South Sudan should not be born into debt

The nearly unanimous South Sudanese referendum result announced over the weekend is likely to lead to independence for a southern state by July. But it only marks one step along the road to true sovereignty for this oppressed and impoverished people. As south Sudan's oil wealth has been used to enrich elites in the North for decades, so it is now being viewed with hungry eyes by the USand its allies.

The debt which is inherited by this new state is likely to play a key element in attempts to assert control on south Sudanfrom the outside. The Sudanese government in Khartoumcurrently has a debt of $35 billion, large parts of which stretch back to the 1970s and '80s when the regime of General Nimeiry was propped up by the US. $20 billion of this debt represents interest, following years of default by the Bashir regime.

The UKclaims Sudanowes £650 million ($1 billion) to the Government's Export Credit Guarantees Department - the department which insures some British exports, usually arms, aerospace and big fossil fuel projects. The department refuses to say what projects the debt is based on. What we do know is that since 1984 an interest rate of between 10 and 12 per cent has been charged on this debt, wildly inflating it - in fact new figures reveal that up-to 90 per cent of Sudanese debt owed to the UKis interest.

Justice demands that south Sudanis not handed a portion of Khartoum's debt, but the International Monetary Fund probably has other ideas. One suggestion is that Sudanwill be allocated debt on its inception that will then be cancelled. No-one should fall into the trap of believing this to be just - in reality it would mean the southern state would be forced to go through a lengthy cancellation process, during which it would probably have to take out new loans to pay interest on its unjust debts, as well as whatever reforms the IMF felt like pushing on the country. It would ensure south Sudancould not escape from the grips of international institutions and their neo-liberal ideology.

Meanwhile, popular protests have spread to Khartoum in north Sudan. Here too, most of the accumulated debts undoubtedly arose more through international power play than genuine attempts to improve the lives of Sudan's people. The people of Sudanmight want to take a look at the calls of people as far apart as Greeceand Bolivia, and call for an audit of Sudan's debts so they can find out just what the debts paid for and how legitimate they are.

Sovereignty for south Sudanmeans much more than a declaration of independence from the north. It means the people of that country controlling their own economic development. But with a large debt hanging over their heads, and reserves of oil ready to plunder, the people of south Sudanwill need to be prepared to continue to struggle for real freedom.

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