Multi-donor evaluation of support to conflict prevention and peacebuilding activity in Southern Sudan since 2005 ANNEX 11. Individual Donor Policies

Multi-donor evaluation of support to conflict prevention and peacebuilding activity in Southern Sudan since 2005 ANNEX 11 Individual Donor Policies

Policies and Strategies of Major Donors and Agencies Individual donor policies and strategies have evolved over time since 2005 reflecting thereby the development on the ground and changing needs. Here we provide a summarizing overview of policies and strategies of most prominent donors and agencies involved in South Sudan, i.e. EC, Development Assistance Committee (DAC) donors, USAID, international agencies like UNDP and the World Bank as the most prominent international agencies active in Southern Sudan. A brief description is provided of the involvement of non-dac countries like China, India and Arab countries. 1. European Commission The European Commission (EC) is committed to engagement in countries in transition and conflict, and thus has a strategic interest in supporting security, democracy and development in Sudan. The engagement in Sudan is part of the Cotonou Agreement article 8. Due to the dynamics of the peace process in the South and the still weak structures for security and governance, the EC supports the South both economically and politically. However, due to political demands that Sudan be treated as one entity, the counterpart for the Commission is the Government of National Unity (GoNU), and not the Government of Southern Sudan (GoSS). The EC is funding activities in Southern Sudan through the 9th European Development Fund (EDF) and its humanitarian wing (ECHO European Commission Humanitarian Office). A strategic focus has been set on rural and agricultural development using two streams: institutional development at central level in Juba funded through the Food and Agricultural Organisation (FAO) and non governmental organisation (NGO) grant support at local service delivery level. In addition, the EC has seconded a number of technical advisers to Ministry of Finance and Economic Planning, and the Ministry of Agriculture, among others. The EC is informally in the process of preparing for a two-country Sudan post-2011, and is likely to change its approach following a possible separation. This has also been one of the major reasons for opening an EC office in Southern Sudan. The EC tackles food security, rural development and education, while peacebuilding, good governance and capacity building for non-state actors are addressed as other important programme sectors. The key targeting is the resettlement of internally displaced people, including a strong element of capacity building for governance. Thus, significant funds are allocated to the governance sector. The EC's representation in Juba is critically aware of (a) the need for institutional building beyond central level to enhance GoSS s legitimacy and ability to deliver services on the ground, and (b) the fact that conflict over access to natural resources is an issue all over Southern Sudan and therefore also vis-à-vis the EC programme focus. Due to the Government of Sudan deciding not to ratify the revised Cotonou Agreement (from Oct 2009 which is linked to the International Criminal Court s warrant, Sudan cannot receive aid under the EU s current main development instrument, the 10th EDF. The EC will therefore be unable to disburse the 300m pledged for the 2008 13 period for Sudan including South Sudan within the 10th EDF programme cycle. However, aid continues in the following formats: Previous commitments remain unaffected by the legal situation and the EU will continue to disburse funding to the ongoing education, health, disarmament, etc. programmes. 2

The EU is also looking at other ways to channel funding to the Sudanese, e.g. through the Instrument for Stability or the European Instrument for Democracy and Human Rights, to support the implementation of the peace agreement and to foster development. Humanitarian assistance through ECHO will also continue as necessary. As a reaction to the outcomes of various evaluations, the EC decided to take education as a key sector for support, whereas health was dropped as a field for intervention, being taken by other donors. The Commission has strong coordination ties with COMESA, IGAD, EAC, IOC and MDTF. 1 At the GoSS level, the EC has managed to establish a constant dialogue and open communication through the Minister for International Cooperation and the Office of the President. EC Sudan staff travel to Juba regularly from Brussels and members of the EC Delegation in Khartoum regularly visit Juba. Currently the EC has plans only up until the referendum no scenario planning has been done since. However, there is a constant pressure on the main stakeholders and development actors to discuss the key issues which will need to be solved whatever the outcome of the referendum. The EC is disposed to fund, support or facilitate these negotiations in any way possible, if requested by the Sudanese counterparts. The EC recently sent an election observer mission to monitor the April 2010 elections. 