The unintended consequence of US sanctions on the living standards of ordinary Sudanese has been exceptionally severe.  A look at a few key sectors – finance, transportation, agriculture, health, and information technology – highlights the damage that has been caused to the lives of ordinary people in Sudan by over 20 years of a the US sanctions regime,  including the State Sponsor of Terrorism (SST) listing

 

US sanctions on Sudan have had an adverse effect on the country’s financial sector. For instance, millions of ordinary Sudanese families and individuals cannot directly receive the lifeline of private remittance inflows from family members working abroad. This has wreaked havoc on the planning and budgets of millions of households for basics like food, school fees, and medical bills or other types of unforeseen expenditures. The risk of falling foul of these sanctions also means that all but a slither of the global financial system bans processing any Sudan-destined transactions.

Remittances sent from abroad therefore invariably get to Sudan in two expensive and delay-ridden ways. Remittances are either routed to the recipient through regional money exchange bureaus or paid directly to the recipient by a Sudanese-based middleman, once the sender has deposited the sum in an overseas bank account held by the middleman. Both options incur costly "processing fees" and amount to a regressive income tax imposed by the sanctions on remittances destined for ordinary Sudanese and their families, which, in turn, can, for example, over time equal the cost of sending – or not – another child to school or obtaining essential medical care to save lives.

Meanwhile, small- and medium-size businesses in Sudan – the bedrock of the economy and incubator of job and wealth creation – also find themselves virtually locked out from accessing short-term international trade finance.  Most global banks (especially those in the West) shun corporate finance for all Sudanese entities due to burdensome compliance with sanctions and reputational risk stemming from Sudan’s SST designation. Even the handful of private Sudanese firms that can access international trade finance invariably incur a hefty ‘sanctions premium’ on the loan which, in turn, feeds through to ordinary Sudanese consumers in the form of higher costs for goods and services.

Sudanese government officials have welcomed the recent announcement that the US government was on the cusp of granting an Office of Foreign Assets Control (OFAC) exemption from sanctions to three Sudanese commercial banks. But Sudanese officials suspect that even then, the banks will still not do business with Sudan as long as the SST listing remains in place.

Other adverse effect in this sector is that there will be continued to restrictions on Sudan’s ability to access the shipping insurance markets. Sudanese officials argue that as a result of this there will also remain an acute dearth of long-term project finance for large scale infrastructure, agricultural, and industrial projects that could transform the living standards and opportunities for economic advancement of ordinary Sudanese.

In the agricultural sector, US sanctions have also had a telling effect. Large-scale agricultural projects have suffered from sanctions on the financial system. But sanctions, even more so, have affected the chief source of income for ordinary Sudanese subsistence farmers and small scale agricultural cooperatives, the bedrock of agricultural output for domestic consumption.

Like large Sudanese agricultural companies, subsistence farmers and cooperatives have been blocked from accessing (duty free or  otherwise) the US export market – still the most lucrative in the world  - under various initiatives such as The Africa Growth and Opportunity Act (AGOA). Sanctions have also prevented their access to American-certified seeds (such as the high-yielding and drought or pest-resistant variety).  “Put starkly, US sanctions have therefore narrowed the escape from poverty for nearly half of Sudan’s working population,” notes an official Sudanese document.

Access to agricultural technical assistance from the US has also been prevented by the sanctions. Sudanese officials say that this has also contributed to low productivity by subsistence farmers and farmers’ cooperatives.  This, they argue, has led to an escalation of poverty as well as an acute lack of awareness of best practices in environmental land management.  “Turning that around by freeing the agriculture sector from the sanctions could reduce the chances of intra-communal conflict in Darfur and elsewhere in Sudan in the future,” the Sudanese argue.

US financial assistance that had been directed to the supply of agro chemicals has also been ended by the sanctions. It is the same with a ban on the sale of modern irrigation systems and equipment. The Sudanese government says that these constraints have meant that many ordinary farmers have either been forced to reduce cultivated areas or have gone out of business entirely, owing to the high cost of producing an ultimately low agricultural yield.

Sanctions have also meant that Sudanese companies with huge potential have been unable to access heavy American agricultural equipment.  This has also had a direct impact on ordinary Sudanese while crop yields have thus remained way below maximum potential, so undermining federal and state ability to respond effectively to local food emergencies, according to the government.

In the transport sector, land transportation has also suffered.  Sudan currently has only 23 active locomotives, while, 19 years ago there were 131. This is due to the refusal of General Electric Company (GE) to provide spare parts for the locomotive engines it had originally supplied to Sudan.  Without adequate spare parts Sudan has been unable to establish a viable railway system.

