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Case Studies in Sanctions and Terrorism

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Case 89-3
US v. Sudan (1989–: Human Rights; Civil War; Democracy)

| Chronology of Key Events | Goals of Sender Country | Response to Target Country |
Attitude of Other Countries | Legal Notes | Economic Impact | Assessment |
Author's Summary | Bibliography |

Economic Impact

Observed Economic Statistics

In 1988, per capita income is $440 for Sudan as a whole, $150 for southern part of country. Inflation is about 85 percent in 1989. (National Journal, 10 December 1988, 3130; Washington Post, 1 July 1989, A31)

Between 1975–85 Sudan received $1.6 billion in economic aid from US, nearly two-thirds of US military aid for sub-Saharan Africa. US military aid to Sudan has decreased from high of $101.2 million in 1982 to $900,000 in 1989. Administration officials attribute cuts to budget austerity rather than change in policy. (Washington Post, 4 March 1989, A18; 24 May 1990, A48; Congressional Quarterly Weekly, 13 May 1989, 1133)

Sudan receives $25.7 million in military aid in fiscal 1988, $4.4 million in fiscal 1989 from previous foreign military sales (FMS) grants. Another $9.2 million in prior-year FMS grants was suspended because Sudan is in arrears on US loans. Since February 1988 $75 million has been spent for famine relief. (Congressional Quarterly Weekly, 13 May 1989, 1133)

Sudan has incurred foreign debt of over $10 billion. Civil war is estimated to cost more than $1 million a day. (Washington Post, 24 May 1990, A48)

EC [non-humanitarian] aid to Sudan was cut in 1990. To date, Brussels has halted 300 million ecu ($345 million) in grants, which include sums for development projects and for losses on commodity exports. (Inter Press Service, 19 January 1994)

International aid to Sudan was $650 million before the 1989 coup, while in 1993–94 it was only $180 million. (Agence France Presse, 6 March 1996)

Iran reportedly financed Sudan’s 1993 purchase of 20 Chinese ground-attack aircraft. Iran apparently provides Khartoum aid for arms purchases in exchange for use of Sudan’s marine bases. (Europa World Yearbook 1997, 3065)

The war is also the main reason for Sudan’s economic mess. It is true that inflation, now about 70%, is better than last year’s 200%. But the government’s finances are a disaster area; the public debt at $16 billion-plus, is more than twice the country’s annual GDP. The war is by now an impossible extra burden. (The Economist, 24 June 1995, 21)

Since the United States has only $70 million in annual trade with the Sudan, including $50 million in US exports, US officials concede that the sanctions are “more a statement of principle than anything else.” (New York Times, 5 November 1997, A7)

As of January 1998, net blocked Sudanese assets in the US amount to $18.9 million. (OFAC, Terrorist Assets Report, January 1998, 6)

The withdrawal of Coca Cola is one of the most spectacular spinoffs of the embargo imposed by Washington…. Local business has [also] reportedly complained about shortages of spare parts and some consumer goods, such as computers, have become scarcer. Companies that used to import computers from [the] United States are now closing their doors. (Inter Press Service, 9 April 1988)

Sudan: Foreign trade, 1990–2004 (millions of dollars)
		Exports			Imports
Year		Total	To United States		Total	From United States
1990		515	14		1,305	47
1991		366	15		1,401	102
1992		320	11		1,261	58
1993		352	11		1,153	58
1994		474	33		1,152	60
1995		535	21		1,263	48
1996		496	18		1,298	55
1997		510	12		1,511	41
1998		542	3		1,605	7
1999		706	0		1,577	8
2000		1,625	2		1,479	18
2001		1,755	3		1,894	19
2002		1,887	1		2,196	12
2003		2,609	7		2,723	17
2004		3,774	3		4,086	34
Source: IMF Direction of Trade Statistics CD, March 2006.

Sudan: Economic aid, net disbursements, 1986–96 (millions of dollars)
	United States	United Kingdom	Netherlands	Other bilateral	EC	Multilateral IFIs	Total
1986	148.0	37.5	52.5	421.3	62.1	205.1	1128.6
1987	103.0	31.3	58.9	457.2	86.2	199.3	944.8
1988	109.0	45.2	67.0	382.0	56.3	276.5	937.9
1989	110.0	50.8	57.0	242.9	67.9	244.3	772.9
1990	143.0	37.2	62.5	185.0	87.6	311.3	826.6
1991	85.0	47.5	46.3	205.7	142.9	353.5	880.9
1992	11.0	12.9	32.2	151.2	80.6	259.4	547.4
1993	21.0	15.0	35.3	94.6	33.4	258.6	457.9
1994	32.0	25.7	29.1	87.3	33.1	205.3	412.5
1995	8.0	10.9	31.4	80.4	21.7	83.4	235.8
1996	10.0	9.6	22.1	76.4	23.5	88.7	230.3
1997	17.0	9.9	20.5	38.4	21.2	31.2	138.5
1998	13.2	31.0	26.7	79.3	16.8	41.7	209.4
1999	71.5	13.2	15.3	58.5	19.6	38.6	243.0
2000	5.2	5.7	15.3	64.1	13.9	21.8	225.4
2001	17.5	9.9	23.6	56.6	21.3	46.7	185.4
2002	119.6	13.5	22.7	76.5	17.0	50.5	350.9
2003	175.4	33.0	21.0	102.6	247.1	34.6	616.6
2004	377.6	116.6	0.3	250.3	68.9	43.5	882.3
Source: OECD, Geographical Distribution of Financial Flows to Aid Recipients, various editions.

