Is real peace at hand between the two Sudans? Officials are busy running around Juba and Khartoum — the capitals of the nearly warring nations — trying to ratify eight agreements made in the recent talks in their respective parliaments. Meanwhile, as the result of a deal on oil prices, the two major petroleum companies on the border have begun what is to be a long process to get the pipelines back in action. Presidents Omar Hassan al-Bashir of Sudan and Salva Kiir of South Sudan have begun calling each other “brother,” and the former is planning a trip to Juba. Citizens from both countries and analysts in the region have reacted to the agreements with varying levels of enthusiasm. This week, the two countries reopened their borders. U.N. Secretary-General Ban Ki-moon commended al-Bashir and Kiir “for demonstrating the statesmanship that made a comprehensive agreement possible and for having once again chosen peace over war.”
War had seemed inevitable just months ago. South Sudan and Sudan split in 2011 under a 2005 agreement that had itself ended decades of warfare, including two civil wars and the death of millions of people. Under the agreement, South Sudan was left with over 70% of oil production but dependent on Sudan’s port. In January, Sudan halted South Sudan’s oil exports over a dispute on fees. South Sudan then refused to pay and accused Khartoum of stealing oil. Then, in April, full-blown war nearly broke out after South Sudan’s army marched north and briefly occupied Heglig, an oil town that produces half of Sudan’s oil production. Days of clashes destroyed major oil facilities, and the border was closed, sealing off all trade routes for oil and consumer goods.
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Arguably the most significant agreement made was the deal to resume oil production, after prices were agreed on how much the oil would be sold and transported for. The three-year deal states that South Sudan will pay a $7 service fee per barrel as well as transfer fees of $8.40 a barrel for using the Greater Nile pipeline and $6.50 per barrel to Petrodar, a Chinese-run pipeline consortium. The much-needed revenue is expected to save both economies from nearly collapsing. Following South Sudan’s secession, Khartoum lost over 70% of the total oil. As a result inflation has soared and countless government projects put on hold. For South Sudan, which depends on oil for over 98% of its income, a continuation of the oil block would have led to what Mehari Taddele Maru, a senior analyst at the African Union, calls a “prefailed” state. “Without even becoming a state, it would have failed,” says Maru. With high inflation, increasing levels of crime and most work being done by NGOs, it is believed South Sudan was headed for severe problems. Reports circulating around Juba suggest that the military would have run out of funds to pay their soldiers in two months.
Economist Abda el-Mahdi, former Finance Minister for Sudan, tells TIME that while she recognizes the potential benefits from the oil agreements, the real test will come in the coming weeks. “Given that the two parties greatly lack confidence and trust in each other, what has taken them to this agreement is economic needs and international pressure,” el-Mahdi says. “What is greatly lacking is conviction of the need for genuine integration of the two countries economically and on the human side.”
For example, a proposal that would allow citizens on both sides the right to reside, work and own property in either country has already come under attack by nationalists in Khartoum. There are still disputed territories between the Sudans, including the future of the oil-rich Abyei region. While both sides have agreed on a referendum to decide Abyei’s fate, they disagree on who should vote. The Dinka, who are loyal to Juba, live there permanently, however, the Messarai, who are loyal to Kharotum, are roaming pastoralists. Who would be considered a resident with the right to cast a ballot? As of now, the referendum will be held in October 2013, and both countries will choose two judges to form an arbitration commission that will decide the framework of the vote. The danger is that if either side feels the other has gained more or there has been a lack of consultation, it will just fuel more conflict.