01/08/2015
lisa monaghan

The Sentry (2015) The Nexus of Corruption and Conflict in South Sudan

South Sudan was born amid great hope. The citizens of the world’s newest nation voted with one
voice in support of independence for a country that boasted vast natural wealth. Goodwill from the international community brought significant international development assistance and the country was expected to quickly transition to self reliance, for the most part, on the basis of its own oil revenues. Instead, South Sudan has plunged into civil war, economic collapse, and creeping international isolation. The country’s elites have built a kleptocratic regime that controls all sectors of the economy, and have squandered a historic chance for the development of a functional state. These predatory economic networks play a central role in the current civil war, because much of the conflict is driven by elites attempting to re-negotiate their share of the politico- economic power balance through violence. This report maps out the corruption and the
conflict- financing system in South Sudan and describes the likely channeling of illicit money flows. The primary goal of this report is to focus on the mechanics of the system, rather than specific individuals or their networks of facilitators and enabler. While seemingly focused on the government, the report acknowledges that the rebels were also part of this kleptocratic system in the past, and are likely to be involved again in the event of a negotiated settlement.
The Sentry continues in depth investigations into illicit economies, funding streams, and supply chains of the armed opposition. This report identifies four major vectors along which the country’s wealth and revenues are diverted towards the personal and institutional interests of elites:
I. The Extractives Sector: the extractives sector, which is the largest source of national revenue, is mismanaged and highly opaque
II. The Military State: the military controls the economy; directly by taking the largest share of the budget and indirectly through closely held companies and contracts
III. State Spending: the procurement system is prone to corruption, waste, and a lack of tangible results, and suppliers tied to elite interests are regularly awarded lucrative contracts
IV. Money Laundering Hub: the emerging financial sector in South Sudan has been exploited by
elites who use it as a laundering and revenue generat ing vehicle
South Sudan’s economy is currently facing a major financial squeeze with oil revenues drying up and
conflict and corruption minimizing the effectiveness of foreign investments and humanitarian
donations.

 

Category: Conflict, Economics and Livelihoods, Politics and Political Agreements