2. DAC Donors Due to its traditional cooperation ties with Sudan reaching back to the 1950s, Norway plays an especially prominent role in South Sudan. Supporting the implementation of the comprehensive peace agreement (CPA) is the centre piece of Norwegian involvement in Sudan. The overriding aid of Norwegian assistance is consolidating peace in the whole of Sudan 2. This has been pursued through the leverage afforded by Norway s perceived political neutrality, experience in brokering peace agreements in the Middle East and its multilateral credentials. From the outset of the CPA, Norway has chaired the Assessment and Evaluation Commission (AEC). Established in 2005 the AEC is the main body for overseeing the implementation of the CPA, and as such, one of the most important bodies set up in fulfilment of the stipulations of the peace agreement. While the AEC monitors and assesses the implementation, the Commission also provides advice to the Sudanese presidency with regards to improving institutions and arrangements connected to the CPA. Sudan is consequently the third largest recipient of Norwegian development aid, with a budget of approximately NOK700 million a year. Most of this is channelled through the two multi-donor trust funds 3 (MDTF) and the UN system. Norway hosted both the 2005 International Donors Conference on Sudan and the May 2008 Sudan Consortium. Norway helped establish and fund the Joint Donor Office (JDO) in Juba and also contributed personnel and financial resources to the Joint Monitoring Committee monitoring the ceasefire in the Nuba Mountains. Assistance is also provided through Norwegian institutions and NGOs 4 and through the UN. Since 2006, Norway Sudan bilateral cooperation also comprises the petroleum sector. Norway provides consultative services to both the GoNU and the GoSS in terms of capacity building and technical advice, with a specific emphasis on enacting the CPA principles on the sharing of oil revenue. Norway also supports elections and the referendum 1 COMESA, Common Market for Eastern and Southern Africa; IGAD, Inter-Governmental Authority on Development; EAC, East African Commission; IOC, Interim Oversight Committee, and MDTF, Multi-Donor Trust Fund 2 Development Cooperation, Norway s official website for Sudan, http://www.norwaysudan.org/embassy/norway_in_sudan/development/development_cooperation/ 3 The creation of the two MDTFs was largely a Norwegian initiative 4 A significant proportion of Norway s aid is channelled through its three main NGOs: Norwegian Church Aid (which was inside the Operation Lifeline Sudan (OLS), Norwegian People s Aid (which was outside the OLS) and Norwegian Refugee Council (mainly dealing with IDPs) 3

process through the UNDP Trust Fund. From 2005, Norway has established contacts between the Southern Sudan Commission for Census, Statistics and Evaluation and Statistics Norway, with the aim of building capacity in statistics in Southern Sudan in the framework of the Statistics for Development Programme. The Norway Ministry of Foreign Affairs requested a thorough review of Norwegian strategy in Sudan in early 2010, including a summary of progress made since the signing of the Compact agreement in 2009. Norway is expected to work much more on bilateral issues in the coming years, recognizing the limitations of bodies such as the JDO. Sweden is another important donor for South Sudan. Sweden developed a policy background for Sudan already as early as 2002, amending it with a concept for early recovery assistance in 2004. In 2008, the Swedish government approved a new strategy for Sweden s development cooperation with Sudan for the period 2008 2011. The goal according to the new strategy is to contribute to peaceful development, the respect for human rights, democratic governance, a lasting reconciliation and national unity in Sudan. 5 Swedish support is guided by the goals outlined in the Swedish Guidelines for Sudan 2004 2007, in accordance with Sida s letter to the government regarding the Changing Conditions and Forms for Development Cooperation in Sudan (dated October 2005). The Nordic Africa Institute provided an external advisor for analytical input to the policy design, and an accompanying desk-study on the peace process in Southern Sudan. A revision of the actual Sudan strategy is planned for spring 2010. Sweden s support for long-term development in Southern Sudan is mainly through the MTDF-South. Half of its humanitarian support is channelled through the UN s Common Humanitarian Fund (CHF); in 2005, Sida gave 317 million SEK in aid to Sudan, 205 million of which was humanitarian. In 2006, Sudan received the majority of humanitarian support from Sweden (about 180 million SEK). In Southern Sudan, between October 2005 and December 2006, Sweden and UNIFEM cooperated with the Sudanese women movements on the programme Protecting and Promoting Women s Human Rights and Leadership in Sudan. Apart from official coordination structures, consultations with other donors on an informal level constituted an important element of information sharing and cooperation. Sweden is part of the JDT and has assumed the sector responsibility on health issues. Denmark took the decision to support the peace process before the signature of the CPA, and in March 2005 there was an identification mission that resulted in the Danida Support to Sudan concept paper in November that year, outlining the strategic considerations for the Danish engagement in Sudan, the geographic and thematic priorities and funding modalities. There were seven thematic and geographic priorities identified: capacity building in Southern