Sudan’s ongoing crisis spells economic trouble for its neighbors

Chadian cart owners transport belongings of Sudanese people who fled the conflict in Sudan’s Darfur region, while crossing the border between Sudan and Chad in Adre. Reuters/File
Chadian cart owners transport belongings of Sudanese people who fled the conflict in Sudan’s Darfur region, while crossing the border between Sudan and Chad in Adre. Reuters/File
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Updated 30 October 2023
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Sudan’s ongoing crisis spells economic trouble for its neighbors

Sudan’s ongoing crisis spells economic trouble for its neighbors
  • Call for ‘conflict-sensitive human security approach to humanitarian response’

TUNIS: Sudan, currently mired in a protracted war and economic turmoil, stands at the center of a multifaceted humanitarian crisis that ripples across its neighboring nations.

With Sudan’s economy in decline, the adjoining countries, deeply intertwined with its economic prospects, grapple with the fallout — disrupted trade and skyrocketing inflation. These challenges pose the risk of social upheaval and political instability that extends beyond Sudan’s borders, impacting millions throughout the region.

Armed groups operating in Sudan have also shown a propensity to seize opportunities presented by the chaos. They engage in criminal activities such as arms smuggling, human trafficking, and illicit trade, further destabilizing the region. The unrestricted flow of arms and fighters across borders poses a direct threat to the security of neighboring nations, creating challenges for humanitarian organizations striving to uphold the sacred “do no harm” principle.

Additionally, the aid sector grapples with a glaring gap between the pressing need for assistance and its actual delivery. According to the UN, a staggering 18 million people in Sudan require humanitarian aid, but only 3.5 million have received any assistance thus far. This stark disparity underscores the dire circumstances faced by millions of Sudanese citizens and raises critical questions about the effectiveness of humanitarian efforts in this complex environment.

The destruction of infrastructure in the most heavily affected regions, namely Khartoum, Darfur, and Kordofan, is estimated at $60 billion, equivalent to 10 percent of its total worth, according to Ibrahim El-Badawi, Sudan’s former finance minister and an economics researcher. He predicts a potential 20 percent drop in the gross domestic product for this year.

The former minister emphasizes that if the conflict were to cease, Sudan would require emergency economic support ranging from $5 billion to $10 billion to resuscitate the economy. He warns that the continuation of the war would lead to the further deterioration of the Sudanese economy and the state itself.

Experts highlight that beyond the physical insecurity plaguing the nation, the financial underpinnings of the aid sector are entangled in a web of challenges.

Grace Ndungu, a communications manager at Mercy Corps, a global nongovernmental humanitarian aid organization, underscores this point, stating: “Armed groups operating in the region often seize opportunities presented by Sudan’s chaos.”

These groups’ involvement in criminal activities, coupled with their ability to exploit international and regional financing meant for humanitarian assistance, further complicates the situation. At the same time, disputes over vital resources like water and arable land escalate tensions along the country’s borders.

Historically, Sudan’s violent conflicts have often been rooted in contestation over revenue. The ongoing conflict that erupted in April 2023 follows similar patterns, partially fueled by warring parties’ strategies for self-enrichment, including looting, manipulation of international and regional financing, and smuggling of resources such as gold.

The heart of Sudan’s current conflict lies in its historic domination by Khartoum, where revenue sources were frequently concentrated, leaving economic peripheries, including Darfur and Red Sea State, in dependent relations. This inequitable political economy has fueled grievances against the Khartoum-led rule, leading to violent conflicts.

The country is now compelled to utilize its limited remaining resources to assist an internally displaced population that, when considering those previously displaced by past conflicts, totals nearly 7.1 million people, surpassing any other nation globally. According to UN data, more than 5.25 million out of Sudan’s 49 million citizens have been displaced since the conflict began. Over 1 million have sought refuge in neighboring countries, while more than 4.1 million remain within Sudan, facing mounting financial hardships.

