Sudan: Unity Fund Chair on Sanctions Trip, Electoral

C O N F I D E N T I A L SECTION 01 OF 03 KHARTOUM 000079

SIPDIS
NSC FOR MGAVIN, LETIM
DEPT PASS USAID FOR AFR/SUDAN
ADDIS ABABA ALSO FOR USAU

E.O. 12958: DECL: 2020/01/28
TAGS: PGOV PREL ECON EAGR EFIN EAID SU
SUBJECT: Sudan: Unity Fund Chair on Sanctions Trip, Electoral
Politics, Development

CLASSIFIED BY: Robert E. Whitehead, Charge d'Affaires; REASON:
1.4(B),(D)


1. (SBU) Summary: Charge met January 27 with General Yahia Hussein
Babiker, erstwhile Deputy Director of the National Intelligence
Service of Sudan and current Secretary General of the Unity Support
Fund. Babiker, who joined a delegation to the United States to
discuss the ins and outs of the U.S. sanctions regime, spoke
briefly about his visit before launching into wide-ranging
discussion about another potential political crisis brewing between
the National Congress Party (NCP) and the Sudanese People's
Liberation Movement (SPLM),commenting on electoral politics,
citing development efforts in the South and the East, and noting
that the Government of Sudan (GOS) was interested in exploring the
purchase of agricultural commodities from the United States to
compensate for a grain shortage in Sudan. The discussions were
interesting, although we have received conflicting reports on
political developments from senior SPLM officials. End Summary



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A Better Understanding of Sanction Dos and Don'ts

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2. (SBU) Babiker opened with an upbeat assessment of his January
visit to Washington; he said that the visit had afforded the GOS a
clearer understanding of U.S. sanctions that have had a significant
impact on Sudan's economy, especially in the oil sector. Babiker
said that he recognizes that sanctions are unlikely to be lifted in
the short term; nonetheless, based on the information gained during
the visit, the Government of Sudan (GOS) realized that it would be
able to work with certain U.S. companies to obtain Office of
Foreign Assets Control (OFAC) licenses for certain medical and
perhaps agricultural purchases without violating sanctions.
Babiker told Charge that he hopes that U.S. agricultural companies
will eventually be able to visit Khartoum. "We need to start
somewhere," he concluded.



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"No Thanks" from NCP to Post Referendum Mediation Assistance

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3. (C) To Charge's query on how the NCP had reacted to the AU High
Level Panel work plan on post-referendum issues, Babiker told
Charge that the parties prefer to negotiate directly between
themselves without the assistance of an outside mediator. He said
that they would request outside expertise from donors as needed.
He was lukewarm on an expanded role for the Assessment and
Evaluation Commission (AEC),and Babiker responded that there might
be a continuing advisory role of some sort. According to Babiker,
the NCP's Saeed El Khateeb would meet with the SPLM's Luka Biong
again on January 28 to discuss the 2011 referendum and post 2011
planning. Babiker said that GOS Vice President Ali Osman Taha and
Government of Southern Sudan (GOSS) Vice President Reik Machar are
still examining ways to resolve the census issue. In order for
post 2011 negotiations to succeed, the Charge responded, both sides
must reach consensus on how to handle the post-referendum issues if
there is to be sufficient political will to succeed.



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SPLM and NCP Tangoing Toward Elections

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4. (C) Babiker downplayed rumors of another potential crisis
between the two parties and claimed that relationship between the

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NCP and SPLM was actually "warming." He said that GOS Second Vice
President Taha had called GOSS President Salva Kiir Mayardit to
talk about a number of elections-related issues and informed Kiir
that the NCP will not put up a presidential candidate to contest
elections in the South. Babiker said that, off the record, he
viewed the nominations of Yassir Arman by the SPLM and Sadiq Al
Mahdi by the Umma Party as unlikely to present a serious challenge
of President Bashir. He speculated that Arman's nomination might
even be a negotiating ploy to wring concessions out of the NCP that
would lead to Arman's withdrawal and some sort of electoral
alliance. He noted that both the Umma and Umma-Renewal candidates
continued to ramp up their campaigns while declaring the
environment was not conducive to free and fair elections and
hinting as possible boycott. He thought that they too might be
looking for side deals.



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Unity Fund Projects in South Total 300 Million

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5. (U) Babiker described the work of the Unity Fund that the GOS
established in 2008 to fulfill the 2005 CPA mandate to make unity
attractive. To date the Fund has constructed 31 schools throughout
the boundary states where North meets South, established water
projects, and addressed infant mortality and maternal health.
Babiker said that the Fund's portfolio for 2009-2010 totals some
300 million US dollars.



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Promoting Greater Development in East

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6. (U) Babiker cited ongoing discussions about the need for a
closer focus on development in Sudan's Eastern states, especially
Red Sea State. He said that he hoped the US would be represented
at the February donor's conference in Kuwait that will seek to
mobilize development resources for Eastern Sudan, which suffers the
highest rates of malnutrition in Sudan but also has the country's
largest gold mine, main port and major oil pipeline. Charge
replied that while the bulk of U.S. development and humanitarian
assistance is currently channeled to Darfur and the South, the
United States is cognizant of and would like to response as able to
needs in the East.



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Interested in Amber Waves of Grain?

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7. (SBU) Babiker took note of the failed rains throughout much of
Sudan last year and said that the GOS would be obliged to import a
significant quantity of grain, mostly soy and maize, in coming
months. There was interest in undertaking procurements on U.S.
markets is this can be brokered, and the price is competitive.
Charge encouraged Babiker to consider this option and offered to
bring the possibility to USG attention.



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Comment

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8. (C) We felt that Babiker was straightforward on most topics,
but was disingenuous about the current political climate. Always
the outrider for the SPLM, Pagan Amum has since claimed to Charge
that the NCP has suspended talks with the SPLM over unresolved
border demarcation and census/parliamentary issues and said the
SPLM was prepared to boycott national parliamentary elections
throughout the South and run candidates only in the North (septel).
He admitted that the issue remained under discussion in Juba, and
Luka Biong, who is still meeting with the NCP, hinted that Salva
Kiir might come to Khartoum as early as January 28 to meet with
Bashir.




9. (SBU) Embassy Khartoum does not know how various existing
commercial sanctions might affect a GOS request to purchase food
commodities in order to palliate the food shortages that confront
Sudan and which have already become a preoccupation of the donor
community in both Darfur and the South, but we would favor that
this possibility be seriously entertained on humanitarian grounds.
WHITEHEAD