Sudan (USD7 million through MDTF-S); support to the National Population Census (USD7 million through UNFPA); support to education (initially through UNICEF with $11 million); support to the National Land Commission (USD3.5 million through FAO); support to institution building, conflict prevention and poverty reduction (USD2 million initially to UNDP); support to rule of law and human rights (USD6 million through UNDP); and support to humanitarian programmes (USD45 million). By applying the so-called Regions of Origin Initiative (ROI), Danida developed a bridging mechanism between the humanitarian interventions and the longer-term development programmes. The policy followed the 4R approach: repatriation, reintegration, rehabilitation and reconstruction. Denmark signed in December 2005 a Memorandum of Understanding with the GoNU. A representation office was established in Khartoum, and Denmark became a member of the Joint Donor Team in Juba. Capacity and institution building 5 Embassy of Sweden, Khartoum (2011) Swedish Development Cooperation in Sudan, http://www.swedenabroad.com/page 85445.aspx 4

was a main focus of the Danish policy towards the CPA. Interview partners at HQ level valued the provision of technical assistance as highly important for strengthening human and institutional capacities. Denmark has additionally allocated DKK19.5 million to support the National Land Commission, but only around DKK1 million has been disbursed so far. In 2009, a new two-year support term was accepted. The Danish Ministry of Foreign Affairs (MoFA) issued in October of the same year the framework document Support to Implementation of the CPA Sudan 2010 2011, the most recent policy document for Denmark's support to Southern Sudan with three immediate objectives: Support the CPA in the pursuant of a democratic system of governance Support peaceful co-existence through reconciliation and sustainable service delivery Access to protection and durable solutions for refugees and IDPs. The CPA and the Joint Assessment Mission (JAM) report constituted the bedrock of Danish Southern Sudan policy, although only a small amount (6%) of its overall budget was designated to the MDTF. Denmark followed a decentralised development approach, though formally the Embassy in Addis Ababa (subsequently taken over by Embassy in Cairo in 2007) held the development portfolio for Sudan. Between 2004 and 2009, Canada spent about CAD647 million for aid across Sudan with the two geographical core areas Darfur and Southern Sudan. Canada's comprehensive approach entails support to Sudan through several federal departments: Canadian International Development Agency (CIDA) supports humanitarian, reconstruction and longer-term development programs and policies; The Department of Foreign Affairs and International Trade supports immediate and transitional crisis response; and the Department of National Defence and the Royal Canadian Mounted Police are engaged in security, peacekeeping, peace building and policing. The policy priorities for support to Sudan were further developed in the Sudan Peace Building Concept Paper from June 2006, which proposed a narrow focus of the aid portfolio on a small number of clearly identified sectors. CIDA s humanitarian and early recovery programs are delivered through multilateral mechanisms such as the MDTF, UN agencies, and international and Canadian NGOs. Canada s whole of government strategy in Sudan was approved in February 2008, with three key areas of activity: Security (support for UN peacekeeping missions), Diplomacy (advocacy and peace building activities), and aid (humanitarian assistance and reconstruction). Canada s support includes a regional approach, which comprises programming in neighbouring states such as Chad and Uganda where instability has a direct effect on the situation in Sudan itself. 6 The 2009 review of results and achievements of the Canadian Sudan policy highlighted the importance of projects with a strong community focus and the necessity to provide visible peace dividends such as demining activities. Along with other donors, Canada faced difficulties in locating strong local NGOs as partners for implementation. Lack of capacity for consistent project design and poor practical experience hampered project implementation. Insecurity in Southern Sudan remains a key programming risk, as it reduces the ability of partners to reach their project areas and keep project timelines. 7 Canada is a member of the Joint Donor Team and coordinates its policy in Sudan with other international players through the Sudan Contact Group, which includes the US, the EU, the UK, France, Norway and the Netherlands. 6 See e.g. GPSF Sudan 2008-09 Annual Strategic Framework 7 Sudan Peace Building Results and Achievements, 17 July 2009 5

