Talisman-generated oil revenues going to the Khartoum regime.
A recent confidential IMF Report reveals massive increases in Sudan’s military expenditures, even as the agricultural sector remains badly under-capitalized. Junta leader Omar el-Bashir declares that oil revenues will be used for a “jihad” against the people of the south. On his occasion, we may take him at his word. This is the real meaning of Talisman’s “constructive engagement” in Sudan.
Eric Reeves [December 13, 2000]
Northampton, MA 01063
Speaking about his war on the people of the south, National Islamic Front leader Bashir declared earlier this year that he was “determined to continue with the jihad (holy war) and raise the banner of Islam” [Agence France-Presse]. But “jihads” are expensive, and this one is costing between $1 million and $1.5 million a day—very likely much more, when all war-related costs are included. How are Bashir and his brutal junta partners paying for it?
A confidential IMF report tabled at a November 20, 2000 meeting makes all too clear that Talisman-generated oil is the answer. To be sure, the extremely technical report by the IMF doesn’t address the war directly—they’re more interested in getting their money back than in halting the slaughter in Sudan. But even the arid language and numbers of the IMF document is shockingly revealing.
Table 2 (page 9) gives an overview of the government budget for the years 1998 to 2000. (1998 is a useful year to keep in mind: it’s the year Talisman entered Sudan with its purchase of Arakis Energy.) The highlight comes in the line under the heading “Memorandum items,” specifically “Military expenditures.” (Sources are given as “Sudanese authorities; and Fund staff estimates.”)
The figure for 1998 is 42.8 billion dinars, or roughly $170 million; for 1999 the figure is 62.2 billion dinars, or roughly $250 million; and for 2000, the Government of Sudan figure indicated is 84.1 billion dollars, or roughly $340 million dollars. The military budget has doubled in the time that Talisman has been in Sudan and started oil revenues flowing to Khartoum.
The cause/effect relationship could not be clearer
And these are just the military expenditures that the Khartoum regime admits to. It doesn’t include the “in kind” trading (weapons-for-oil/anticipated oil revenues) between China and Sudan, documented by Human Rights Watch in its superb digest of weapons transfers to Sudan, August 1998. And it doesn’t include the fuel bill for the military, or dual-use construction and manufacturing, or the deals made to keep ethnic animosities in the south at their most destructive in the oil regions, or the “payment” to the muraheleen, or Arabized militia, that comes in the form of looted cattle and human slaves.
There’s a great deal that doesn’t show up in the sanitized bookkeeping of the IMF, which is most comfortable in a “see no evil, hear no evil” assessment posture. But the picture is all too clear: oil revenues are exacerbating conflict, they have allowed for a doubling of military expenditures, and they are the means for Bashir and his thugs to continue their brutal “jihad” against the south. Talisman-generated oil revenues are also the reason that Khartoum can boast publicly about building a domestic armaments industry to build its own tanks and missiles.
But there’s yet another cost that emerges in the IMF report: military expenditures have come at the expense of agricultural development. Sudan—whose huge land mass some argue could become the “breadbasket of Africa”—is squandering its agricultural potential to pursue an immensely destructive “jihad” whose only purpose is to maintain the Khartoum regime’s grip on power.
What are the IMF conclusions about the agricultural sector in Sudan under National Islamic Front governance and control of oil revenues? They have a great deal to say, and it is highly critical.
The IMF speaks of there being “in 2000, an increasingly critical shortfall in credit to the agricultural sector during the key planting season” [page 13]. How can a regime that is receiving—with the huge spike in oil prices—roughly $500 million in new oil revenues annually fail to capitalize adequately its agricultural sector? This is economic madness—this is Bashir’s “jihad.”
The IMF notes more specifically: “Undercapitalized, the Agricultural Bank [of Sudan] has been unable to meet the total demands on it for agricultural credit” [page 13].
Why don’t Bashir and his partners in “jihad” adequately capitalize Sudan’s Agricultural Bank? Because they’re too busy using Talisman-generated oil revenues to buy military equipment to effect a final military solution to their “southern problem.” This callous mismanagement of the economy is what Talisman Energy would have investors believe is their “constructive engagement” in Sudan. It might be more accurately seen as Talisman’s abetting of the massive economic destruction of Sudan. Oil revenues aren’t helping Sudan; they are exacerbating brutally destructive conflict.
As the Harker report on Talisman’s presence in Sudan made clear: “It is difficult to imagine a cease-fire while oil extraction continues, and almost impossible to do so if revenues keep flowing to the Greater Nile Petroleum Operating Company partners [Talisman, along with Petronas, China National Petroleum Corp.] and the Government of Sudan as currently arranged” [Harker report, page 16].
There is no “constructive engagement” by Talisman in Sudan. There is only a ruthless, viciously disingenuous grab for profits in the midst of unspeakable human suffering and destruction. It is human greed at its ugliest.