Bonham Global Consultants: Recommendations to the World Bank Road and Highway Infrastructure Fund for. South Sudan

Transcription

1 Bonham Global Consultants: Recommendations to the World Bank Road and Highway Infrastructure Fund for South Sudan By: Adam Croglia, James Deng, Michael Lewan, Ana Villarreal PSC 783: Comparative Foreign Policies Professor Matt Bonham December 6, 2011

2 1 Executive Summary In July 2011, South Sudan became an independent nation after decades of conflict with Sudan. While the nation and government rejoiced in their new autonomous state, much work needs to be done to create a self-governing and self-sustainable country. One of the most critical projects that must be undertaken immediately is the improvement and creation of roads. Roads serve as a vital source for commerce, communication, and trade for this land locked nation. The current road situation in South Sudan can only be described as desperate, with gangs, landmines and weather dictating the day-to-day safety. Additionally, unpaved routes and treacherous terrain drive up the price of goods due to high transportation costs and restricting trade with neighboring nations. Upon a thorough analysis of the situation, Bonham Global Consultants deems it necessary that the World Bank aids the South Sudanese government in rebuilding and constructing the necessary road infrastructure for South Sudan. Specifically, we recommend that South Sudan: establish trade routes with neighboring nations, repair roads in the nation s capital to better utilize the transportation of the country s resources, build and repair roads in rural locations to further develop the country s agricultural industry, build and repair bridges to aid with internal transport, travel costs, & delays, and finally to remove dangerous landmines to ensure safety and decrease costs associate with new road construction. Background History and Political Climate

3 2 The country of Sudan gained independence from British colonial rule in The nation experienced tremendous strife from the beginning. The country experienced a two civil wars from 1955 to 1972 and 1983 to 2005 between the North and South. In 2005 the last civil war ended with a Comprehensive Peace Agreement. During this period of unrest 2 million Sudanese were killed and 4 million were displaced. On July 9, 2011 South Sudan officially declared independence. A whopping 99% of the South Sudanese population supported the separation from the North ("South Sudan Profile," 2011). South Sudan established a democratic government with legislative, judicial and executive branches. Elections are to take place every four years and the next election is scheduled to occur in 2015 ("The world fact," 2011). While the country of South Sudan has a number of highly desired natural resources, including oil, it remains one of Africa s least developed countries ("South Sudan Profile," 2011). Resources and Economy South Sudan holds a number of lucrative resources, the most notable being oil. 75% of the oil of Sudan prior to partition was located in the south ("South Sudan Profile," 2011). While the South Sudanese economy is dependent on oil, the country boasts a number of other resources, including agricultural goods. 30% of the country s economy is based on agricultural production- crops include mangos, rice, wheat, sugar cane, cotton, beans, peanuts and livestock ("The world fact," 2011). South Sudan s natural resources put it at an advantage in regards to trade and potential economic security, yet it

4 3 remains on Africa s list of least developed countries, in part due the limitations of poor road infrastructure ("South Sudan Profile," 2011). Road Infrastructure The road infrastructure in South Sudan has been an issue long before its independence. The country reports 7,000 km of road, with only 220 km of it being paved (Iqbal, 2011). 6 km of this paved road makes up the tarmac in the capital Juba, while the city of Khartoum in Sudan has over 10,000 km of tarmac roads (Amoko, 2010). The average time it takes a vehicle to travel over an unpaved road in South Sudan is 6.4 km/hour (Ranganathan & Briceno-Gramendia, 2011). Cargo deliveries in the country are directly affected by the poor road infrastructure, and on average delivery times are 24 times higher than the current global benchmark (Ranganathan & Briceno-Gramendia, 2011). It is also estimated that 16% of the total cost of food and beverage products comes directly from transportation costs (Ranganathan & Briceno-Gramendia, 2011). Weather also has a huge effect on the access and drivability of the roads. The road that connects the capital city, Juba, to the coastal city of Port Sudan in Sudan is untravelable for half of the year due to excessive flooding during the rainy season (Ranganathan & Briceno- Gramendia, 2011). The Ministry of Transport and Roads oversees and is responsible for the infrastructure of roads, river transport, airports and railways ("Sudan Consortium," 2006). Prior to the separation between the north and south, the roads were intentionally poorly maintained to deter militants, like the Lords Resistance Army, from terrorizing the south ("Sudan Consortium," 2006). The Ministry is currently working on bettering the roads of