The Netherlands has developed a special interest in supporting Sudan. This is in line with general Dutch policies of increasing focus on fragile states in development cooperation. The CPA provided impetus to take up Dutch humanitarian and development activities in Sudan. Most of the larger Dutch NGOs operate in Sudan. Taking the JAM report as the basis for its strategy, the Netherlands has based its support to Sudan on a 50:50 sharing approach between Northern and Southern Sudan. At the same time a crucial gap in the transition from relief to development was identified, mainly because of an unstable security situation and missing infrastructure. Project implementation suffered from serious time constraints, as the necessity for quick impacts was high, but planning and implementation was hampered because of low capacities, missing administrative structures and nearly no local partners on the ground. The Embassy of The Netherlands in Khartoum plays a crucial role in the planning and monitoring processes for development activities in Sudan the 4-year plan, annual plans and the financial planning falls under its responsibility. The primary objective of the support to Southern Sudan is the full implementation of the CPA. The Dutch MoFA has supported the peace process through observatory missions and support for the negotiations in the forefront of the signing of the peace agreement. The Netherlands prefers pooled funding mechanisms including the MDTF and the Basic Services Fund. The Policy Framework Sudan 2007 2008 focused on the issue of economic growth as an important factor for reconstruction in Sudan. Additionally, the policy framework announces a decrease in financial contributions, using more technical assistance and capacity building as approach for support. The Multi-Annual Strategic Plan (MASP) 2008 2011 takes into account the difficulties for the peace process in Southern Sudan and the threats for the CPA implementation. At the same time, the MASP tends to rebalance attention from Darfur to the CPA by strengthening the AEC. Security in Southern Sudan is identified as a major concern for the stability of the whole country. The plan also accounts for an enhanced communication with the Arab States and China as well as with non-traditional donors like South Africa, Turkey Egypt and India, as they became important stakeholders in the Sudanese context. The JAM report was also the key document for Germany in its support to Southern Sudan, even more so as the responsible German Ministry at that time did not possess a specific country or regional strategy paper. At the donor conference in Oslo in 2005, Germany had earmarked an amount of 13 million ( 10 million for the national multi-donor trust fund (MDTF-N) for support to the GoNU, but made the disbursement of these funds dependent on a peaceful political solution of the Darfur conflict as well as an improved reporting on the human rights situation in the country. Support was hence implemented in the North primarily through NGOs in the areas of support to civil society, as well as development-orientated transitional aid and humanitarian aid. The MDTF-S has been supported between 2005 and 2007 with an amount of 10 million. Germany has additionally a joint chair together with the EC on the Oversight Committee for the MDTF-S. Moreover, the German Government funded a senior World Bank technical expert to oversee the implementation of projects in the water sector. Support for multilateral instruments was prioritised with an emphasis on the necessity for stronger donor coordination and the transparency on the disbursement of funds. The main objective of the German policy for Southern Sudan is sustainable reconstruction with focus on the water sector, decentralisation, administrative reforms and strengthening of institutional capacities. The German Federal Ministry for Economic Development Cooperation (BMZ) provided support to the repatriation and reintegration of refugees and IDPs through cooperation between GTZ and UNHCR as well as financial support to NGOs, which tackled basic health care, reconstruction, food aid and emergency aid for spontaneous returnees. Strengthening of decentralised state structures and the 6

interaction of state and society have been defined as main goals of the German engagement in Southern Sudan with the aim to improve legitimacy and accountability, which are seen as preconditions for a sustainable peace process. In 2008, the BMZ revised its Sudan policy, including the support for the CPA and bilateral cooperation with Southern Sudan. The German government issued a Position Paper in preparation for the Sudan Consortium meeting, relating to the OECD/DAC principles for international engagement in fragile states and the conclusion of the EU-Council EU Response to Situations of Fragility of November 2007. This was essentially a statement on Germany s future cooperation with (Southern)-Sudan. The document outlines the necessity to strengthen the development as well as the political process simultaneously. Additionally, the Ministry points out the need to combine security and development issues in Southern Sudan. Whereas the first aims on immediate stabilisation, the latter tends to work on the structural causes of conflict, including crisis prevention and the rule of law. Germany has thus contributed around 55 million to UN Mission in Sudan (UNMIS), with 38 additional military personal deployed to the mission in 2007/08. Demining activities in the Nuba Mountains have been supported with around 4 million since 2003. The German Ministry of Foreign Affairs also made contributions in the area of rule of law (supporting the police communication programme implemented by the GTZ) and security (support to the DDRprogramme). The United Kingdom programme for Sudan rapidly scaled up following the January 2005 CPA, to reach 133 million in 2007 08. Political developments in Sudan since 2005 have been the main influence on the strategic direction DFID has taken. Poor outcomes of