The sanctions raise important questions: Is this enough action from the United States? Was this the right strategy? What more should be done? EJ Hogendoorn and John (JP) Prendergast are two leading experts on the conflict. They’ve worked for U.S. Special Envoys to Sudan, run U.S. interagency processes on Sudan, negotiated with Sudanese leaders, and worked for the same international NGO – but they have different views on the way forward. The dialogue below highlights their ideas and puts them in debate with each other.

 John “JP” Prendergast: EJ, we largely agree on the causes of Sudan’s implosion, but we have a major divergence on what to do about it. Since much has been written already about the causes, and very little about solutions, I’d love to dive into the substance of our policy disagreements and see if we can help shed light on some serious options for what can be done about Sudan’s metastasizing crisis.

I’d like to start with what should be the fundamental objective of U.S. policy. Of course, we agree that the United States – working with key allies – should continue to do all it can to secure a humanitarian ceasefire, though current efforts have yielded little in that regard. But I don’t think the only objective of U.S. policy should be another framework agreement between the armed factions creating a transitional administration leading eventually to a civilian-led, democratic government. Such an agreement, based on a hope and a prayer, would allow the warlords currently tearing the country apart to have time to consolidate their positions while international attention eventually shifts away from Sudan, giving them the opportunity to undermine any such transition down the road. Thus, I think U.S. policy should instead be aimed at undermining and ultimately dismantling the kleptocratic cabals run by the two principal warlords – General Abdel Fattah Burhan, who heads the Sudan army (SAF), and General Mohamed Hamdan Dagalo (known as “Hemedti”), the leader of the paramilitary Rapid Support Forces — who have built up huge commercial monopolies and hijacked Sudan’s government and economy.

EJ Hogendoorn: JP, I agree that the ultimate objective should be an accountable, democratic government – which most Sudanese want – and that many of Sudan’s current elite are undermining this objective to protect their positions and ill-gotten wealth. It will be the task of a transitional government to prepare for a credible election, draft a constitution for this new government, and put in place the institutional reforms that limit the power of the kleptocratic old guard, begin to address corruption, and create a level economic playing field necessary for the country’s economic development.

Where we diverge is how we get there. My first concern is to quickly and sustainably stop the fighting. If we do not do so quickly, I fear that we could have an entrenched, multifaceted civil war that would be an unmitigated humanitarian catastrophe, destabilize the region, and produce an even more massive surge of refugees—so far 1.4 million Sudanese are displaced, with hundreds of thousands of refugees in neighboring Egypt, Chad and Ethiopia. I would argue that focusing first on dismantling kleptocratic networks would detract from the effort to stop the fighting and can be deferred until we get to a transitional government. We have both seen this civil war scenario before in Sudan, and in the region. It will take time to dismantled corrupt networks – time we do not have.

JP: Of course, stopping the fighting should be priority number one, but frankly that could take months if not years, given how committed both sides are to the death spiral they’ve put the country into. I fundamentally don’t believe that there can be a stable, somewhat peaceful transition to a democratic government that involves the current leaders of the two warring parties. And there is no way these warlords can be sidelined without finally, for once, going after the kleptocratic networks that have cemented this violent autocratic system in place.

The U.S. government doesn’t have to lead the peace negotiations, as it has been doing with Saudi Arabia – unsuccessfully, I might add. There are plenty of regional powers who have a demonstrated capacity to manage a negotiations process, such as Kenya, some of the Gulf states, or the African Union. I believe the comparative advantage of the U.S. would have it play a different role. The U.S. is uniquely positioned to lead what USAID calls a “dekleptification” strategy, aimed at dismantling or at least undermining the corrupt system over which the warlords are fighting. For years the U.S. has helped lead mediation efforts in Sudan, and look where we are. The system in Sudan is “too deformed to be reformed,” as many Sudanese have argued throughout the years.  While engaged in deep mediation, the U.S. diplomats leading these efforts have argued against using the targeted financial tools of pressure that could address the corrupt system, worrying that such escalation would undermine U.S. negotiating access.

Sudan’s military leaders will not hand over power to civilians, will not diversify the economy, will not stop using extreme violence and repression to maintain the status quo, and will not move in any positive direction unless their calculations are altered through painful financial consequences.

