An Upate on US Engagement with Sudan

U.S. DEPARTMENT OF STATE

Office of the Spokesman

May 18, 2011

On-The-Record Briefing

Special Envoy to Sudan Ambassador Princeton Lyman and

USAID Administrator Rajiv Shah On Their Recent Visits to Sudan

May 18, 2011

Washington, D.C.

MS. FULTON: Good morning, everyone. Welcome to the Department of State. I’m very happy to have with us today, Special Envoy to Sudan Princeton Lyman, Ambassador Princeton Lyman, and the USAID Administrator Raj Shah to talk to you about their respective recent trips to Sudan and U.S. engagement in Sudan.

So without further ado, I will turn it over to Ambassador Lyman first for some remarks, and then Administrator Shah, and then we’ll open it up for Q&A after that. Thank you.

Ambassador Lyman.

AMBASSADOR LYMAN: Thank you. Thank you all for being here. Let me just briefly cover a few items and then I wanted you to hear from Administrator Shah, who has just come back from a very, very successful trip.

I was in the region just a couple weeks ago, stopping in Doha for the Darfur peace talks, a day in Khartoum, then down to South Cordovan where there was – that was on the first day of the election there, and I’ll come back to that – and then to Darfur and then to Juba.

The issues that are very much on our mind are the following: the Darfur situation, where we are hoping that at Doha, where negotiations have gone on for some time, that there can be an agreement between the government and at least two of the rebel groups. Others have also been invited to Doha. My colleague Dane Smith, who works full-time on Darfur, has been spending a great deal of time in Doha with one of his staff to bolster that negotiating process. It’s a hard process, but at least the parties are talking.

I spent some time in Khartoum talking with people there about the progress under the Comprehensive Peace Agreement, and then went to South Cordovan because they’ve just had in that time – it was the first day of elections – an election for governor and state legislature. It’s a very critical state because it borders on Abyei, it borders on Darfur, it is also supposed to be where one of the processes of popular consultations are to take place. It’s a state where a lot of the civil war was fought, but it’s in the North.

Since then, the election has come off, but there is now a dispute over the results. The National Electoral Commission has declared the NCP candidate, the governor, to have been reelected, and the SPLM candidate has raised a number of what they feel are irregularities. We have encouraged them to follow the process established, which is to go to the courts with these complaints, and we’ve urged all parties to stay calm, and so far everybody has stayed calm. But this has continued to be a very tense situation.

In Darfur, I was looking at recent displacements in the Zam Zam camp, talking to UNAMID about questions of access, talking to internally displaced people, getting a sense of the security situation and the possibilities for better access and better programs there, and then went to Juba, where there was, at that point, and still is to some extent, a crisis in Abyei. Abyei is a region that is in dispute between the North and the South. It’s now in the North. Part of the CPA, there was to be a referendum or other way to resolve the issue of whether Abyei should be in the North or the South. That has not been resolved.

There was a clash on May 1st in which 11 members of the Joint Integrated Unit – that’s a military unit – were killed, and it looked like the two sides were almost ready to go to war. Together with the UN and the AU, we worked very hard to get the parties to go back to an agreement they had signed but not implemented called the Kadugli agreement, whereby both sides withdraw the extra forces that they’ve brought into Abyei. Meetings are going on to establish a clear timeline for that withdrawal, it unfortunately hasn’t started yet. But we hope that agreement will be implemented and reduce the tension in the state while we continue to work on a overall solution for Abyei.

Final thing I would mention is that the parties, after something of a hiatus, are back negotiating issues under the Comprehensive Peace Agreement. They start tomorrow, in Ethiopia, to look at the most difficult and important economic issues, and that will be followed by political talks to take on the other issues. So that process is now resumed and underway, and we’ll be following it very, very closely.

So let me leave it there and turn it over to the administrator.

MR. SHAH: Thank you. I want to start just by thanking Ambassador Lyman for his strong leadership on all of these complex and important Sudan issues, and recognizing that the United States has played such a critical role in implementing the CPA and pursuing effective implantation of that.