5 4 the country, yet they have received little funding to start the program. The program, which was started in 2005, was calculated to be in an 80 million USD deficit from their first drafted budget and no real progress on the initiative has been made ("Sudan Consortium," 2006). While the country has had issues relating to the funding of the program a number of outside parties have stepped up to contribute to the road infrastructure initiative. The European Union has pledged 30 million USD thus far and the World Food Programme plans to administer the project ("Sudan Consortium," 2006). Analysis of the Current Road Infrastructure Situation Trade South Sudanese trade development and expansion is greatly hindered based on the poor status of transportation infrastructure, specifically roads. Domestic and foreign trade plays a fundamental role in development, and sustainability, of a new state. South Sudan has many opportunities for trade based on considerable agricultural resources and willing trade partners; however, having sound road infrastructure is key to profitable trade both domestically and regionally (World Food Program, 2011). Uganda is positioned as an eager and desirable trade partner, but substantial progress is limited based on a lack of access to suitable land trade routes (Isik, 2011). Without suitable roads for trade, air transport becomes an alternative option. However, this shift greatly increases trade coasts and limits the profits of all parties involved. With the high price of air travel, informal border trading grows, eliminating the role of the state, and limiting economic growth. The lack of proper roads and cheap trade

6 5 transportation forces alternative means of product distribution. The lack of formal trade routes subverts a formal, state involved, trade process, including state taxation. Lack of proper roads for trading has also lead to the current highly asymmetrical trade pattern between Uganda and South Sudan. Ugandan exports to South Sudan are skyrocketing, while exports from South Sudan to Uganda remain stagnant due to insufficient domestic trade roads and infrastructure coordination. This asymmetrical relationship hinders South Sudan s development (Trademark Southern Arica, 2011). Increase of the Price of Food Stuffs South Sudan s poor road conditions threaten the nation s food security. The nation depends on Uganda and Kenya for more than half of its food from East Africa, although it also sources a few crops from the Democratic Republic of Congo. Heavy rains have caused roads like the Juba-Wau route through Western Equatoria virtually impassable, resulting in the delay and hindrance of trucks and traders to make it to other states. Most roads connecting states and towns of South Sudan have caused delays of trucks carrying foods due to bad road condition. In Karika Payam of Mundri West County in Western Equatoria State, travelers literally spend days on the roads with trucks stuck in the mud (Kamba, 1). The rough roads have affected the population, because the transportation of cargo is delayed and therefore goods cannot reach the market easily. This has led to the skyrocketing of food prices, and since South Sudan is one of the poorest nations on earth, the majority of people cannot afford to purchase foodstuffs. Poor roads are also

7 6 contributing to food insecurity by limiting the delivery of aid by NGOs like World Food Programme. Numerous aid vehicles get stuck on the roads with food onboard, which makes them venerable to bandits who loot the vehicles. The road conditions also cause food insecurity by making it expensive for NGOs to deliver aid. For instance: For over 15 years, humanitarian aid has had to be largely delivered by air at huge cost due to the poor road infrastructure, lack of road maintenance and insecurity caused by civil war. The delivery of food aid in Sudan is one of the most costly WFP operations worldwide, with between US$ million spent annually on transport cost (38-43% of total annual project costs), or almost double the value of the commodities moved. Of this delivery cost, approx. US$ million or 65% is air transport cost (World Food Program) Businesses and organizations are forced to use air transportation, which is very expensive. Some towns don t have airports, making it almost impossible for them to receive aid. Poor road infrastructure is forcing people to use the most expensive means of goods delivery transport, which decreases the amount of aid and foodstuffs that can be distributed. Road Insecurity The quality of roads in South Sudan is severely inefficient and limiting. In addition to providing logistical hazards, the lack of a quality network of highways and roads contributes to numerous physical hazards that cause drivers to feel endangered. This feeling of insecurity hampers the country s potential and would be adequately addressed by the establishment of more efficient roadways- roadways that not only improve transportation, but would also improve the country s safety and stability.