the 2006 Darfur Peace Agreement meant that the July 2008 DFID Country Plan put the focus back on the CPA. The dominant issue was now the stability of the CPA and the pathway that leads from now to 2012 and beyond. DFID accepted the notion that the full implementation of the CPA was the best opportunity for resolving structural conflicts in Sudan. Moreover, the Country Plan was to be a test case for how DFID could engage effectively in a complex fragile state. The DFID Sudan office was established in Khartoum as early as 2006 to manage the UK program. In the South, the UK participated in the establishment of the JDO. Nearly two thirds of DFID funds were channelled through pooled funding, most humanitarian aid via CHF, and development support mainly via MDTFs. DFID intends to phase down its humanitarian aid from over 60% to less than 30% in its programme by 2010 11. The share of the UK spending via multilateral and pooled funding channels will further increase, complemented by bilateral spending. Service delivery will be supported entirely through pooled funds, despite a perception that considers performance of the pooled funding mechanisms as being comparatively weak. With the 2011 Southern Sudan Referendum approaching, the emphasis is on helping to consolidate the gains already made, while bolstering the institutional apparatus necessary for retaining peace whatever the outcome of the Referendum. From 2008 there was also a shift in the approach to conflict risk, which became more informed by analysis and the identification of key entry points. There was also a stronger effort to link peace agreement negotiation and implementation to the grass roots, and to encourage peace at the level of communities. This more societal approach is associated with a lower focus on central state structures, and better extension of the programs to mid-level administration. DFID has also strongly advocated reducing humanitarian spending in the South by scaling up spending on recovery and development. The UK government to date has been seen as one of the leading bilateral supporters of disarmament, demobilisation and reintegration (DDR) in Sudan and is watched closely by others in this and in security sector work including by the national commissions with whom it works on a regular basis. DFID is in the process of further expanding targeted support to peace processes including support to DDR, and to security 7

sector reform. These more targeted interventions have been designed to seize opportunities as the situation evolves, and bolster critical drivers of peace. USAID operated from Nairobi until 2006; since then a substantial expansion of staff in Juba can be observed. However, after the assassination of a USAID official and his driver in Khartoum in January 2008, USAID sought to reduce its footprint by decreasing the number of USAID staff and contracting out a number of basic functions to a subcontractor. While maintaining sanctions over Darfur, the US government, including USAID, was a major contributor to the IGADsponsored North South negotiations. Since 2005 US support has been provided mainly to implement the CPA. In October 2009, a new US policy was announced that emphasises diplomatic engagement with Khartoum. The objectives of the US support to Southern Sudan have been the strengthening of the peace process through activities such as census and elections, and support to the peace dividend through socioeconomic measures. The policy design for Southern Sudan is based on USAID's previous experience of working in Sudan and regular conflict analyses, of which the latest was conducted in 2003. A new conflict analysis is expected in 2010. The USAID policy is based on the following principles: The GoSS s priorities as a must (all USAID interventions fall within five of the six key priorities of the GoSS the sixth area is security, which is funded through the US State Department) No use of pooled funding. The US only works directly with the GoSS All programs pass through the IMAC All USAID partners are asked to use the GoSS protocol for implementation (which does not automatically imply the use of the GoSS systems and procedures). There is thus full policy alignment but still no room for sector budget support All projects are implemented using implementing agents such as the UN, NGOs and private contractors. USAID uses humanitarian and development assistance in parallel and focuses on coordination of interventions. In both Juba and Khartoum, the USAID missions are organised into five sector teams. In addition, the Office of Disaster Assistance (OFDA) provides humanitarian assistance from both offices. The Khartoum office handles the bulk of the administrative matters, however. Currently, all development assistance is carried out only in the Southern Sudan, due to USAID s interpretation of its legislative restrictions. Conflict analysis has been a key instrument in the design of the USAID portfolio. Continuity has been maintained in some programmes such as education. USAID has been involved in education in Southern Sudan since 2001 (Sudan People s Liberation Army controlled areas), and the engagement has continued since then. 3. International Agencies UNDP played a role in the Naivasha peace talks, and substantially increased its support to Southern Sudan as a consequence of this in 2003 and 2004. It is active in Sudan to support recovery efforts and state-building, which are core sectors of the UNDP mandate. There are three main strategic objectives of its activities in Southern Sudan: (1) to enhance good governance and the rule of law, (2) to reduce poverty and improve the Millennium Development Goals and (3) conflict prevention and peace building. Under these three main objectives, UNDP implements a 8