The lack of a national railway network has also meant that it has been excruciatingly difficult at times for international aid convoys to reach the states of Darfur and their internally displaced persons (IDP) camps with food and needed supplies safely. Many convoys are reported to have come under attack by bandits and other unidentified assailants on the road.

Without adequate rail transportation, food prices have risen significantly across Sudan over the last few years and those left most vulnerable to this price volatility are the poorest Sudanese who find it increasingly difficult to sustain themselves, according to the government.

In the health sector Imports of x-ray imaging, CT and MRI scanning equipment and other medical-related items have been exempted from US sanctions. But they are still subject to individual licensing approval from OFAC. “There is a strong case for exempting medical related items from sanctions entirely because OFAC licensing approval for such imports has not been swift enough,” notes a Sudanese health official. He says this has led to “needless deaths of ordinary Sudanese, especially infants and the elderly, because of protracted delay in securing OFAC approval to service or import spare parts from the US for vital hospital machinery”.

Sanctions have also meant that the US National Institute of Health (NIH) cannot grant money to an American or Sudanese institution working to cure or analyse life-threatening endemic diseases in Sudan, health officials point out. One notes: “Diagnostics by Sudanese doctors and other medical professionals have thus been hobbled severely, culminating in entirely avoidable deaths – especially among vulnerable social groups. Sanctions-constrained medical diagnostics have also often thrown ordinary Sudanese families into financial hardship by forcing them to seek better (and in many cases life-saving) diagnostics abroad for their loved-ones.”

US sanctions have also severely affected the production of pharmaceuticals in Sudan, and it has led to the loss of world-leading American technical expertise, and US-made pre-cursors, machinery, and spare parts. The effects of these losses on ordinary Sudanese have been manifold. Notably, this has included reduced access to anti-malarial and other medicines for combating endemic diseases amongst the most vulnerable Sudanese individuals and households, owing to the shortage of domestic generic and specialist drugs (which are often of poor quality, too).

With regard to the Information Communication Technology (ICT) Sector, the US government announced a partial lifting of sanctions relating to educational exchange in April 2013. However, this relaxation targeted academic research and the free flow of information between educational institutions and professional associations - not, the personal use of communication technologies, according to the Sudanese authorities.

They note: “In other words, the current sanctions regime on the ICT sector continues to impact negatively on ordinary Sudanese citizens’ access to knowledge and information online in a number of sectors - including educational institutions and humanitarian efforts that utilise geographic information system (GIS) technology.

“Indeed, the current sanctions regime on the ICT sector is even stiffer than that applied to Iran. For example, computer science students in Sudan have been unable to obtain their certificates after taking and passing online courses affiliated with US institutions such as MIT. The reason given is that certificates are not issued for countries placed on the SST list.”

Additionally, online educational websites, such as Google Scholar and Audacity remain blocked to users in Sudan. Additionally, crisis mapping, which was very useful during the last floods in August 2013, is hobbled in Sudan by the sanctions. Crisis mappers have remained unable to access or purchase tools and/or applications made by American companies, such as Google (including People Finder and Google Crisis Map) or products by ESRI, an American company that specialises in GIS technology.

The sanctions on the ICT sector as they stand in Sudan also outlaws software sales, servicing, and maintenance updates on lynchpins of the digital age, including all Microsoft products, Apple Operating Software, and  Google’s Android System. No Sudanese inside the country can purchase original software online. Regular citizens, as well as universities, rely heavily on pirated software that can cause irreparable harm to hardware.

The impact of US sanction s on public finances has been severe and has placed serious constraints on public finances. The government says that has been the most damaging factor of the sanctions on the living standards of ordinary Sudanese households. “Continuing US-Sudan sanctions, and especially the underlying and erroneous SST designation, legally prevents US economic assistance to Sudan and mandates the US government to oppose any financial support to Sudan from any international financial institution in which the United States has membership,” argues the Sudanese government. “Put starkly, therefore, a ban on trade and investment with 25 per cent of the global economy (the US), coupled with zero financial help from international financial institutions like the IMF and World Bank, has retarded the eradication of widespread poverty in Sudan.”

The government continues: “Indeed, over the last few years, ordinary Sudanese have weathered both the largest shock to the world economy since the Great Depression and sharp rises in world food prices without even a nickel from the IMF or World Bank or Western-donor-funded social safety net.

“The sanctions and the SST listing have also restricted the ability of Sudan to obtain foreign debt relief; this, too, has impacted on the living standards of ordinary Sudanese, as the Sudanese government needs to have much more headroom to take on new concessional loans aggressively to finance much needed pro-poor social infrastructure investments across the country,” the government adds.