That is why the Biden administration’s sanctions package is so important.  Finally, a price will be paid for profiting from immense human misery.  But this should just be a first step in an escalating strategy of financial pressure on the leaders of these warring parties and their commercial interests.

EJ: JP, I agree with your concerns about the structural problems with the Sudanese state, which have led to chronic armed insurgency. However, I think that we should sequence the application of financial pressure more strategically, and if we do so we can stop the fighting in Khartoum quite quickly. The Rapid Support Forces (RSF) is a mercenary force that was able to grow rapidly because its leader, Mohamed Hamdan Dagalo better kown as Hemedti, gained control of several gold-producing areas in Sudan and because the Gulf states paid him millions of dollars a month for the RSF’s services in Yemen, fighting the Houthis. His troops fight for money, not a purpose, and many will melt away if they are not paid their salaries. Note that one of the companies sanctioned by the U.S. is Al Junaid Multi Activities, controlled by Hemedti’s family, which is heavily involved in gold production and export, particularly through the Dubai Gold and Commodities Exchange in the UAE.

I have a rough logic and timeline that I would argue could be the basis for a strategy to end the conflict and put Sudan back on the right path. Right now, the two “armies” are relatively equal, although the Sudan Armed Forces (SAF) have the advantage in heavy weapons and likely Arab support. I hope we both agree that a stalemated conflict would be the worst outcome, because it would lead to a long and bloody war. More controversially, I contend that to end the conflict quickly we should help one side prevail by applying more financial pressure on the other.

Because of the rough balance of power between the two forces, I maintain that the least bad option for external actors is to help the SAF by focusing more attention and financial pressure on the RSF-affiliated companies. Importantly, this pressure would need to be applied by the U.S. and its Gulf partners, particularly the UAE and Saudi Arabia, where the RSF has very large bank accounts and business interests. Once the RSF realizes that it is losing, it will hopefully agree to peace and quickly integrate into the SAF. After all, an effective government cannot have two independent armies.

Then negotiations to restore a civilian government-led transition would resume. In this phase, external actors would put more financial pressure on the SAF to honor its pledge to hand over power. I think one lesson from the current fighting and Sudan’s history is that a military dictatorship cannot stabilize the country and would lead to more armed unrest. Once a civilian government is restored, it could focus on drafting a permanent constitution, preparing for elections, and initiating a few economic reforms designed to limit corruption and put the economy back on track. Last, but not least, elections would be held in 1-2 years, leading to a fully mandated and legitimate government that can institute more reforms.

JP: Ironically, until recently, my colleagues and I at The Sentry had been arguing exactly that, ever since former Sudanese President Omer al-Bashir was overthrown in 2019. The RSF’s role in Darfur’s violence, its killing of protesters in Khartoum, its open alliance with Russia’s Wagner Group and Libyan warlord Khalifa Haftar (among others), and its violent monopolization of gold smuggling out of Sudan made its leadership a prime candidate for Global Magnitsky or other types of targeted sanctions. But over the past year, it has become screamingly obvious that General Burhan and the army leadership are as opposed to a democratic transition as General Hemedti and the RSF leadership. So, a pox on both houses is in order.

Both the RSF and the SAF are the main opponents of a civilian-led democracy. They both have built monopoly control over key sectors of Sudan’s economy, and they both are responsible for mounting war crimes with each passing day. I do not believe the U.S. should take sides in this conflict. I think we should be leading international efforts to impose network sanctions on the leaders of both cabals, their shell companies, and their enablers and facilitators in the international financial system.

In fact, the U.S. should take a side, just not the one you are proposing. We should be ramping up support for the extraordinary pro-democracy people’s movement that for years has worked for systemic change in Sudan, including the neighborhood-based Resistance Committees. The absence of civilians in the current process and the emphasis on accommodating the interests of those with the biggest guns simply empowers and entrenches the warlords and moves Sudan further away from any chance at stability and decent governance.