Against this background, Sudan’s cash crisis, coupled with soaring inflation rates, has exacerbated economic challenges for its citizens, limiting access to much-needed cash. Also, Sudanese state and non-state armed groups rely on the established network of profitable business interests to sustain their war chests, as they continue to control key aspects of the country’s financial landscape. The Military Industry Corp., responsible for concealing state control of businesses within a broader web of military-controlled companies, penetrates crucial sectors like manufacturing, gold, agriculture, and livestock production, contributing to Sudan’s complex war economy.

Over time, “the humanitarian aid has also become a resource leveraged by various armed groups and state institutions in Sudan,” Dallia Abdelmoniem, a Sudanese political analyst, told Arab News, as the groups occasionally co-opt humanitarian aid not only for financial benefits but also for legitimacy in the eyes of host populations.

She stresses that these challenges necessitate a conflict-sensitive human security approach to humanitarian response, rooted in cooperation with civic actors to mitigate risks. “Customized cash programming modalities can be a viable solution to navigate the intricacies of Sudan’s financial challenges,” Abdelmoniem said.

Experts say that in this tumultuous landscape of Sudan’s conflict and humanitarian crisis, proactive and sensitive approaches can mitigate risks and ensure that humanitarian assistance reaches those who need it most.

Ndungu advocates for collaboration and due diligence procedures to protect aid from being captured by Sudan’s security arena, thereby ensuring that it remains a lifeline for those in desperate need. “The struggle to ensure the safe transport of aid becomes a Herculean task in the face of political complexities.”

Abdelmoniem added that “as the aid theft has re-emerged as a distressing phenomenon in Sudan, perpetrated by both sides of the conflict and opportunistic looters, in order to navigate the intricacies of Sudan’s financial challenges and uphold humanitarian principles, international humanitarian actors must adopt a conflict-sensitive approach.”

She emphasizes that by focusing on collaboration, accountability, and civic engagement, the humanitarian sector can strive to alleviate suffering and support Sudanese civilians as they navigate the complex aftermath of conflict.

Ndungu echoes her views, proposing establishing forums for collaboration and due diligence procedures to vet financial modalities that can help protect aid from being captured by Sudan’s security arena.

“This approach should involve close collaboration with in-country civic groups and transparency initiatives to ensure that aid does not become a financial or political resource for combatants,” she added, stressing the importance of the role that regional and international actors play in shaping the dynamics of the crisis.


Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting

Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting
Updated 25 September 2024
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Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting

Bailout: Pakistan thanks Saudi Arabia, UAE, China for support ahead of IMF meeting
  • IMF executive board scheduled to meet today to discuss approval of $7 billion loan for Pakistan

ISLAMABAD: Prime Minister Shehbaz Sharif said on Wednesday Pakistan had met the “tough conditions” set by the International Monetary Fund with the help of Saudi Arabia, the UAE and China, as the global lending agency’s board meets today to discuss the $7 billion loan program for the country.

Pakistan reached a staff-level agreement with the IMF in July for a fresh loan to keep its fragile economy afloat. Finance Minister Muhammad Aurangzeb had earlier expressed hope of sealing the deal by the end of August. However, delays were caused by an external financing gap, which prompted Pakistan to seek commitments from key allies and request debt reprofiling.

Just a day earlier, the finance minister again expressed optimism about securing the loan program after the IMF board meeting, while emphasizing the government’s commitment to structural reforms.

“[Today] is the IMF board meeting, and we have fulfilled all of their conditions, very tough conditions, but praise be to God, we have completed them,” he told the media in New York on the sidelines of the 79th United Nations General Assembly Session. “I want to express my heartfelt gratitude once again, to our trusted brother nations, Saudi Arabia, China and the UAE. Without their immense support, this would not have been possible.”

“At the final stage, the conditions were related to China, and just like in the past, the Chinese government once again held Pakistan’s hand and offered immense support,” he added. “I am deeply grateful to the Chinese leadership.”

