US to retain Sudan on terrorists list: Envoy By REEM ABBAS in Khartoum | Friday, December 16  2011 at  16:22

America's top diplomat Hillary Clinton. FILE | AFRICA REVIEW 

The US will not normalise its relations with Sudan any time soon, an envoy said.

Making the announcement, US envoy for Sudan and South Sudan Princeton Lyman, expressed worries about the escalating security situation in the border areas of Southern Kordofan and Blue Nile.

Mr Lyman told the guests at the two-day International Engagement Conference for South Sudan that there were many unresolved issues between the two countries and added that "the clashes that take place raise a lot of tension, and they impact on the ability of the two to negotiate other issues".

The US Government, he added, will also not remove Sudan from the list of terrorist-sponsoring nations as long as there was conflict.

In the months leading to the referendum, the US told Sudan that it would look into normalising relations and removing some sanctions if it cooperated with South Sudan to ensure peace and stability. However, the US also emphasised on finding a lasting solution to the Darfur crisis as a step to removing the sanctions.

In June, a war erupted in Southern Kordofan and another in Blue Nile region, between the Sudan People's Liberation Movement -North Sudan faction, and the Sudanese army. 

Since then, the UN has accused Sudan of bombing a refugee camp and stopping much-needed humanitarian aid. 

Trade sanctions

Sudan needs US support for loans and grants and to support its debt-relief campaign after it lost 75 per cent of its oil revenues due to secession.

In 2012, it was expecting to face a $7 billion deficit in its budget and foreign reserves.

Last October, the US renewed the 14-year long comprehensive economic, financial and trade sanctions and Sudan's chances to debt relief grew even smaller with the lack of American involvement.

The IMF has stated that the Sudanese economy would shrink in 2011-2012 at the rate of -0.2 per cent in 2011 and -0.4 per cent in 2012. This would be down from the 6.5 per cent growth in 2010 and an average of 6.7 per cent from 2003 to 2009. 

Additionally, Sudan was one of the most indebted countries in the region. Its international debt amounts to at least $38 billion.

Annually, its  debt servicing costs $1 billion a year, adding more financial drain to the impoverished country.

For years, Sudan campaigned for debt relief. However, to be considered for debt relief under the  Heavily Indebted Poor Countries (HIPC) initiative, a country needs to implement economic and political reforms that the Sudanese Government was unwilling to do.

Sudan was slapped with US sanctions in October 1997 due to its alleged involvement in supporting terrorism.