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Sudan's conflict with South Sudan cuts both ways

The nations' failure to resolve a border dispute and a row over oil revenue has hit both economies hard, with businesses facing collapse and prices soaring.

May 13, 2012|By Alsanosi Ahmed and Robyn Dixon, Los Angeles Times

"The Sudanese economy is crumbling, and the government is unable to take control of it. Every decision they take fails because it doesn't address the core of the problem," he said. "They should take serious austerity measures on all government officials because the cost of running the government is too high and they can't afford it anymore."

An advisor to Bashir, Mustafa Osman Ismail, said in an interview that after South Sudan's decision to shut down oil production, Sudan would never again allow the South to export its oil through Sudanese pipelines.

"Even if we are given half of its revenues, we will not allow it," said Osman, referring to the transit of oil through Sudan. He said South Sudan has been using its oil money to feed its army and support militias against the North.

The World Bank could not have been more blunt in its February warning to South Sudanese officials about the likely repercussions of the oil shutdown: The new country's economy could collapse by July, it said.

The bank predicted a Zimbabwe-style scenario: a crash in the South Sudanese pound and exponential inflation, which in one of the world's least developed countries could mean only hunger and death.

Mohammed, the economist, said the Sudanese government's stance in the oil dispute was "a matter of a pride."

"But that's wrong," he said. "In times like this, you have to look out for your own interests, regardless of whether it benefits your enemy."

robyn.dixon@latimes.com

Special correspondent Ahmed reported from Khartoum and Times staff writer Dixon from Johannesburg, South Africa.

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