EJ: I agree that the leaders of both the RSF and the SAF have a lot to answer for and that the end goal is to empower the millions of peaceful protestors who have sacrificed so much to achieve “freedom, peace and justice,” but again, I would argue that the priority is to stop the fighting before Sudan collapses into a patchwork of warlord-controlled fiefdoms. We have both seen how long civil wars can last, even when sanctions are applied and without other countries fueling the conflict, and the enormous humanitarian toll of even a simmering civil war. Neighboring South Sudan is a case in point. A United Nations arms embargo and targeted sanctions – admittedly not well enforced by the region – have not stopped chronic armed conflict or a steadily growing humanitarian crisis. The U.N.’s Office for the Coordination of Humanitarian Affairs (OCHA) estimates that 9 out of its 11 million people require assistance. Therefore, I contend that we first end the fighting quickly by tipping the scales against the RSF. Then we threaten network sanctions so that the military does hand power over to a civilian government, as it promised, and apply them if it does not.

JP: The problem with the idea of a quick end to the fighting is that the mediators have very little leverage left, which I believe needs to be rebuilt using rapidly escalating targeted network sanctions on the competing cabals that are destroying the country, building on the Biden administration’s June 1 sanctions. So, it isn’t just about creating some accountability for the enormous financial and human rights crimes committed by both parties. It’s also about rebuilding leverage over time to support the forces of peace and democracy inside the country in their efforts to achieve fundamental system change. That kind of a serious financial leverage strategy is certainly not what has happened in South Sudan, where occasional sanctions with half-hearted enforcement simply embolden the warlords. If we are serious about supporting long term peace and stability in either country, the U.S. needs to bring out the kind of policy tools of financial pressure it uses for higher-order crises around the world.

EJ: I agree that for the Biden administration’s June 1 sanctions to be effective, the U.S. must employ determined high-level regional diplomacy to convince other partners, in particular the UAE and Saudi Arabia, to also apply those sanctions and ideally additional financial pressure to end the fighting between the RSF and SAF. The U.S. can – and should – argue that Sudan’s long-term stability requires a quick end to the fighting, a single professional military and an inclusive and accountable government.

Ending the fighting will require starving Hemedti and the RSF of money, which pays for its troops and arms, so that it can no longer fight the vicious, high-intensity conflict that is destroying Khartoum and risks collapsing the Sudanese state.  Forcing the RSF out of Khartoum would not only be a major humanitarian achievement but also would lay the groundwork for much more productive negotiations, which must also address Sudan’s two army problem.

To get to a single professional army will require the RSF merging into the SAF, which again can only happen if the SAF gains the military upper hand. If the U.S. and partners apply equal pressure on both the RSF and SAF, they may get a ceasefire but will do little to change Hemedti’s calculations or willingness to relinquish control of the RSF.  A return to the status quo ante bellum, with two large independent armies, would only create the conditions for another war.

This is not to say we should give the SAF the upper hand and then hope for the best.  To get an inclusive and accountable government, Sudan needs to move away from military rule – which has never stabilized the country since independence – and towards an elected government that has a broad mandate to carry out the structural reforms that we agree are necessary to address the center-periphery grievances that have fueled decades of insurgency. Only then can Sudan, and the region, stabilize and prosper.

IMAGE: Smoke billows behind buildings in Khartoum, Sudan, on June 4, 2023, as fighting between the country’s warring generals enters its eighth week. (Photo via Getty Images)

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Yet instead of focusing on the wellbeing of the South Sudanese people, the international community continues trying to broker deals among elites. Well-intended or not, this choice has paved a road to a living hell. South Sudan, which for years already has generated the largest refugee crisis in Africa, is on the verge of returning to full-scale civil war. War crimes are being committed in more and more places. Rape has become a routine weapon of war.  Looting of humanitarian aid and attacks on aid workers are on the rise.

Clearly, the international community — led by the United States and its Troika partners Norway and the United Kingdom, with the backing of the European Union and other key supporters of South Sudan like Australia and Canada — needs a new approach.

The warring parties have signed one peace agreement after another since 2014, some internal to the fractured ruling party, and some brokered by regional bodies. The most recent and most ambitious deal was signed in 2018, but relatively few of its terms have been implemented. The relationship between President Salva Kiir and his longtime rival, Vice President Riek Machar, remains volatile and full of mutual suspicion.

Peace processes and elections have legitimized Juba’s feuding leaders and put them into positions where they could violently plunder the resources and assets of the country, further centralizing control of political and economic power. They steal the proceeds from the nation’s primary source of revenue,  oil, along with everything else, while the international humanitarian system places huge Band-Aids over gaping human rights wounds by providing hundreds of millions of dollars a year in emergency aid while not addressing the underlying drivers of mass atrocities. But the strain on global food supplies and fuel deliveries due to Russia’s all-out invasion of Ukraine this year is causing that Band-Aid to weaken and will likely mean that many more South Sudanese will die this year of sickness and hunger.

