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South Sudanese officials accuse the north of amassing troops near the border and bombarding territories in the south, but they insist that the likelihood of an all-out war is remote.

“We really want to avoid any conflict by all means, but we are ready to defend ourselves if it comes to it,” said South Sudanese Vice President Riek Machar.

“The north has its own problems. It is fighting wars on three fronts,” he added in a phone interview. “I don’t think they can afford the opening of a fourth front.”

Sudanese troops are battling militants in Darfur and rebels in the southern border states of Blue Nile and Southern Kordofan.

Austerity measures

The loss of oil revenue has forced South Sudan to announce austerity measures. The government has also dipped into its foreign reserves, but refuses to disclose how much money is in those reserves.

“We can continue like this for 18 months,” said Mr. Machar.

Deng Deng Nhial, the top South Sudanese official in Washington, said that since his country is not an advanced economy, “shutting down the oil will not lead to a doomsday.”

“In the Bible, it says, ‘Man does not live on bread alone.’ I would say, ‘South Sudan does not live on oil alone,’ ” he added.

Landlocked South Sudan is now building oil pipelines through Kenya and Ethiopia to reach Indian Ocean ports and avoid shipping through Sudan. However, analysts say these projects will take at least three years to complete and cost billions of dollars.

The southern government also has been forced to readjust its budget priorities from infrastructure projects to spending on health care, education, national security and food security.

The government also will have to raise taxes to make up for lost oil revenue, said Lual Acuek Lual Deng, a former Sudanese finance minister.

The gains from higher taxes would be marginal in a country where 97 percent of the population is unemployed.

“The government will have to reduce its size, and prices will have to go up,” said Mr. Deng. But if this situation continues for many months, “people will go onto the streets,” he added.

South Sudan’s bloated army accounts for a large part of the government’s expenditure, but any attempt to trim army salaries will lead to unrest, analysts say.

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