Pakistan’s last $3 billion IMF program helped avert a sovereign default in 2023 amid a sharp decline in foreign exchange reserves, currency depreciation and record inflation.

The government has already maintained that the country’s macroeconomic indicators have improved, though it needs the 37-month-long IMF program to solidify those gains.

“You have to grow and build from a stable base,” Pakistan’s finance minister said on Tuesday while addressing a high-level private sector dialogue, ‘CPEC-II and the Region.’ “We have reached that level now. Now, we can say that we have a good foundation on which we can build from here.”

“Now we need to move forward and stay with the reform agenda whether it’s on the taxation or energy side [or] on the state-owned enterprises or privatization side,” he added.


Closing Bell: Saudi main index gains 75 points to end at 12,343

Closing Bell: Saudi main index gains 75 points to end at 12,343
Updated 25 September 2024
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Closing Bell: Saudi main index gains 75 points to end at 12,343

Closing Bell: Saudi main index gains 75 points to end at 12,343

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Wednesday, gaining 75.3 points, or 0.61 percent, to close at 12,343.72. 

The total trading turnover of the benchmark index stood at SR7.09 billion ($1.89 billion), with 136 stocks advancing and 83 declining. 

The Kingdom’s parallel market, Nomu, dropped 30.99 points, or 0.12 percent, to close at 25,653.38, as 26 stocks advanced and 33 retreated. 

The MSCI Tadawul Index added 9.85 points, or 0.64 percent, to close at 1,545.63. 

The best-performing stock of the day was Saudi Printing and Packaging Co., which surged 10 percent to close at SR14.52.  

Other top performers included Saudi Industrial Development Co. and Saudi Fisheries Co., whose share prices rose 9.93 percent and 9.9 percent, respectively. 

National Medical Care Co. was the worst performer, with its share price falling 2.47 percent to SR213.60.  

Other underperformers were Gulf Union Alahlia Cooperative Insurance Co. and Saudi Reinsurance Co., which saw their share prices decline by 2.28 percent and 2.17 percent to SR16.26 and SR36, respectively. 

On the parallel market, Al Mohafaza Co. for Education was the top performer, with its share price rising 9.21 percent to SR23. 

Other top performers on Nomu were Armah Sports Co. and Balady Poultry Co., with their share prices increasing 5.33 percent and 4.49 percent, respectively. 

Banan Real Estate Co. was the worst performer on Nomu, dropping 7.8 percent to SR5.44. 

Other notable decliners included Academy of Learning Co. and Leen Alkhair Trading Co., with their shares down 6.73 percent and 4.55 percent, respectively.  

On the announcements front, Saudi AZM for Communication and Information Technology Co. confirmed the award of a new project from the General Entertainment Authority.  

The project aims to provide guidance and support to entrepreneurs and businesses in the entertainment sector, reflecting a strategic push to foster industry growth aligned with Saudi Arabia’s Vision 2030. 

The project’s value exceeds 5 percent of AZM’s total revenues for the 2024 financial year. Its scope includes advisory services to strengthen the capabilities of entertainment sector stakeholders. 

This initiative builds on the existing partnership between AZM and GEA. Previously, AZM collaborated with GEA on a major digital transformation project that modernized the authority’s operational framework. 

Through that collaboration, AZM implemented IT solutions that enhanced GEA’s digital infrastructure, improving efficiency and service delivery. The project involved upgrading critical systems, automating processes, and integrating advanced technologies.


Saudi Arabia to host Global Logistics Forum in October 

Saudi Arabia to host Global Logistics Forum in October 
Updated 25 September 2024
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Saudi Arabia to host Global Logistics Forum in October 

Saudi Arabia to host Global Logistics Forum in October 

RIYADH: Saudi Arabia's transportation and supply chain sector evolution will be a central topic as top leaders discuss innovative strategies and advancements at the Global Logistics Forum in Riyadh. 

The event, set to take place from Oct. 12-14, comes as investment in the sector is surging, with a 76 percent increase in new businesses registered in the second quarter of 2024, making logistics the fastest-growing sphere in the Kingdom. 