Sudan: US economic and military aid, obligations, and loan authorizations, 1986–2004 (millions of dollars)
	Economic		Military		Total
1986	121.2		17.0		138.3
1987	96.6		6.0		102.6
1988	63.2		0.9		64.1
1989	56.8		0.9		57.7
1990	21.2		–		21.2
1991	50.1		–		50.1
1992	35.7		–		35.7
1993	53.9		–		53.9
1994	66.5		–		66.5
1995	30.1		–		30.1
1996	24.4		–		24.4
1997	27.8		–		27.8
1998	65.9		–		65.9
1999	92.8		–		92.8
2000	50.9		–		50.9
2001	68.7		–		68.7
2002	120.9		–		120.9
2003	186.0		–		186.0
2004	474.1		5.0		479.1
Source: U.S. Overseas Loans and Grants: Obligations and Loan Authorizations, July 1, 1945–September 30, 2004.

Calculated Economic Impact
Phase I: (1989– )
Reduction in US military and economic aid, welfare cost estimated as 90% of reduction in average annual flows in 1992–1996 compared with 1986–89	$43.7 million
Reduction in other bilateral economic aid, welfare cost estimated as 90% of reduction in aid from 1992–96 annual average levels compared with 1986–89.	$344.8 million
Annual total (1989– )	$388.5 million
Phase II: (1993– )
Prohibition of financial transactions with Government of Sudan	negligible
Loss of trade with United States, welfare cost estimated as 30 percent of average annual value of trade, 1990–96	$ 23.6 million
Freeze of Sudanese assets; welfare cost estimated as 10 percent of assets frozen in the United States	$1.9 million
Annual total (1993– )	$ 25.5 million
Average annual total (1989– )	$408 million

Relative Magnitudes
Gross indicators of Sudan’s economy
	Sudanese GDP (1987)	$11.1 billion
	Sudanese population (1986)	23.1 million
Annual effect on sanctions related to gross indicators
	Percentage of GNP	3.7
	Per capita	$17.7
Sudan’s trade with United States as percentage of total trade
	Exports (1987)	3
	Imports (1987)	11.5
Ratio of US GNP (1987: $4,527 billion) to Sudanese GDP		408

Assessment

Arthur S. Banks, Alan J. Day, and Thomas C. Mueller
“Due in part to the weakness of opposition political forces, the administration has proved more resilient than anticipated, its Islamization campaign proceeding steadily in the north despite continued concern among non-Muslims about the imposition of fundamentalist measures.” (Banks, Day, and Muller 1997, 796)

Amnesty International
“Sudanese from virtually all sectors of society, from northern Sudan, the war-torn south and the Nuba mountains, suffered human rights violations as the authorities continued to suppress political opposition…. Serious human rights abuses were committed by all sides in continuing fighting.” (Amnesty International 1997)

Southern Faction Chief Riek Machar
“The southern problem has been cracked with the signing of the peace agreement. Now, if the Americans changed their policy of opposition to the Sudanese government…the SPLA would have no choice but to come to terms with the government.” (Financial Times, 8 September 1998, 7)

Author's Summary

Overall assessment
Policy result, scaled from 1 (failed) to 4 (success)	2
Sanctions contribution, scaled from 1 (negative) to 4 (significant)	2
Success score (policy result times sanctions contribution) scaled from 1 (outright failure) to 16 (significant success)	4
Political and economic variables
Companion policies: J (covert), Q (quasi-military), R (regular military)	—
International cooperation with sender, scaled from 1 (none) to 4 (significant)	3
International assistance to target: A (if present)	—
Cooperating international organizations	EC
Sanction period (years)	17+
Economic health and political stability of target, scaled from 1 (distressed) to 3 (strong)	1
Presanction relations between sender and target, scaled from 1 (antagonistic) to 3 (cordial)	3
Regime type of target, scaled from 1 (authoritarian) to 3 (democratic)	1
Type of sanction: X (export), M (import), F (financial), Z (asset freeze)	F
Cost to sender, scaled from 1 (net gain) to 4 (major loss)	1

Authors’ Comments

While a peace agreement was reached ending the Civil War between northern and southern Sudan, the conflict in Darfur has reignited international concern and caused the United States to maintain sanctions. Moves toward democracy also remain elusive.

Bibliography

Amnesty International. 1997. Amnesty International Report 1997: Sudan. London.

Banks, Arthur S., Alan J. Day, and Thomas C. Muller, ed. 1997. Political Handbook of the World. Binghamton, NY: CSA Publications.

CRS (Congressional Research Service). 1992. Economic Sanctions Imposed by the United States against Specific Countries: 1979 through 1992. August 1992 (revised). Washington.

CRS (Congressional Research Service). 2005. Sudan: Economic Sanctions. October 2005 (revised). Washington.

CRS (Congressional Research Service). 2006. Sudan: Humanitarian Crisis, Peace Talks, Terrorism, and U.S. Policy. February 2006 (revised). Washington.

Europa Publications Limited. 1997. Europa World Yearbook 1997. London.

Hufbauer, Gary Clyde, and Nicholas K. Mitrokostas. 2003. Awakening Monster: The Alien Tort Statute of 1789. Policy Analyses in International Economics 70. Washington: Institute for International Economics.

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