March 4, 2013 (SSNA) — While South Sudan has many resources at its disposal (oil, other mineral deposits, agriculture, animal resources) that can be the basis of wealth for all its citizens, a multitude of constraints hold back their exploitation: unambiguous land rights, a minimal road infrastructure, absence of railways, poor state of river transport; lack of electricity and effective communication systems (e.g. internet connectivity), and a very low level of education and health care.
As the private sector is still in its infancy, the public sector plays an overriding role. Because of this, the quality of fiscal (revenue and expenditure) management is vital. Three strands of discussion are relevant to this context: first, the discussion on state building, especially in a post-conflict context. Second, the discussion on public finance management and its reform; and third, the discussion on the challenge of dealing with dependence on mineral and aid rents (termed as ‘resource curse’).
In each of these areas numerous lessons have been learnt but controversies remain. South Sudan has tried to adopt such lessons and its experiences can also provide interesting insights and inform the discussion.
This article focuses on state building. Because the country was largely neglected both during colonial rule as in the independent Sudan, the challenges of state building and post-conflict reconstruction basically coincided. In both of these fields many mistakes have been made internationally and many lessons were learned. One key misconception in both efforts has been the serious underestimation of the tasks. A second has been the view that ‘best practices’ developed anywhere can easily be copied and transplanted in any context. Basically, development experts believed that building the capacity of the state to carry out its core functions – security, infrastructure development, health, education, and taxation to finance all these tasks – would be an easy endeavor.
However, reality has proven otherwise. 50 years after independence of many states, their capacity in these respect is still the same or even worse. Professor Pritchett, who recently visited South Sudan pointed out the dangers of over-ambition in regard to goals and standards relative to available capacity, the establishment of bodies that have the form of modern organizations but do not really execute their tasks, and the neglect of local contexts. These lessons of other countries should give a warning sign to late-comers to state building as South Sudan. Are these lessons taken on board here?
During the six year peace period following the signature of the CPA in 2005, numerous governance institutions and organizations were set up and plans, laws, and concept papers were laid down. Since independence in July 2011, this process continues. While these institutions are largely following the model of a modern democracy, unsurprisingly they do not yet measure up to their standard. The country’s transitional constitution of 2005 constitutes the three arms of government: legislative, executive, and judiciary.
The country has no less than 29 ministries (recently reduced from 37) and 21 commissions. It introduced a decentralized system of governance with the central national level, 10 states, and the local government level with 73 counties. Substantial powers are devolved to the sub-national levels (see below next section). Not all of the commissions are, however, as yet effective, nor are all the laws and policies.
A parliament with two houses – the National Legislative Assembly (NLA) and the State Council (SC) with representatives from the 10 states – 332 and 50 members respectively. While the lower house has also members from the former Sudan parliament, and members appointed by the political parties and by the president, the members of the upper house are partly from the former Sudanese State Council and partly appointed by the president. Thus the system cannot be called ‘elective democracy’. Nevertheless, in the opinion of most people, the parliament meets the aspirations of an inclusive body, covering all regions, political and ethnic groups and gender (25% of the members have to be women).
The ruling party, SPLM, holds 90% of the seats. While five opposition parties are in the parliament, they do neither have the resources nor the experience to formulate policies and to pose an effective and credible opposition. Moreover, these parties tend to be one man shows and/or are based on a specific ethnic group. If anything, the potential for democratization through parties is currently more within the SPLM that has various factions, including army officers, academics, activists, and modern professionals.
A major reason for the very limited control function of the parliament is the ignorance of many members about the function of a parliament and the limited competence especially in the English language. While some are highly educated and experienced, others have little education, among them veteran civil war fighters. Whether the parliament will grow into a relevant institution will depend on the ability of the members to acquire the means and the competences that are required. However, it will be decisive for its role and the relevance that civil society will expect and demand from parliament.
The Interim Constitution provides for an independent judiciary headed by a Supreme Court. The president’s Supreme Court appointments must be confirmed by a two-thirds majority in parliament (the National Legislative Assembly – NLA). The embryonic court system is under huge strain. In September 2011, the chief justice said the courts had the capacity to handle 100,000 cases a year, but in fact faced four times that number. He called for a greater use of traditional dispute-resolution systems to ease the burden of the court system. Interference by the Executive also undermines the independence of the Judiciary.
The South Sudan Anti-Corruption Commission (SSACC) has not proven to be effective. Corruption is widespread and has not as yet been effectively addressed, as many of its beneficiaries are known to be among the top leaders and are regarded as deserved former freedom fighters that seem to be untouchable. No official has been prosecuted for involvement in corrupt practices since the establishment of the SSACC five years ago.
Both South Sudanese citizens and international actors are increasingly concerned about the pervasive and destructive impacts of corruption, but according to the OECD, despite statements to the contrary, ‘there is little will to address it’.
A ray of hope is the South Sudan National Audit Chamber (SSNAC), which, despite very limited means, published reports on the government financial statements for the years 2007 and 2008 that spell out the numerous and major shortcomings. Although presented to the president and to the parliament, no concrete steps seem to have been taken.
Another positive and important development is the establishment of the National Bureau of Statistics (SSNBS) that continues to bring out more and more economic and social data that provide a basis for a more evidence-based policy making process. This institution thereby contributes to transparency in government and with regard of the social situation.
The Ministry of Finance and Economic Planning (MoFEP) combines the tasks of annual economic planning and longer term development planning as well as donor coordination. Its capacity has been strengthened since 2006. However, this is not the case for the remaining 28 other ministries which often have quite limited tasks and may also have overlapping functions, like those for transport and roads & bridges, or are closely related to each other (as an example, there are two ministries for education).
All in all, the large number of newly created government bodies is troublesome. First, they have to cope with the extremely limited pool of skilled staff to get them working. Second, they create a large scope for duplication, and for overlapping and conflicting functions. Most importantly, the broad number of organizations has negative implications for depth of fulfilling tasks and for effectiveness of operations.
Why did this happen? What are the motivations behind? Two explanations offer themselves: First, bloated organizations are created to absorb former fighters, to create jobs, and to benefit on other elements. Second, donors press for and (part-) finance institutions they think are important and that are currently in vogue in development circles. These include for instance the SSACC. It doubles functions that should be done by others, including the Auditor General, the Ministry of Finance, and the Judiciary. Furthermore, the budget of the SSACC even surpasses that of the vital South Sudan Audit Chamber (SSAC). Similar arguments could – and should – be made for most of the Commissions, whose tasks should be executed by the ministries themselves. The effectiveness of many of these Commissions is reportedly very weak.
In the context of present austerity, existing organisations need to be thoroughly scrutinized. Necessary priorities of South Sudan need to be listed and accordingly the vital institutions should be capacitated – that means, be given the resources to function properly. A key lesson is: not everything can be done at the same time.
The author is Assistant Professor and Head of Economics Department, University of Juba, an executive member of South Sudan Economic Association. This article is based on the academic article Macroeconomic policy formation in South Sudan: Building fiscal management jointly published with Dirk Hansohm.