- The Washington Times - Tuesday, December 13, 2011

An escalation of violence with Sudan is challenging South Sudan’s fledling government to attract desperately needed foreign investment.

South Sudanese President Salva Kiir Mayardit arrived in Washington this week for a two-day conference aimed at wooing international investors.

Secretary of State Hillary Rodham Clinton and Raj Shah, administrator of the U.S. Agency for International Development, also will speak at the conference, which opens Wednesday.

Earlier this month, fighting between forces from the north and south broke out in Jau in South Sudan, and South Sudanese Foreign Minister Nhial Deng Nhial warned that his country is on the brink of an all-out war with Sudan.

“I think that this is a dangerous situation and is poisoning the relationship right now between [Sudan and South Sudan], but I don’t see either side really moving toward full-scale war,” said Princeton Lyman, the U.S. special envoy to Sudan.

Mr. Lyman said if the situation worsens, it could kill confidence in investors seeking stability.

U.S. officials have urged both sides to exercise restraint. South Sudanese officials also have been told to stop aiding rebels in the south of Sudan.

Cameron Hudson, a former State Department and White House official who worked on Sudan policy, said South Sudan’s government appears intent on backing the rebels to destabilize the north.

“A robust development agenda and fomenting instability are not compatible,” he said.

Fighting by rebels in some states of South Sudan has forced farmers to flee, creating a challenge for steady engagement and development.

Mr. Shah, the USAID administrator, expressed concern about the conflict.

“The situation is a step in the wrong direction” because it reduces the ability of the economy to grow, destroys capital and creates a humanitarian crisis by displacing populations, he said.

Current and former officials say the current investment climate will likely attract only those who are looking to make big profits but are uninterested in long-term development in South Sudan.

“As you have a specter of war hanging over South Sudan, it dissuades a lot of conservative investment and people who would bring in the kind of Western business sense that we would like to see in there,” Mr. Hudson said.

Mr. Shah said the international community’s goals are to lower the risks of doing business in South Sudan, create a business-friendly climate and encourage more private investment.

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