Sudan and South Sudan have suffered economic pain in the last two years – Sudan, due to the loss of the South and its oil in 2011; and the South, due to the shutdown of oil production it began in late January of this year as a protest measure against Khartoum’s demands regarding oil transit fees. The shutdown in the South has, of course, also affected the north, and the economic picture I’m painting here is extremely simplified – more economic information about Sudan is available here and here, and more information about South Sudan is available here.
Economic pain has continued in part because of political conflict. Since South Sudan’s independence, the two countries have disputed issues including border demarcation, security, and oil revenue sharing. In August of this year, Sudan and South Sudan came to a tentative agreement on oil, and signed a deal covering oil and border security on September 26. Yet security issues remained unresolved, and the South did not restart its oil production on November 15 as it had planned.
On December 1, Pagan Amum, the South’s chief negotiator, met with Sudanese officials in Khartoum. The meeting had two important outcomes. First, the South Sudanese now plan to resume oil exports through Sudan within a few weeks (although returning production to pre-shutdown levels could take up to one year). Second, the two sides have agreed to stop supporting rebel movements within each other’s territory; the north is particularly concerned about the Sudan People’s Liberation Movement North or SPLM-N, who have fought government forces in the Sudanese states of South Kordofan and Blue Nile, along the new border between Sudan and South Sudan. AFP has more on the new agreement and the background to it.
The success of these agreements, of course, will depend on their implementation. Meanwhile, other contentious issues remain, including determining when and whether the territory of Abyei will hold a referendum about joining the South or the north.