range of activities. UNDP implements projects funded through core funding as well as through earmarked funding from bilateral donors (including DFID, France and the EC) in partnership with the GoSS and NGOs primarily. In Southern Sudan, UNDP also administers the CHF, the Sudan Recovery Fund, and the Global Funds on HIV/AIDS (the latter with a budget of USD100 million). UNDP's substantive presence on the ground is supported by 2-3 staff members in each State of Southern Sudan, but the agency expects to triple this number in 2010 to enhance its focus on strengthening capacities for service delivery at the local level. Two shifts to the strategic approach were made in UNDP interventions since 2005. First, UNDP initially started with a substantive focus on decentralised service delivery and support to the capacity development of local governments. However, upon request of the GoSS, a shift of funding was made away from local government to central level capacity development. Secondly, in early 2009, an internal UNDP assessment of the situation in Southern Sudan was undertaken by the staff of the office. Two main conclusions came out of this: (i) the shift of focus to central level capacity development in 2005 had been too extensive and that enhanced focus was needed on developing the capacity of local governments to perform their duties. According to UNDP this step should have been taken already two years ago, but will now be implemented in 2009 and 2010. (ii) The UNDP programme has in the past been too broad to ensure substantive impact. As a consequence, the programme will now be focused on state-building and stabilisation for the remainder of the CPA period. Again, the focus will be on local government. UNDP is working with four cross-cutting issues: (1) Human rights and a rights-based approach, (2) gender, (3) HIV/AIDS and (4) environment. All programme appraisals in principle take these four issues into consideration. The interventions covered by UNDP support all four key categories of conflict prevention and peace building. Alignment in general is ensured by close cooperation with the GoSS in implementation but strategies of the GoSS are not used as guiding tool due to their current limited quality. 4. Non-DAC Donors It is widely acknowledged that the emergence of new actors in development efforts is challenging traditional aid and development cooperation 8. This is also the case in South Sudan. Donors include also non-dac countries like China, India and Arab states. Contrary to China and India, Arab donors are mostly not aid recipients themselves. Main Arab donors are Saudi Arabia, Kuwait and the United Arab Emirates. These countries have had cooperative agreements with Sudan since the 1970s, and Arab states have provided levels of funding exceeding the development contributions of many individual DAC donors. The overall aid volumes by Arab donors have been estimated to be in the range of USD2 3 billion a year, mainly from Saudi Arabia. 9 Arab donors mostly provide assistance bilaterally in the form of loans, with at least 50% being channelled through Arab multilateral agencies. Such agencies have been built up over the years in such a manner that their cumulative contributions are greater than the bilateral national aid agencies of individual Arab countries. Already in 1976, the biggest Arab donor fund in Sudan, the Arab Fund, proposed a programme to develop Sudan as a breadbasket for the Arab world and 12 Arab states established the Arab Authority for Agricultural Investment and Development in Khartoum to implement the plan. Likewise, the mid-1970s saw the Saudi 8 See also Grimm, S, J Humphrey, E Lundsgaarde, S Lea and J de Sousa (2009) European Development Cooperation to 2020: Challenges by New Actors in International Development, EDC 2020, 7 th Framework Programme, No 4, May 2009 9 Manning, R (2006) Will Emerging Donors Change the Face of International Cooperation? Lecture at the Overseas Development Institute, UK, 9 March 2006 9

Development Fund become the largest source of investment capital in Sudan. 10 A further boost in Arab funding followed the 2005 signing of the CPA. The Arab Fund confirmed in 2007 that they were starting up several new projects in Sudan in order to support the peace process. However, political, commercial and religious interests are often predominant when providing assistance; unlike Western donors long history of tied aid and preferences towards major potential importers. Arab donors have chosen not to participate in the aid policy debate that has been so important to Western donors. China 11 exercises increasing economic and political influence in Africa in general and in Sudan in particular. Sudan is China s third largest trading partner in Africa. In turn, China is Sudan s largest trading partner, since it purchases 71% of Sudan s global exports, the majority of which constitutes oil. The Chinese approach to foreign relations is termed non-interference in domestic affairs. However, it seems that China s foreign policy is evolving as it realises the need to protect its economic interests. Western commentators vociferously complain that Chinese aid and trade have undermined pressure on the Sudanese government to end the crisis in Darfur. Promulgating a focus on negotiation and dialogue, respect for sovereignty, and the use of tripartite mechanisms of the UN, the African Union (AU) and the Sudanese government, China s efforts to end the conflict and to ensure the presence of a joint AU UN peacekeeping force have been even recognized by the United States as very constructive. China also contributes peacekeepers to both UNMIS and UNAMID. 