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Return to war in Sudan could cost in excess of $100billion warns new report
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Nov 25, 2010 - 11:30:00 AM

MEDIA RELEASE: EMBARGOED UNTIL 00:01 EAST AFRICA TIME (EAT) THURSDAY 25 NOVEMBER 2010

Return to war in Sudan could cost in excess of $100billion warns new report

(Nairobi / Cairo, 25 November 2010). A return to war in Sudan would entail costs in excess of $100 billion according to a new report published today by a coalition of European and African economic and political think-tanks.

Published less than 50 days ahead of the landmark referendum on Southern independence, ‘The Cost of Future Conflict in Sudan’, a new 24 page report by Frontier Economics Limited co-launched by The Institute for Security Studies (ISS) and the Society for International Development (SID) and the Aegis Trust presents fresh analysis on the economic costs of war for Sudan, some of Sudan’s immediate neighbours - Kenya, Ethiopia, Uganda and Egypt – and for the international community. The report comes amid fears that the referendum could trigger an escalation of violence.

The referendum comes six years after the 2005 Comprehensive Peace Agreement brought an end to the 22 year civil conflict between the Government of Sudan and the Sudan People’s Liberation Movement/Army. An estimated two million people were killed in Sudan and four million displaced between 1983 and 2005.

The report recognizes the difficulties in measuring the costs of potential future conflict. It provides different scenarios – low, medium, high conflict scenarios and a peace scenario – and models four different paths of economic growth.

The report concludes that while there may be some positive impacts on the region from investment being redirected from Sudan, the evidence suggests the net impact of conflict would be significantly negative. In particular, these would include:

·         US$50billion to Sudan itself in lost GDP

·         US$25billion of GDP relative to a more stable situation in neighbouring countries; and

·         US$30 billion in peacekeeping and humanitarian costs to the international community

Between 10 – 20% of Sudan’s GDP comes from oil. If the oil supply were to be shut down with the outbreak of civil war, then Sudan would immediately lose 10-20% of its GDP – equivalent to $6.5-13 billion in 2011 for as long as oil production remained shut down.

The overall cost would be particularly grave for Sudan’s neighbours; amounting to 34% of their total annual GDP over a 10 year period. Both Kenya and Ethiopia could potentially lose over US$1billion per year.

“This report demonstrates the high cost of conflict. It implies that domestic, regional and international parties should be asking – ‘Are we doing enough to avoid a war that might cost over US$100 billion and ruin countless lives’?” said Matthew Bell, Associate Director of the London based, Frontier Economics.

“It is widely acknowledged that a return to war in Sudan could cause immense human suffering.  This report should also concentrate the minds of policymakers who are also concerned about the future economic stability of the region,” said James Smith, Chief Executive of Aegis Trust.

 “There is less than 50 days from a referendum that may change the map of Africa. This report demonstrates that the neither Sudan, Sudan’s neighbours nor the international community can afford a serious escalation in violence,” said Kenneth Mpyisi of the Nairobi based Institute for Security Studies.

ENDS

EDITORS NOTES

1.      PRESS CONFERENCE AND INTERVIEWEES AVAILABLE

A press conference will be held at 11:00 East Africa Time, Frangipani Room, at the Serena Hotel, Nairobi on Thursday 25th November. The report launch will start promptly at 11.00, please arrive earlier to allow for set-up.

The panel will include senior representatives from Frontier Economics, ISS and SID.

The report authors will also be available separately for interviews and background briefings in Nairobi and London.

For Africa, please contact James Gondi - [email protected]/+254 721 567 232 – for an embargoed copy of the report, confirmation of attendance at the press conference and to arrange interviews.

For the Middle East & North Africa, please contact Marwa El-Ansary – [email protected]  / +20104990348 – for an embargoed copy of the report, confirmation of attendance at the press conference and to arrange interviews

2.      SIGNATORIES TO THE REPORT

Frontier Economics Limited is an independent specialist in the use of economics to make better decisions.  They work across public policy, strategy, regulation and competition issues.  Visit:  www.frontier-economics.com. 

The Institute for Security Studies (ISS) is a leading African human security research institution which works towards a stable and peaceful Africa characterized by sustainable development, human rights, the rule of law, democracy, collaborative security and gender mainstreaming. Visit: http://www.issafrica.org/pgcontent.php?UID=2 

The Society for International Development (SID) is a global network of individuals and institutions concerned with Development which is participative, pluralistic and sustainable. Visit: http://www.sidint.net/about-sid/

The Aegis Trust campaigns for a sustainable peace within Sudan.  Visit www.aegistrust.org

3.      REPORT METHODOLOGY

The analysis uses a top-down approach adapted for the particular circumstances in Sudan.  It is based on existing, peer reviewed, statistical analyses of the likely impact and duration of civil war.  This literature examines the likely loss of gross domestic product to the country itself and its neighbours from civil conflict.  In applying these findings to the situation in Sudan, the report develops four specific scenarios that illustrate possible outcomes following a referendum and the incremental impact on economic output of each scenario.  The costs to the international community are based on current costs of peacekeeping and humanitarian aid and relevant benchmarks for future costs under each scenario. 

The report was undertaken as a desk-based study on behalf of the parties concerned.  It draws on the best available public information and a wide literature.  There was not scope to collect primary evidence on the ground from Sudan, the region or other stakeholders.  The report discusses in detail the range of uncertainty around the estimated impacts, and uses conservative assumptions where necessary. 



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