Saturday, June 9, 2012

South Sudan- Austerity or Normality?

We have spent the last week in South Sudan looking at the risks and vulnerability associated with the ongoing violence coupled with the Governments lack of income due to no oil based revenues and significant inflationary pressures.  Through this period there seems two clear, and perhaps even somewhat linked, possibilities:

Possibility 1.  Current austerity measures are not able to survive the next few months. This has the potential to lead to a wide range of problems including humanitarian challenges (some are mooting a 'disaster') and the likelihood that Government salaries are not able to be met. Inside the security forces this could be catastrophic, if soldiers and police pursued other sources of illegitimate income.

Possibility 2. Austerity measures actually do work..... after all South Sudan have, in reality, been managing tiny budgets for many, many years. That said, there is an increased and improved spending appetite inside the Government that will need to be moderated.

One thing is clear. The tiny capital of Juba is conjuring much as we close up on the first anniversary of independence.

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