12 As China's economy grows rapidly and with it the need for greater energy resources the development cooperation effort is clearly linked to a domestic agenda. China emphasises that its aid programme is South-South cooperation, and rejects the idea that it is a donor. Thus there is no distinction between aid and trade and investment, with China preferring instead to refer to the different elements of the economic relationships with Africa. Chinese involvement is characterised by its non-conditionality, aid tying and a focus on projects. Expenditure levels are rising rapidly, even if still low compared to leading Western development agencies. Much of Chinese investment is disbursed in the form of technical assistance projects, with a particular focus on infrastructure. Loans are provided on the basis that they are spent on development, predominantly through Chinese companies, and with very low interest rates. The Chinese state-owned oil company, China National Petroleum Company (CNPC), is the largest stakeholder in Sudan s biggest energy consortium, the Greater Nile Petroleum Operating Company, through its 40% stakes. Chinese companies are also active in other energy-related sectors of Sudan s economy. These activities include the construction of oil pipelines, electricity and hydropower facilities, as well as infrastructure development. CNPC attaches importance to the social and environmental impact of its oil activities, and invest in public welfare through Community Development projects in the oil areas. Nonetheless, all major companies in Sudan have been criticized by local and international NGOs in recent years for paying inadequate attention to the social and environmental problems associated with the oil industry. China maintains a close relationship with both governments in Sudan. Realising the possibility of Sudan splitting into two countries after the 2011 Referendum, China is determined to tap into greater economic potential from the underdeveloped region and to protect its economic interests in the area, and opened its Consulate in Juba in 2008. China has a Special Envoy, who regularly 10 US Library of Congress Country Studies 1991 11 See also Woods, N (2008) Whose aid? Whose influence? China, emerging donors and the silent revolution in development assistance, International Affairs 84: 6 (2008) 1000 1000 12 UNAMID, United Nations African Mission in Darfur 10

talks to Khartoum and Southern Sudan leaders to look for cooperation opportunities and protect business interests. China has also decided to assist Juba with the implementation of the peace process, particularly in the area of coordinated development of Southern Sudan to enhance development. Moreover, China is also prepared to fund a series of development projects in Southern Sudan, including hydroelectric facilities, roads, housing, stadiums and cultural centres. 13 India has a much lower cooperation profile with Sudan in comparison to China, however with significantly increasing dynamics. Similar to China, India believes in the non-interference in domestic affairs. The Indian cooperation programme is explicitly linked to its own foreign policy interests and the search for resources. Like China, India is also looking for new markets for their products. 14 India invests into energy and manufacturing sectors, with the state-owned company Oil and Natural Gas Corporation of India-Videsh being one of the key foreign companies involved in Sudan s oil industry. India refers to its engagement in Sudan in terms of economic cooperation and development projects. Besides investment in various sectors, there are four strands of Indian cooperation with Sudan: Capacity building/training in IT-related fields through the Indian Technical Cooperation Programme, by which last year 170 scholarships were made available for Sudanese from the GoSS and GoNU, NGOs and private sector. Grants and project specific soft loans, with a low interest and very long duration (5 10 years). The provision of soft loans is based on the requirements that projects are implemented by Indian companies, with materials imported from India. India has contributed to a variety of development projects especially in the five priority sectors: infrastructure, agriculture, human resource development, information and communications technologies, and small and medium industries. During the Oslo conference, India pledged USD100 million in soft loans for various projects, and USD10 million in grants. India has not made a new pledge since 2005. Relief support, which is needs based, and directly provided to the GoNU and the GoSS on a 50/50 principle. Specific request based projects (India for instance also trains Sudanese diplomats at the Foreign Service Institute in New Delhi). India does not contribute to the MDTF or other pooled funding mechanisms, and prefers to work on a bilateral basis with both governments and local agencies, believing that multilateral forums are too costly in terms of administration. It also prefers to give loans, rather than grants believing it is better to give them the techniques how to fish, rather than give them the fish. Soft loans allow Sudanese people to work, rather than depend on others, and at the same time it allows India to provide opportunities for its own companies. India believes in the unity of Sudan and engages with both the GoSS and GoNU. As the first Asian country, India opened a Consulate in Juba in 2007. India also provides soldiers to UNMIS and participates in UN and other multilateral forums. 