I had the opportunity to travel to Sudan, both to Juba and to Khartoum, with my counterpart development ministers from the United Kingdom, Andrew Mitchell, and from Norway, Erik Solheim. And the purpose of our trip and the decision to go together was to send, really, a united and coordinated message and to have a development dialogue in both the North and the South that was well organized and consistent across some of the major development partners for South Sudan and for Sudan.

In Juba, we had the chance to visit with President Kiir, the cabinet, various members of civil society, and the private sector. And our messages were pretty consistent across those groups. We, first and foremost, reaffirmed the importance of the CPA in continuing to make progress on a range of issues that Ambassador Lyman just described. But we spent most of our time talking about the development strategy for the South, and what it would take to help Southern Sudan become a successful and viable economy with real private investment and transparent and effective governance. We underscored that private sector growth and transparent, credible governance that allowed for businesses to work in Southern Sudan would be critical to the efforts to diversify the economy and meet population needs.

We noted that USAID, partnering with others like the World Bank, have helped Southern Sudan improve its performance on the Doing Business Report significantly. And we heard from a range of private sector partners about how conditions had improved so that now they were seriously investing in various sectors in Juba and in Southern Sudan.

We focused on agriculture and we had the chance to announce a major new partnership with the Government of Southern Sudan and with a range of important partners, such as the Alliance for a Green Revolution in Africa, the International Fertilizer Development Corporation, Equity Bank, and others to make sure that a focus on smallholder farming and smallholder agriculture would, in fact, allow for a more diversified and productive Southern Sudanese economy and begin the process of creating real food security in the South. And we’ve worked with the World Food Program to also design programs and projects that would help towards that end. That project was jointly launched with Minister Anne Ito from the Ministry of Agriculture in Southern Sudan, and we’re very optimistic about what that will result in, in the near future.

Our conversations with the government there also highlighted the need to fight corruption and to put in place transparency initiatives with respect to how oil revenues are spent. Our Norwegian counterparts, having had unique experience with that issue, have offered to take the lead in partnering with the government in pursuing that objective.

We also wanted to send a strong, coordinated message that too often development assistance is not well coordinated and well organized, and everybody tries to do everything. In the South, we suggested that the United States will take the lead in donor coordination, especially across the UK, Norway, and U.S. programs. That doesn’t mean the U.S. will lead in every sector and every area of work. It simply means that we will work in a more coordinated way with our counterparts from the UK and Norway to make sure there’s a real division of labor and a consistent way of working with the Government of Southern Sudan and against the government’s own plans and strategies going forward.

And finally, we offered to host in September – and President Kiir accepted this offer – a major development and private investors conference here in Washington, where we would offer our Southern Sudanese counterparts the opportunity to come and present their own plan and their own vision for a diversified economy, a well-governed Southern Sudan, and the ability to attract real private investment. And we expect that a broad range of donor partners, the world multilateral institutions, and private partners and private companies will participate in that important meeting.

In the north, we had a continued dialogue on development issues, and we continue to work with the UK and Norway on issues like debt relief and exploring what that might look like in the future. In – the Norwegians have offered to host an investor conference for the north, and we certainly support that effort. Most of our conversations in Khartoum from a USAID perspective focused on Darfur, and as Ambassador Lyman mentioned, we highlighted some of the critical challenges for access and safety for humanitarian workers right now, and asked for real progress in that area of work.

We also asked for a real partnership to accelerate recovery efforts where safety and security is strong enough to allow for more diversified programming, and to allow for people to move out of camps and into local communities in a way that is safe and productive. And we worked with our range of implementing partners and NGOs to learn about some of the issues they’re having, and also some of their, really, enterprising efforts to try to diversify their programming to allow for voluntary resettlement where that’s possible.

Overall, for me this was my second trip following a trip that I made perhaps 10 months ago or so, and I came away very optimistic, especially with commitments that the southern Sudanese have made to transparent governance, to having an integrated development strategy, to working with donor partners and development partners in a coordinated way, and with a real desire to attract private investment as the core driver of wealth and wealth creation and employment in their economy. So, we’ll look forward to working with Ambassador Lyman, with the Department of State, and with our partners in Sudan to achieve those outcomes.

Thank you.

MS. FULTON: Okay. With that, we’ll open up for questions.

