SPLM POLITBURO FOCUSED ON ECONOMIC CRISIS; HOPES THAT

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TAGS: PGOV PREL KDEM SOCI ECON ASEC AU KPKO UNSC SU
SUBJECT: SPLM POLITBURO FOCUSED ON ECONOMIC CRISIS; HOPES THAT
OTHERS CAN HELP OUT


1. (SBU) Summary: Government of National Unity (GNU) Presidential
Advisor Dr. Mansour Khalid (a prominent SPLM northerner) said that
the southern Sudan economic crisis was the hot topic at the SPLM's
April Political Bureau (PB) Meeting. He noted that an SPLM team is
working with the World Bank on a plan for Government of Southern
Sudan (GoSS) civil service reform and admitted that corruption and
mismanagement are major problems that the GoSS must address. Dr.
Khalid said that the GoSS has reached out to other nations, such as
Qatar and the United Arab Emirates (UAE),for loans during the
South's economic crunch, but lamented that the UAE and other nations
cannot provide the GoSS with budgetary support. Khalid said that
while NGO polling in southern Sudan seems to overwhelming indicate
that Southerners will vote for separation in 2011, leaders and some
communities in Upper Nile, Bahr El Ghazal and Unity State are
actually committed to unity. With only 20 months until the southern
Sudan Referendum, he acknowledged that it would be very difficult to
change the minds of a majority of Southerners to vote for unity over
separation. End Summary.


2. (SBU) On April 23, CDA Fernandez met with GNU Presidential
Advisor Dr. Mansour Khalid (SPLM). Khalid had just returned from
Doha, Qatar, where he was following up on the recent GNU and rebel
negotiations on Darfur as well as looking for funding for the
Government of South Sudan (GOSS). He described a chronic problem of
the National Congress Party (NCP) as wanting to do "everything
alone"; "they don't have the decency of informing their partner [the
SPLM]" of their plans, noting that they had informed the SPLM only a
short while before departure in February to negotiate with JEM. He
also cited the NCP's recent solo diplomatic trips to France and
Uganda as prime examples of their stubborn behavior to involve the
SPLM on foreign policy. "We don't trust this regime, but we have to
deal with them; this is life," said Khalid.


3. (SBU) Switching gears, Dr. Khalid told CDA Fernandez that
southern Sudan economic crisis dominated the agenda during the
recent SPLM Political Bureau meeting in Juba that took place in
mid-April. Mismanagement and corruption are big problems in the
South, and the Government of Southern Sudan (GoSS) must train people
to correctly use resources and select the right people for the right
jobs, he said. All too often people are hired based on tribalism,
noting the example of the GOSS Finance Minister. "We can't go on
this way," said Khalid. The GNU Presidential Advisor explained that
he has a team working with the World Bank on a plan to the
streamline GoSS civil service. "This is not going to be an easy
task" because it means cutting GoSS staff and eliminating
eliminating "ghost employees" previously funded by the Khartoum
occupation government before 2005 ad Eliminaving p(e doubleQ
s`la2ies rome ot`erwxaa!Bev"Re`5mvah'$ xi beMas{a%Q"!InPc'lkQim^$QpdQKtOQoSiQoSsqQyd,tl eQ|gmqlY'QjQqeQokQy"}BY,{wnwQQoJh+jkSc=AmWQpO Qp -RoQakU'Qt$OQc&Sdck'sR!r]Jq7{Qk?PxQnoted that one-third of Sudan's annual income is used to buy weapons
from Belarus. "The NCP is not spending its money on anything
useful," Khalid lamented.


4. (SBU) In the aftermath of President Obama's win in the United
States, "our people [of southern Sudan] are dreaming" of things like
direct budget support from the US, explained Khalid. CDA countered
that direct financial transfers of the sort Dr. Khalid was talking
about are very rare in the best of times, but even more so now with
the global financial crisis. Khalid said that the GoSS Minister of
Education noted during the SPLM PB Meeting that Norway and another
Scandinavian country, possibly Sweden, have volunteered to pay
salaries for GoSS Ministry of Education staff for 2009. Khalid said
that he himself has been discussing the ability of the GoSS to
obtain loans from the United Arab Emirates (UAE). "The UAE tells me
there is no money for budgetary support," but that there is money
for things like schools, roads, and other development projects.
Khalid explained that Abu Dhabi is "owes" the GoSS because of past
petroleum-related business deals the southern Sudanese made with
TOTAL Petroleum taking over Marathon Oil. "We transferred the
business of a former U.S. company to Abu Dhabi instead of China, so
they should give us something," he said. According to estimates, we
don't expect oil prices to rise until mid-2010 at the very earliest,
said Khalid. "This is a period during which we need and want to
make unity attractive, but we don't have money to do so," he
lamented.


5. (SBU) CDA Fernandez asked Khalid if the SPLM leaders that
believed in unity could persuade the people of southern Sudan to
vote that way. It's a "touchy situation" because people in the
South seem to want separation, but the intensity of tribal feuds has

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dramatically increased with the number of weapons in the South, he
said. Khalid said he has seen the National Democratic Institute's
polling of southerners on the unity versus separation question,
where the result is overwhelmingly (over 95 percent) in support of
separation. "I think in Equatoria, there is a trend towards
separation" said Khalid, because the southernmost states of Sudan
view themselves as extensions of Kenya and Uganda and at the
grassroots level, have very close relationships with the neighboring
countries. "I doubt, however, that is the case in Upper Nile, Bahr
El Ghazal, and Unity State." The governors and leaders in these
states are more committed to unity, he said. Khalid continued, "the
NCP keeps asking us what we are doing to encourage unity, but we ask
them the same," he said.


6. (SBU) Comment: The SPLM and the GoSS have correctly identified
their most urgent internal issue - resolving the South's immediate
economic crisis - there is little indication that they are doing
enough in the way of structural readjustment to correct it. Rather,
they are still unrealistically reaching out to other nations (and in
particular the US),hoping that they can secure enough external
funding to get through the current spell of low oil prices and high
expenses to get them through. The USG should continue to encourage
the GOSS to look for ways to cut back spending, to include careful
salary cuts, rather than driving itself deeply into debt and racking
up salary arrears, which could lead to an erosion in confidence in
the GOSS and provoke even greater instability in an already volatile
South Sudan. At the same time, Khartoum needs to be warned not to
sow the seeds of further instability in an already fragile South.
End Comment.

FERNANDEZ