These same leaders have gutted the basic levers of governance in the country. The only essential services provided are those delivered by international organizations and their South Sudanese non-governmental partners. No transparency exists in budgeting or contracting, so most of the resources are stolen. The army, police, and intelligence services offer no security – in fact, most often the opposite, as they are the primary perpetrators of abuses and corruption. Nonpartisan voices, local peacemakers, women and youth leaders, and local journalists are ruthlessly suppressed, and there is no semblance of an independent legislature or judiciary.

South Sudan is a classic failed state. But it is a deliberate failure – the state works fine for those in charge. The networks in power have hijacked the state and intentionally fomented conflict between ethnic groups to singularly profit themselves. And little that the international community has done in the past decade-plus has seemed to change that dynamic appreciably.

The most urgent objective now should be to dismantle the violent kleptocratic networks that have overtaken South Sudan. This is a prerequisite before any peace deal can reduce the violence, before any election can deliver genuine representation, and before any government can create a properly functioning state.

The United States should begin by leading a full-fledged blitz on the networks controlling the security services and the presidency. The office of the presidency sits atop this criminal state structure, and the leaders of the security services are the enforcers — hit men and bag men for the leaders. The United States and its allies should impose network-based sanctions on Kiir, his inner circle, and the leaders of the National Security Service and its Intelligence Directorate, as well as their businesses, commercial partners, and facilitators; that would go a long way toward dismantling the warped incentives that undermine peace agreements and ensure continued conflict. To ensure history is not repeated, opposition faction leaders such as Machar should also be sanctioned for their own human rights abuses and corruption.

The United States, United Kingdom, and European Union have imposed sanctions on South Sudanese individuals and entities. These include corruption-related Global Magnitsky sanctions levied by the U.S. government. The United Nations Security Council also has sanctioned a handful of South Sudanese senior officials and imposed an arms embargo.

But these sanctions designations are much too few and far between. To influence the calculations of the key kleptocrats, a much more ambitious and escalating financial pressure strategy needs to be deployed.

Remember one of the key lessons from the neighbor to the north, Sudan: the international community mistakenly relied on the Sudanese military to do the right thing after popular protests led to the 2019 overthrow of long-time dictator Omar al-Bashir. The kleptocratic system Bashir had built was left largely untouched, and soon a new general was in charge. The international community applied little pressure, built no new leverage, and created no forms of accountability. Not surprisingly, the system quickly snapped back to an authoritarian kleptocracy. Why wouldn’t it? There were simply no consequences for hijacking the state.

In South Sudan, a complete onslaught on the opaque and illicit finances of its leaders is needed. Relying solely on yet another peace process and another election while leaving the underlying corruption untouched will only perpetuate South Sudan’s deadly history.

IMAGE: Displaced villagers and their belongings are seen along a road after being evacuated from flooded water in Juba, South Sudan on September 28, 2021. Thousands of residents were displaced as rivers overflowed with heavy rain across parts of the country. (Photo by PETER LOUIS GUME/AFP via Getty Images)

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Sudan’s civilian government and a broad cross-section of Sudanese civil society have recently called on the U.S. government to remove Sudan from its State Sponsors of Terrorism list. Many see such a move as the solution to reverse Sudan’s economic implosion, as the transitional government that emerged from last year’s toppling of dictator Omar al-Bashir seeks to move the country towards democracy. But the process required for delisting is widely misunderstood, the expectations for the results are exaggerated, and, most importantly, the real reforms necessary for economic recovery are grossly underappreciated. There are ways to achieve the goals Sudan’s pro-democracy forces have set for their country, but it will require multiple, methodical steps by both Sudan and the United States.

One myth is that the U.S. terrorist list designation prohibits or even criminalizes foreign investment. This is widely believed in Sudan and the idea has been perpetuated in recent articles. In reality, the terrorism listing triggers specific restrictions on the U.S. government’s foreign assistance to Sudan, bans defense exports and weapons sales, and controls the export to Sudan of dual-use items. The listing also prohibits exports to Sudan of certain agricultural goods and medical devices, but these bans have been almost entirely licensed away by the U.S. Treasury Department. Broader restrictions on banking and investment actually were removed when the United States lifted its comprehensive sanctions against Sudan in 2017.