QUESTION: Hi. Andy Quinn from Reuters. For Ambassador Lyman: We’re now, what, a little bit under two months out from the South Sudan declaring independence, and you said they’re only just now getting back to the table on these outstanding issues. What’s your – do you think that they are going to be able to make the deadline, to try and get this wrapped up by the time South Sudan becomes independent? And secondly, on Khartoum’s actions in Darfur, we have reports of airstrikes being carried out against villages. Are they, in any way, fulfilling the U.S. expectations for opening up in their behavior in Darfur?

AMBASSADOR LYMAN: Yeah. Let me take your first question. What happened up until about two weeks ago or so, is that the – what were called the cluster groups and sub-cluster groups, these are the technical negotiating committees – has more or less completed their work and identified issues which had to be settled at a higher political level. And that’s what’s beginning now, is to take those issues which need higher level political resolution. Let me just give you some examples on the economic side which are being taken up in the next two, three days. One – two of them relate to the oil sector. One is the amount of oil proceeds to the North during what is perceived to be a transition period before they lose most of their revenue from the South’s oil, but second is – are problems of ownership of the pipeline and other complicated structural issues in how you run the oil sector when it – when the countries divide. So those – some of those are political-level decisions and are being addressed.

Then there’s a question of redemption of Sudanese pounds when the South issues its own currency and how you – how that’s handled. That needs to be addressed. And there are some remaining issues on division of assets, et cetera. So those are issues being taken up by a higher-level group of economic leaders, and then there are the political issues that they’ll take up afterwards, mainly borders, security, range from its – for South Kordofan and Blue Nile, and border monitoring, and, of course, Abyei. So, I think they’re now engaged at the political level on those. They’ve more or less finished a lot of the technical work.

On your second question, we’re very disturbed by the continued fighting. The Security Council has said that the Government of Sudan should not bomb, and when they do it means civilians are affected and displaced and often killed. We’ve also urged the rebels to reach agreement on a ceasefire or a cessation of hostilities. So far they have not been prepared to do so because both sides seem to feel that such an arrangement should only be part of a broader peace agreement. I find that somewhat frustrating, but that’s the situation. In the meanwhile, the kind of fighting that just took place recently and the bombing is quite distressing.

QUESTION: Just a quick follow-up on – particularly on the Darfur issue. Given that Darfur was central to the U.S. proposal to Khartoum about this roadmap for eventual normalization, is it safe to say that that cannot proceed any further while the situation in Darfur remains as it is now? Has that frozen?

AMBASSADOR LYMAN: No, it’s not frozen. The roadmap pertains to progress under the CPA and on the situation in Darfur. And, as I mentioned, progress is going on under – on the CPA, and there are negotiations going on in Doha which the government is participating in on Darfur. So, I wouldn’t at all say the situation is frozen, but how things play out in Darfur obviously is terribly relevant to how we proceed with the roadmap.

QUESTION: Can I just follow up on Andy’s question for the Ambassador? I didn’t hear you answer his specific question about your optimism given the timeline that we’re facing.

AMBASSADOR LYMAN: Actually, I am optimistic, for two reasons: One, I think for some of these issues it’s critical that they reach a decision by July 9th, because on July 10th they will want the oil to function, they will want the borders – people to continue to be able to trade on the borders, et cetera. I don’t think these negotiations are going to be easy, but I think there’s a great deal of impetus to reaching the critical decisions that enable the two sides to go forward.

So, I’m reasonably optimistic that it can be done.

QUESTION: This is for Administrator Shah. You mentioned that you went with the other two ministers. In Europe, there has been this tendency of the African countries asking Europe not to dump aid but to develop infrastructure that can generate employment and democratic institutions development. So what is happening on that front?

ADMINISTRATOR SHAH: Well, I think the conversation in – and the programs that are in place in Southern Sudan are a good example of the steps forward on that front. We are working together with a range of local construction firms and with the World Food Program to help build out road infrastructure and feeder road infrastructure in particular to support the development of an agricultural economy. That’s a joint effort between the United States and the UK.

In sectors like health and water, we’re also working together to help address malaria, for example, which is the number one cause of death for children under the age of five in Southern Sudan, and doing that in partnership with the UK and with Norway so that we have a coordinated effort that is about achieving real results.