Spearheaded by the Ministry of Transport and Logistic Services, the sector is undergoing significant changes to solidify the Kingdom's pivotal role in global trade. This transformation focuses on using advanced technologies to promote sustainability and improve infrastructure and transportation solutions, the Saudi Press Agency reported. 

The forum highlights the Kingdom's initiatives to develop and strengthen logistics centers, improving domestic and international connectivity. 

The three-day event is expected to gather over 100 speakers and participants, including industry leaders and government representatives.

This year's forum will also attract over 10,000 participants from leading global organizations who will address pressing logistics challenges with discussions on sustainability, supply chain resilience, workforce advancement, and technology adoption. 

The agenda includes keynote speeches, dialogue sessions, and bilateral meetings, fostering innovative, sustainable visions for the industry's future.

The event falls in line with Saudi Arabia's strategic location as a trade corridor between Asia, Africa, and Europe and aligns well with the nation's goal to consolidate its position as a global logistics hub under Vision 2030 and the National Transport and Logistics Strategy. 

These initiatives and efforts have propelled Saudi Arabia up 17 positions in the World Bank's Logistics Performance Index.

The Kingdom's port standings have also advanced, with the country climbing to 15th place globally in annual container handling. 

Three Saudi hubs were mentioned in Lloyd's List One Hundred Ports 2024, a testament to the country's growing influence in logistics and support for economic growth.  

The civil aviation sector is equally dynamic, highlighted by the Saudia Group's record-setting purchase of 105 Airbus planes and growing investment opportunities at airports. 

These developments are establishing new standards for global connectivity and infrastructure.  

This momentum marks a new era of leadership and innovation, aligned with national ambitions to redefine global trade and logistics under the ministry's sustainable and technologically progressive leadership.

The Kingdom presents substantial opportunities for global logistics players. With a population of approximately 36 million and a gross domestic product of $1.81 trillion in purchasing power parity as of the end of 2023, Saudi Arabia is a central hub for expansive trade routes supported by world-class infrastructure.  

Another major catalyst for growth is the Kingdom securing the bids for Expo 2030 and the 2034 FIFA World Cup — both of which will attract substantial global business opportunities, opening new channels for trade and commerce.


New customs agreement to boost UAE, US economic ties

New customs agreement to boost UAE, US economic ties
Updated 25 September 2024
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New customs agreement to boost UAE, US economic ties

New customs agreement to boost UAE, US economic ties

RIYADH: The economic partnership between the UAE and the US is poised for significant expansion with the introduction of a new customs cooperation agreement. This initiative aims to reduce customs violations, combat illicit trade, and enhance technical collaboration between the two nations.

The agreement was formalized during UAE President Sheikh Mohamed bin Zayed’s visit to the US, marking a crucial step in streamlining customs operations and strengthening trade relations. Ali Al-Shamsi, chairman of the UAE Federal Authority for Identity, Citizenship, Customs, and Port Security, and Troy Miller, acting commissioner of US Customs and Border Protection, signed the accord.

Al-Shamsi underscored the agreement’s importance, stating it would broaden trade opportunities and facilitate the exchange of customs expertise, alongside enhancing national capabilities through targeted training programs.

He told the Emirates News Agency, WAM: “Bilateral trade between the two nations continues to grow steadily, driven by our deep political and economic ties. This growth brings numerous advantages, particularly in fortifying customs relations and expanding trade scope to navigate challenges that may impede the seamless flow of goods.”

The UAE and the US enjoy a robust economic relationship, with bilateral non-oil trade skyrocketing to $31.4 billion in 2023, up from $23.8 billion the previous year. Notably, US exports to the UAE surged by 19 percent, totaling $24.8 billion. The UAE remains the largest market for US goods in the Middle East, highlighting its vital role as a trade hub.

