Sudan and South Sudan: The Global Impact Of A New War

With forces gathering on both sides of the Sudan-South Sudan border and clashes already spreading out in all directions from the oil producing border-town of Heglig, it seems that the two nations are again headed towards an all-out war.

The country's leaders have already said as much.

Last week, Sudan broke negations with the south after Vice President Al-Haj Adam declared that the country is now in [a] state of war with Juba, and on Wednesday President Omar al-Bashir took it one step further by vowing to reconquer South Sudan, which celebrated its independence in July.

From today our slogan is to liberate the citizens of South Sudan from the rule of the SPLM [Sudan People's Liberation Movement], and from today it will be eye for eye, tooth for tooth and strike for strike, he said.

War is no stranger to Sudan nor to its southern neighbor, and the latest conflict, which, for all intents and purposes, began in the weeks leading up to the South Sudan's succession when the two countries battled over the Abyei region, is part of a larger war, which is embedded in an even larger war, according to John Prendergast, who co-founded the anti-genocide Enough Project with George Clooney.

It's a very complicated moment, but a moment that, if this all goes bad, would be by far, in a way, the deadliest war on the face of the earth.

Although South Sudan's President Salva Kiir ordered his SPLA troops to withdraw from Heglig on Friday, war still looms.

Since Sudan's independence from Great Britain in 1956, there have only been a dozen years of relative peace in the vast country. But, the past few years have been calm -- at least by Sudanese standards -- and have brought surprising economic growth to the country, with international investment helping both the north and the south, according to the African Economic Outlook.

The oil sector is primarily to thank for the region's recent development, but Khartoum has also benefited from a real estate boom and both nations' infrastructure prospects are on the rise. (Although, it should be noted that the creation of South Sudan did have a negative impact on Sudan's economy since 75 percent of known oil reserves are located beneath southern fields.)

But the specter of war stands to damage that progress, as well as hurt Sudan and South Sudan's foreign partners, the biggest of which is China.

Most of China's oil investments in the former Sudan are in the south, and Chinese companies are also salivating over the possibility of participating in the construction of South Sudan's now almost absent infrastructure, wrote the Council on Foreign Relations' John Campbell in his African in Transition blog.

Disruptions to the Heglig oil field, which produced about half of Sudan's 115,000 barrel per day output before the conflict, poses an immediate threat to China. The field is operated by the Greater Nile Petroleum Operating Company, the controlling stake of which is owned by the China National Petroleum Corp. (CNPC).

Because China eagerly signed new deals after South's independence, China also controls three of the seven other oil blocks in Sudan and South Sudan, with CNPC extracting oil from fields in Southern and Western Kordofan and the Blue Nile state, where Sudanese planes have allegedly been bombing its own citizens.

Any violence is going to hurt China's investments, especially since that will hinder any possible cooperation and negotiation over oil pipelines running through border areas. Additionally, either side is likely to sabotage or cut off the others' oil should they claim the territory.

But if China stands to lose in the oil sector, a war could provide an economic boost elsewhere. China has been one of the main arms and military equipment suppliers for Sudan for the past two decades, reportedly providing Khartoum with the guns, tanks and planes used during the war in Darfur.

Similar to what happened with the oil contracts, it seems that China has moved some of its businesses south following the split. Last week, China quietly sent a boat-load of military trucks to South Sudan through the port in Mombasa, Kenya.

A confidential source told the Nairobi Star that the shipment was part of a deal that was signed a long time ago and is being implemented in phases, but the timing is suspect and it appears that China is happy to supply South Sudan with the tools it needs for whatever might happen in the next weeks or months.

Arms have been flowing into both Sudans for some time, said Paul Sullivan, a professor of economics at the National Defense University.

Arms traders from many countries could benefit [from a war behind the north and the south.

Recently, much of that flow has come from Libya, where the fall of Moammar Gadhafi last year has left an enormous stockpile of weapons without a central government to monitor it.

Additionally, while Russia is still the main supplier of arms to Sudan, a report from the Diplomat suggests that Chinese weapons account for 90 percent of the small arms sales in Sudan.

Still, China seems to be investing in peace rather than war. Although it has a non-interventionist stance in the ongoing dispute, Chinese leaders said at the start of the most recent violence that if asked to step in, the country would willingly mediate a truce, according to AllAfrica.

As for the conflict between Sudan and South Sudan, the danger persists and will for some time.

For problems to be solved, the people involved have to want to have them solved, said Sullivan. I do not see that yet.