8 7 Weather often plays a critical factor in the drivability and security of the roads. During the rainy season, which lasts from April to November, a majority of the roads in the state are forced to close. According to reports, the roads become so muddy that vehicles attempting to travel get stack[ed] on the road side for almost three to four days (Robert, 2010). Yet even during the dry season, travel routes are severely limited and dangerous. According to another World Bank study, South Sudan has among the slowest traffic rates, with an average pace of 6.4 kmph (Ranganathan and Briceño-Garmendia, 2011). This lack of drivability serves as a major-to-severe obstacle to doing business for about 60% of South Sudanese businesses (Ranganathan and Briceño-Garmendia, 2011). This slow pace does not just impact business operations, but it also directly impacts the safety of travelers in the country and affects the country s overall security issues. One of the leading security problems in South Sudan stems from the existence of violent gangs. These gangs utilize local forests as strategic hiding locations that enable surprise attacks, robberies and murders on stranded motorists. According to South Sudanese reporter Amoko Robert, the subpar roads makes it difficult for cars to travel at safe speeds, which affords the forest gangs to take advantage of robbing innocent passengers (Robert, 2010). In February 2011, inadequate roads closed off areas in the southern state of Jonglei, which prevented local authorities access to the region; this lack of security presence resulted in the killings of 105 individuals during a violent outbreak (Richmond, 2011). While it is not a guarantee that these deaths would have been avoided had better road infrastructure existed, the mere fact that authorities were unable to provide services and response exacerbated an already violent situation.

9 8 Further complicating the safety issue of local and national roads is the fact that the region is covered in remnants of the decades-long civil war. It is estimated by the World Food Program that South Sudan has between 500,000 and 2 million unexploded landmines and a higher amount of unexploded ordinances (World Food Programme). While this poses an obvious security risk, it also has prolonged the further development of infrastructure, as the unexploded devices need to be cleared in order for construction to be completed at reasonable costs (Ranganathan and Briceño-Garmendia, 2011). Recommendations Upon thorough review and analysis of the current economic, political and social issues in the new nation of South Sudan, the Bonham Global Consultants have deemed the issue of road development to be a critical issue of need. As such, it is our recommendation to the World Bank that the following five initiatives be implemented: 1. Establish trade roads with neighboring countries. in particular to link South Sudan with key trading parties and ports in Sudan, Kenya and Uganda. South Sudan s poor road infrastructure discourages trade and business due to high transportation costs. 60% of South Sudanese businesses ranked transportation as a major obstacle to business (Ranganathan and Briceno-Garmendia, 10). Road repairs will boost South Sudan s trade with its neighbors by reducing the cost of transportation. The construction of better roads will shorten the distance traveled by commercial trucks, as well as increase the loads they carry, thereby decreasing trading costs. Currently a truck carrying goods and services spends unnecessary amounts of time traveling and carry far less than full capacity due to poor road infrastructure. After the roads are repaired trading costs will be significantly

10 9 reduced, which will cause the number of traders to increase. The repairing of roads will not only boost trading with the neighboring countries, but also with nations abroad. South Sudan is a landlocked country and its exports and imports come through the port of Mombasa in Kenya. Therefore, they have to be transported by road to-and-from South Sudan. 2. Build and repair roads to Juba in order to create an efficient and secured transportation nexus in order to better utilize the transport of the country s natural resources and goods. As stated, South Sudan has an abundance of lucrative resources, most notably crude oil. The current status of road infrastructure limits the exploration, production and transportation of oil and additional resources. As a result, exports to key markets are severely hampered. Since South Sudan is dependent on oil revenues it is imperative to remove any frictional costs that might be limiting total revenues. By improving internal transportation, centered in the capital, flow of goods and resources will greatly improve and the length of transport will greatly decrease. This too will improve the country s economic prospects by providing critical services to underserved regions and establishing new businesses opportunities. Further it will provide a more secured network that will reduce violence, while improving emergency and aid services that are currently logistically difficult. 3. Build and repair roads to rural locations to better maximize the potential of the country s agricultural industry. Agriculture makes up 30% of South Sudan s economy and the country s ability to expand trade is essential to further the economy (CIA, 2011).

