The peace dividend may be spent, but South Sudan can still achieve prosperity

Saturday July 6 2013

By Bella Bird and Paolo Zacchia

As the world’s youngest nation celebrates its third Independence Day on July 9, 2013, the people of South Sudan will rejoice in their freedom and, with it, the longed for peace dividend, which has delivered some tangible results.

Conditions have dramatically improved since the misery of the war years as the country has managed to avoid a return to large-scale conflict.

South Sudan has received a substantial outpouring of international aid (estimated at around $1 billion per year) in addition to a large share of its own oil revenues.

This has enabled a gradual move from humanitarian and emergency services to more development-oriented investments in health, education and infrastructure, besides building the core of a functioning government at the centre and in the 10 states.

Perhaps the most important peace dividend is the sanctity of human life. A child born in South Sudan today has a 48 per cent better chance of survival than during the war years. True, this is still well below the international average but every child who survives in such a difficult environment is a success story.

That same child now has a vastly improved chance of attending a primary school — up from below 10 per cent to 40 per cent in the space of three short years from 2006 to 2008.

It is also more likely, if the school is in a state capital or city, that it is a proper building with electricity, water and furniture rather than a rock under a shady tree where the few qualified teachers taught.

In a country where 85 per cent of adult women have no schooling, it is also heartening to see the portents of generational change as the number of girls in primary school goes up to 37 per cent — although this percentage falls considerably in high school and only 5 per cent of South Sudanese women have graduated.

Investing in education is therefore vital.

Hurting economies

The closing of the borders with Sudan in 2011 and the suspension in the trading of oil in January 2012 hurt both economies with negative impacts on the population in both countries. With oil accounting for 65 per cent of its GDP, South Sudan suffered a measurable setback.

According to one study by the World Bank, prices of a basic staple like sorghum rose between 20 and 46 per cent in border areas, and millet rose 33 per cent on average, plunging almost half a million additional people into poverty.

Going forward, South Sudan will have to maintain peace and stability as a priority, but the peace dividend cannot be reaped twice, and the socio-economic deficits of the country remain huge.

For instance, while doubling the school enrolment to 40 per cent was achieved with comparatively modest investment in the years up to 2009, getting the next 40 per cent into classrooms and guaranteeing a quality education will require a much larger investment in schools and colleges, teachers training, and provision of educational books and materials.

With very low levels of education and infrastructure, the nation’s oil resources are its best chance to promote sustainable devolvement, if they are invested equitably to build human capital, productive physical infrastructure and an enabling investment climate.

Two years after Independence, South Sudan must make the difficult choices needed to redistribute benefits to the broader citizenry.

As the oil flow resumes, the world is watching to see if the nation will draw on the formidable determination and sense of purpose that sustained it through the long liberation struggle to establish the foundations of strong institutions that will deliver the next development dividend.

South Sudan will also have to address the scourge of rampant corruption, by quickly building a credible and independent anti-corruption system, and ensuring that all allegations are objectively investigated with the utmost respect for the rule of law.

Building good institutions for managing South Sudan oil’s wealth is critical because its reserves are finite and estimated to decline sharply by 2035.

In fact, South Sudan is the most oil-income dependent country in the world and must urgently harness other sources of revenue for development to remain on track. The solution involves a rise in agricultural and livestock productivity where some 85 per cent of youth are employed, mostly in unpaid jobs.

With proper management of its abundant natural resources and the development of its human capacity, and if peace building and nation building go hand in hand, don’t be surprised to see South Sudan become not only one of the fastest growing economies in Africa, but one that is able to share prosperity widely across its population.

Bella Bird is World Bank country director for South Sudan, Sudan and Somalia and Paolo Zacchia is the Bank’s lead economist for these countries