sanctions... The purpose of these sanctions is to send a message to the Sudanese government to start behaving differently when they deal with their own people,” he said.
The European Union has expressed its willingness to consider new sanctions against Khartoum, a move strongly imposed by Russia and China. Without an international consensus on stricter economic sanctions, the U.S. has few options, analysts say. “We don’t have much commercial activities or fat targets of opportunities for slapping new sanctions on Sudan,” said J. Stephen Morrison, director of the Africa program at the Center for International and Strategic Studies in Washington.
Despite the new sanctions, Washington cannot hit Sudan’s economy hard. Bush largely targeted small companies engaged in oil, minerals and agricultural business. Administration officials said putting sanctions on the larger firms would be "extreme".
Analysts say the U.S. wants to increase the pressure on the Sudanese government without alienating one of its closest trade partners; China, which buys two-thirds of Sudan's oil and is the largest foreign investor in the country's oil industry.
In fact, the Bush administration's list of targeted firms didn’t include the China National Petroleum, which operates in Sudan. Likewise, Sudan's government-dominated Gum Arabic wasn’t subjected to sanctions. The company is one of the world's largest exporters of a sticky tree resin used in hundreds of consumer products, including soft drinks and makeup. It was exempted from previous U.S. sanctions after American manufacturers said they needed Gum Arabic to make their products.
Washington is also apparently unwilling to consider outright oil sanctions against Sudan at a time when global energy prices are already high. “The U.S. does not want to alienate China and it doesn’t want to take steps that take oil off the market, especially in the current environment,” said Mr. de Pontet of the Eurasia Group.
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