13 Walters, D (2010) Sino-Sudanese Relations: The Importance of Oil and the 2011 Referendum 14 cf. Joshi, S (2007) India s relations with Africa - Practice and Potentials from an Indian perspective. Manuscript (unpublished), Deutsches Institut für Entwicklungspolitik/ German Development Institute (DIE): Bonn; Chaturvedi, S and Mohanty, S K (2007) Trade and Investment: Trends and Prospects, South African Journal of International Affairs, special issue on India in Africa, 14, 2: 53-69; Alden, C and M Davies (2006) A Profile of the Operations of Chinese Multinationals in Africa, Volume 13, Issue 1, Summer/Autumn 2006 11

Malaysia refers to its cooperation with Sudan, and Africa in general, as South-South cooperation. Malaysia supports the implementation of the CPA in line with the international donor community and through the Organisation of Islamic Countries. It has also recently started a dialogue with traditional donors in Khartoum on political and development issues. Malaysia provides support in the form of capacity development and conflict resolution and engages with both the GoNU and GoSS. It does not participate in any of the pooled funding mechanisms, but implements project on a bilateral basis and mainly through the leading Malaysian NGO Mercy Malaysia. Malaysia furthermore offers technical training programmes for Sudanese officials within the scope of the Malaysian Technical Cooperation Programme. Malaysia also heavily invests in Sudan s oil industry with its state-owned company Petronas as one of the three main oil companies present in Sudan. Japan s role in Sudan focuses on diplomacy and development. Japan has a good relationship with the GoNU and engages in political dialogue (mainly in the North). Japan supports political processes such as elections and DDR (only focusing on reintegration, as Japan does not provide any military support), however its key focus is on the creation of peace dividends through humanitarian and development assistance. At the Sudan Donor Conference in Oslo (2005), Japan pledged to contribute USD100m for the consolidation of peace, which was surpassed in February 2008, as Japan had implemented USD230m already at that time. At the Third Sudan Consortium Conference in 2008, Japan pledged an additional USD200m. Japan provides support on a bilateral basis, and mainly focuses on development projects in Southern Sudan. It does so through its implementing agency Japan International Cooperation Agency (JICA), which has been working in the South since the 1980s. Japan does not contribute to MDTF or other pooled funding mechanism (although Japan takes an observer position in MDTF North). It is not convinced that the MDTF is moving quickly, and implementation of projects lacks visibility or means for intervention and accountability. Instead, bilateral engagement allows for better relations with the government. JICA does not cooperate with USAID or DFID, but does work together with a number of UN agencies including UNDP and UNHCR. JICA supports projects in five main areas: education, health, water resources and disaster management, transportation and agricultural/ rural development. Japan is also involved in the Three Areas, and takes part in the Donor Working Group on the Three Areas. Japan is the second largest oil importer for Sudan (oil is not purchased directly from the Sudanese government, but from China). 12

Appendix 1: List of Abbreviations AEC AU BMZ CHF CIDA CNPC CPA DAC DDR DFID DKK EC EDF GoNU GoSS GTZ IDP(s) IGAD IOC JAM JDO JDT JICA MASP MDTF MoFA NGO OFDA ROI UNDP UNHCR UNICEF UNIFEM UNMIS USAID Assessment and Evaluation Commission African Union The German Federal Ministry for Economic Development Cooperation Common Humanitarian Fund Canadian International Development Agency China National Petroleum Company comprehensive peace agreement Development Assistance Committee Disarmament, Demobilisation and Reintegration Department for International Development (UK) Danish Krone European Commission European Development Fund Government of National Unity Government of Southern Sudan German Technical Cooperation Internally Displaced Person Inter-Governmental Authority on Development Interim Oversight Committee Joint Assessment Mission Joint Donor Office Joint Donor Team Japan International Cooperation Agency Multi-Annual Strategic Plan Multi-Donor Trust Fund Ministry of Foreign Affairs Non governmental organisation Office of Disaster Assistance Regions of Origin Initiative United National Development Programme United Nations High Commission for Refugees United Nations Children s Fund United Nations Fund for Women UN Mission in Sudan United States Agency for International Development 13