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.
South Sudan’s government has made commitments to ensure transparency and accountability, fight corruption, and help the productive sectors of the economy, Mr. Shah said.
“If they are able to live up to their commitments, we are optimistic that they can be successful over time,” he added.
Last week, the U.S. Treasury Department eased sanctions on Sudan that had restricted investments in South Sudan’s oil sector, which is inexorably linked to the north.
Jonathan Temin, director of the Sudan program at the U.S. Institute of Peace, said many in the international community are “withholding judgment and waiting to see how South Sudan responds to instability and what kind of development vision it presents.”
He added that the violence is mostly limited to certain parts of the country and that most of South Sudan is stable.
At the conference in Washington, Mr. Mayardit will outline his vision for development in his country and lay out plans for infrastructure, food security, governance and efforts to combat rampant corruption.
Officials from Britain, Norway, Turkey, the European Union, the United Nations, the African Union, the World Bank, the International Finance Corp., the Corporate Council on Africa, and InterAction also will participate.
South Sudan’s Ambassador to the U.S., Ezekiel Lol Gatkuoth, said his country desperately needs help from the international community.
“Nothing has been built in South Sudan since creation. Now, we want to enter into a war for development and we want the world to help us,” he said.