As conditions for ordinary South Sudanese people continue to deteriorate, government mismanagement is combining with economic and political crises to create a “toxic situation,” according to a newly released Enough Project brief. The brief, Addressing South Sudan’s Economic and Fiscal Crisis, calls for action by the international community, and also for commitment by the warring parties to put the needs of the people ahead of their own.
“South Sudan’s economic and political crises are exacerbating each other, and the population is paying dearly. These interlocking crises and the gross mismanagement of resources by the government have undermined prospects for international support. However, living conditions are deteriorating dramatically. Internationally provided expert technical assistance and oversight at this critical time could potentially stabilize and ease the worst fallout from South Sudan’s poorly managed fiscal and monetary policies. The kind of international pressure exerted on the warring parties in support of the signing of the August 2015 peace accord is again needed at this critical stage to fight mass corruption and adopt responsible economic policies.”
–John Prendergast, Founding Director of the Enough Project
Key excerpts and recommendations from the report:
- On December 14, 2015, South Sudan’s finance minister announced a major shift in the country’s money supply policy that has brought in some revenue (in the form of local currency) for the cash-strapped government but created severe hardships for most people that have not been mitigated. The policy change seemed to strike a heavy blow initially for some currency speculators but at the same time it created an inflation rate of 110 percent and intolerable conditions for ordinary South Sudanese people—notably consumers of food, fuel, and medical supplies and those with no income or low fixed incomes, including a large number of public servants and people in the military and security sectors. In the last several weeks, economic conditions have worsened, creating the potential for unrest in the population and in the state security forces as well as national bankruptcy.
- Strong, concerted diplomatic engagement by international partners, and expert technical assistance and oversight at this critical time, could begin to stabilize and ease the worst fallout from South Sudan’s poorly managed fiscal and monetary policies. Such urgently-needed economic support, however, is directly tied to progress by South Sudanese leaders in implementing the terms of the peace agreement signed in August 2015… Those paying the highest price for a stalled peace process and international support are the average South Sudanese citizens and consumers. The South Sudanese government and the international community cannot afford to look away as living conditions deteriorate dramatically.
- A diplomatic surge by international leaders and donors, supported and led by the United States, can increase the pressure on South Sudanese parties to reach a compromise. The strong international and regional pressure exerted when the August 2015 peace agreement was signed is needed now at this critical stage.
- To mitigate the shocks of devaluing the currency, food items and essential medicines entering South Sudan should be subsidized in the immediate term. Wage increases announced by the government are by themselves not sufficient as they mainly benefit those who have paid jobs. The vast majority of the South Sudanese population is unemployed and cannot afford the current high food prices, hence the necessity to subsidize food items.
- The government’s spending is skewed in favor of security even in the face of the current urgent humanitarian crisis and growing concerns of potential widespread famine. Going forward, there is a need for South Sudanese policymakers to adjust the national budget and provide the necessary subsidies to ensure that the food crisis does not threaten the whole population.
- A languishing peace process beset by delays, setbacks, and impasses by the warring parties, combined with rapidly deteriorating economic and humanitarian conditions for the South Sudanese public caused in part by ill-advised monetary policies, have collectively created a toxic situation that cannot last. International help is available but it requires a commitment by both the international community and also by the South Sudanese warring parties—who must make difficult concessions, genuinely commit themselves to peace, and put the needs of the people ahead of their own.