And I think across the sectors and across our conversation, the conversation was very focused on what are the results we’re trying to achieve and how are we going to accomplish a division of labor across our three country partners in order to help Southern Sudan achieve those results. And that’s really what they were asking for as well. They were welcoming aid in an orientation where that aid was about achieving real results in the agriculture sector, the health sector, education programs, and efforts like that.

QUESTION: This was a question on your trip. Now you’re back in Washington. Can I ask you a question for here? Yesterday, after a hearing in Congress, the five Democrats –

MS. FULTON: Tejinder, we’re going to stick to Sudan.

QUESTION: Okay.

MS. FULTON: (Inaudible.)

QUESTION: Okay.

MS. FULTON: Thank you. Any further questions?

QUESTION: I’ve got one for Dr. Shah. There’s been a number of reports suggesting that the Northern economy might really be in trouble after separation, and you’ve stressed what the U.S. is planning to do for the South. I’m wondering what the U.S. has in mind for the North. Do you agree with those assessments? Do you think that they’re looking at tough times? And can you talk to us anything – anything more about the debt relief proposals? Are we any closer to an understanding of how and when that might happen?

ADMINISTRATOR SHAH: Sure. Well, I do believe that in the North they will have important economic issues that require real leadership, and we discussed them in some detail. They need a more diversified economic base. Particularly in southern parts of the North, they need to reinvest in agriculture, which continues to be the area of employment for 80 percent of the population in those particular areas and communities. And they need to do that in a way that recognizes that trade with the South is going – whether in the agriculture sector or other sectors, is going to be a critical part of an economic strategy, just as for the South trade with the North will continue to be quite important for their economic viability. So we did have important conversations on those types of issues.

I think it’s important to recognize that together with the UK and Norway, it’s our expectation that the UK in particular will take the lead in engaging with the North on a set of development programs and projects. And when it comes to issues like debt relief, U.S.-held debt is a very, very small proportion of the aggregate, of the total aggregate debt. So while those discussions are ongoing, it’s really other countries that are leading the technical process. And of course, the United States is part of the technical process with, I believe, our assistant secretary of Treasury, either there now or on their way soon to continue the technical conversations on debt relief.

QUESTION: Can you give us any sense of the timeline? I mean, how long are those technical conversations likely to take?

AMBASSADOR LYMAN: I can just add a little bit to what the administrator said. And it’s an interesting insight into the negotiation process, because one of the things that did occur at an earlier negotiating session was a tentative agreement between the North and the South how they would handle the debt issue and something called zero option, in which the North assumes all the debt but the South works with them to get international debt relief and the international community does as well. There was a meeting at the World Bank during the spring meetings of the Bank and Fund in which this was discussed, and the Bank and the African Development Bank are leading a technical effort, as the administrator said, to gather all the information, et cetera, that goes into a debt relief process.

This is a complicated, long-term process. Reaching what is one of the critical stages – that is, determining if Sudan is eligible for what’s called HIPC, Heavily Indebted Poor Countries debt relief – could take as much as two years. So that process has started, but it’s a long, complicated process. But I really was struck by this tentative agreement, which is a very good win/win situation and the kind of thing we’d like to see more in the negotiations.

MS. FULTON: Lalit.

QUESTION: U.S. and India are partnering together for agricultural reforms in Africa. Are there any specific projects which both countries are working in Sudan?

ADMINISTRATOR SHAH: Not that I’m aware of in Sudan. There are specific projects in a number of other countries, but to keep this focused I won’t go into describing them now. But I will say that joint trilateral partnership is moving forward very, very effectively in a number of other Sub-Saharan African countries.

QUESTION: Okay. Thank you.

QUESTION: It’s on Sudan, for the ambassador. The Pentagon last night confirmed that it is looking into alleged misappropriation of assets by Pakistan by sending helicopters to Sudan which were meant for fight against terrorism. Is there a mechanism whereby you (inaudible) incoming assets? Have you received any request to check on these – which is the authority, which is on ground checking on this?

AMBASSADOR LYMAN: I’m sorry. I’m not familiar with that. I’ll have to look into it. I was not familiar with that issue. Sorry.

MS. FULTON: Okay. If there are no further questions, this concludes the briefing. Thank you very much for your time.

QUESTION: Thank you.

ADMINISTRATOR SHAH: Thank you.



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