11 January 2011

Southern Sudan: What happens next?

The referendum is finally here. I am overjoyed for the people of Southern Sudan. There is no doubt that there will be a resounding vote for independence. So what happens next?

The short answer – not very much actually changes. The Government of Southern Sudan (GOSS) has been in existence for 5 years now, with responsibility for the majority of core government functions.

There are serious challenges to be faced in terms of building functional capability and increasing accountability, but they are the same challenges which have existed for the past 5 years. Nothing is about to fall apart,  any more than it already has done.

With perhaps one major exception. GOSS has so far not had to deal with monetary policy, and this is a serious concern. Establishing a new currency and managing the risks of inflation for the first time will be extremely difficult. And as Keynes said, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose” (HT:TH).

Another concern is the potential for new borrowing once the South becomes a sovereign nation, which is really not needed when oil prices are so high and spending controls still too loose.

Southern Sudan has some smart leaders who understand many of the challenges. Robert Klitgaard discusses meeting Pagan Amum and Deng Alor in 2005, and the sharp grasp they had of the scourge of corruption and the difficulty in creating accountability. But good policy and good decisions take more than a few good individuals – establishing good systems is difficult and will take time, as will training enough mid- and lower level civil servants to run these systems.

A distinct positive should be an influx of Southern politicians and government officials from Khartoum, who have been serving as part of the Government of National Unity (GoNU). This influx will create some welcome competition for the top jobs (and hopefully not just new Ministries to accommodate them).

And finally one question to which I’m not sure anyone has the answer: what shall we call you country 193?

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