This burgeoning trade dynamic yields substantial benefits for both economies. US exports to the UAE supported approximately 125,000 jobs across the US in 2023. Meanwhile, the UAE’s exports to the US reached around $6.6 billion, featuring a diverse array of products including aluminum and precious metals, reflecting the complementary nature of their trade.

Al-Shamsi further emphasized that the customs cooperation and mutual assistance agreement underscores the UAE’s pivotal role as a regional gateway for global trade. Its strategic location connects Asia, Europe, and Africa, making it an essential transit hub.

With the US, the world’s largest economy, as a historical partner, the UAE's non-oil trade strategy and investments in sectors like real estate, technology, and manufacturing highlight the mutual interest in nurturing a vibrant trade and investment relationship.


KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  

KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  
Updated 25 September 2024
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KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  

KAUST, Abdul Latif Jameel Motors strike deal with Toyota to advance hydrogen fuel research  

JEDDAH: Saudi Arabia will accelerate hydrogen fuel cell research after two local entities joined with Toyota Motor Corp. to increase decarbonization efforts in the transportation sector and beyond.

King Abdullah University of Science and Technology and Abdul Latif Jameel Motors have embarked on a strategic partnership with the Japanese firm to implement cleaner energy solutions.

At the heart of this initiative, KAUST has acquired proton electrolyte membrane fuel cell modules from Toyota, establishing a cutting-edge laboratory within its Clean Energy and Research Platform.

This facility is poised to play a crucial role in the Kingdom’s hydrogen innovation efforts, particularly in adapting fuel cells to the region’s specific environmental conditions, KAUST said in a statement.

Saudi Arabia aims to deliver around 2.9 million tons of hydrogen by 2030, offering competitive domestic and export costs, and this collaboration aligns with the Kingdom’s commitment to reducing greenhouse gasses and achieving net zero emissions by 2060.  

Mani Sarathy, professor of chemical engineering at KAUST, said they are excited to collaborate with TMC and Abdul Latif Jameel Motors to drive the adoption of hydrogen fuel cell technology in Saudi Arabia.

“Through our Clean Energy Research Platform, we are focused on advancing research that will optimize hydrogen fuel cells for the region’s specific conditions, ensuring their efficiency and reliability,” Sarathy said.

He emphasized that this partnership demonstrates their commitment to pioneering innovations that support sustainable solutions and contribute to a greener future for the Kingdom and beyond.

Sarathy and his CERP team are currently leading research efforts to explore the performance, durability, and environmental integration of PEM fuel cells, supported technically and financially by TMC and Abdul Latif Jameel Motors, the authorized distributor of Toyota vehicles in Saudi Arabia since 1955.

The team is undertaking a series of modeling and experimental studies to evaluate factors such as temperature sensitivity, humidity effects, and overall efficiency, aiming to optimize the environmental advantages of these fuel cells within the Kingdom’s infrastructure, KAUST said in its release.

Mazin Ghazi Jameel, managing director of Toyota marketing operations at ALJ Motors, commented that his company is dedicated to facilitating the development and adoption of solutions that benefit both local and global communities.

“A key focus is promoting fuel cell technology to establish Saudi Arabia as a key contributor to sustainable mobility. This strategic partnership reaffirms our commitment to enabling a future of cleaner, efficient and smarter mobility accessible to all, supporting the transformational needs of businesses and individuals in the Kingdom of Saudi Arabia,” Ghazi said.

Nobuyuki Takemura, chief representative of the Toyota liaison office for mobility and energy in the Kingdom, remarked that for more than two decades, TMC has been a leader in environmentally friendly mobility solutions, showcasing a steadfast commitment to a zero-carbon future through ongoing innovation and significant global investment.

“In partnership with the KAUST research team within CERP and Abdul Latif Jameel Motors, we are bringing this technology to Saudi Arabia, supporting its decarbonization goals. Toyota is dedicated to contributing to the research at KAUST and to advancing the Kingdom’s economic diversification and circular carbon economy, in alignment with Vision 2030,” he said.