11 10 However the roads that connect rural agricultural bases to larger cities, where the demand for foodstuffs is high, are in poor and deteriorated conditions or simply nonexistent (Gar, 2009). This not only limits the access between peoples and products from cities and rural communities, but also drives prices up on all the goods transported due to the increased consumption of oil and the dangerous terrain cargo vehicles must face. By repairing and creating roads connecting rural communities to urban centers, rural populations will not only be able to more easily and readily supply cities with foodstuffs, but will also drive commodity prices down and increase the transaction of goods, services and ideas between the two communities. 4. Build and repair key bridges to better facilitate internal transport, improve travel costs and avoid crippling delays. The South Sudanese climate changes drastically by season. During the rainy season, many roads once usable are made impassable by river flooding. Many of these flood locations are known and expected, however proper bridges do not exist. By building, and in some cases rebuilding, bridges over known areas of river flooding, infrastructure failure and fallout can be decreased. Specifically, the passage between Tombura and Nagero is known to have bridges out of service due to excessive flooding. These specific areas are in need of infrastructure development. Many vehicles get stuck and stranded based on impassible river conditions. These trucks carry food and other humanitarian aid materials. Should bridges be built in specific areas in the most need, the distribution of materials and tradable goods that go throughout South Sudan will significantly increase.

12 11 5. Remove landmines in conjunction with the United Nations to ease construction of needed roadways and lower associated costs. There are upwards to 2 million undetonated landmines along the roads of South Sudan (World Food Programme). While these landmines remain intact and undetonated, imperative work on the country s road infrastructure cannot progress. The World Bank should seek a partnership with the United Nation s Office of Disarmament Affairs to identify and detonate landmines scattered around the country in a timely manner before roads are repaired. This will not only help in further developing vital road infrastructure, but will ensure security and safety for those who work on and travel the roads. Landmine identification and elimination is critical to the sustained success of the road infrastructure initiative in South Sudan.

13 12 References Actually, J. (2011, August 06). Bad roads lead to high food prices. Retrieved from food-prices-in-jonglei.html Amoko, R. (2010, August 09). S. Sudan: Poor roads hinders development. Retrieved from Bureau of African Affairs. (2011, September 22). US State Department: South Sudan. Retrieved from Gar, K. (2009, September 10). Rural development, a key to reduce poverty in south sudan Retrieved from reduce,32424 Iqbal, Z. (2011, September 13). South sudan: independence marked by major challenges. Retrieved from independence-marked-by-major-challenges/ Isik, G. (2011, July 15.) Addressing South Sudan s Impediments to Regional Trade. World Bank: Growth and Crisis Blog. Retrieved from: regional-trade

14 13 Kamba, A. (2011, August 24). Poor road infrastructure threatens food security for south sudan s northern states. Retrieved from s-northern-states/ Ranganathan, R., & Briceno-Gramendia, C. M. (2011). South sudan infrastructure: a continental perspective. Robert, A. (2010, August 9). S.sudan:poor roads hinders development. Retrieved from Southern Sudan Government, Ministry of Transport and Roads Juba. (2006). Sudan consortium South sudan profile. (2011, November 22). Retrieved from South sudan starts reconstructing juba-nimule road. (2008, November 12). Retrieved from The world fact book: South sudan. (2011, December 1). Retrieved from Trademark Southern Africa. (2011, August 2.) Enhancing cross border trade between South Sudan and Uganda. Retrieved from: sudan-and-uganda World Bank. (2005.) Emergency road repair and mine clearance of key transport routes in Sudan.