A second myth is that the terrorism listing is the only barrier to debt relief in Sudan. Indeed, the listing does prevent the U.S. from voting in favor of International Monetary Fund (IMF) and World Bank debt relief packages and other multilateral loans and financing, but it does not prohibit any other country or group of countries from providing debt relief or aid. Even if the terrorism designation is lifted, IMF and World Bank policies on arrears will inhibit lending to Sudan.

There are also multiple myths and deep confusion surrounding the process required for removing Sudan from the State Sponsors of Terrorism list. The primary immediate obstacle to removal is the need for a negotiated settlement with the families of victims of terrorist attacks conducted with alleged material support from the former Sudanese government. Prime Minister Abdalla Hamdok indicated in December that his government is accepting responsibility for the actions of its predecessor and working on agreements with the families of those killed in the 1998 U.S. Embassy bombings in Kenya and Tanzania as well as the 2000 bombing of the USS Cole. Only when those agreements are reached, and as long as Sudan continues its counterterrorism cooperation with the United States, can the delisting process begin.

This is where the issue gets even more complicated. The delisting process mandates that the U.S. government conduct an in-depth, months-long assessment of whether Sudan continues to support terrorism and whether it is compliant with other benchmarks agreed upon by the two parties. Once that assessment has concluded and the determination is made to remove Sudan from the list, Congress has a 45-day window to block the move. The entire process will likely take several months.

The good news is that U.S. economic relations with Sudan are already showing signs of a thaw, as indicated by the agreement signed in December 2019 giving the Khartoum-based Nile Bank access to the U.S. technology giant Oracle’s mobile banking systems. While diplomatic relations with the U.S. continue to improve, with the countries agreeing last month to exchange ambassadors for the first time in 23 years,  a possible travel ban barring Sudanese from the United States would likely strain the relationship and hamper vital collaboration on counterterrorism.

Crucial Need for Reforms

Myths also surround the potential impact of delisting. When the comprehensive U.S. sanctions on Sudan were lifted in 2017, many Sudanese held false hope of immediate economic improvement. That recovery didn’t happen for a number of reasons, foremost among them the kleptocratic government that Bashir had created and the failure of the Sudanese government and banks to address corruption and money laundering. The terrorism delisting almost certainly won’t result in immediate economic improvement either.

For an increase in foreign investment to occur, Sudan needs to implement crucial new reforms, especially within the banking sector, that are prerequisites for sound foreign investment and aid spending. In early 2019, analysis from The Sentry on Sudan’s anti-money laundering regime revealed that the government’s efforts to counter illicit finance were woefully insufficient, and not enough has changed since then. Several Sudanese banks are majority-owned by companies controlled by security forces or other government entities and still run by former members of Bashir’s inner circle and by senior members of the military and security services, thereby creating conflicts of interest and avenues of abuse within the banking sector for criminals and corrupt actors. While there have been promising signs in the last month that the Central Bank of Sudan is working to address its deficiencies, banking supervision remains weak, and the Central Bank—despite issuing new directives on bank oversight—does not wield enough power to crack down on corrupt banks.

These conditions create real risks for foreign investors and international banks and will continue to be a deterrent to investment even after Sudan is removed from the terrorism list. The investment climate in Sudan is risky, given the systemic corruption, and international banks are wary of taking on clients in Sudan.

In fact, Sudan’s entire economic system is opaque, making it difficult or even impossible for banks to conduct customer due diligence on Sudanese clients and companies and to understand their risk profile. Greater transparency in the banking sector is essential to increasing foreign investment, and Sudan’s banks will need to engage directly with major international banks to demonstrate that the systems they have in place are sufficient for global banks to provide correspondent, lending, and other critical services.

A Way Forward

Despite these challenges, there is a way forward for Sudan to address the remaining issues and for the United States and other countries to increase support. First, Sudan and the United States must come to a quick and fair agreement regarding payments to the American families affected by Sudan’s support for terrorism.

Second, the U.S. government should accelerate the process of removing Sudan from the State Sponsors of Terrorism list. While it will take months to complete, there is no reason the U.S. can’t begin the delisting process immediately while the compensation negotiations continue.

Third, Sudan’s government must enforce existing anti-money laundering laws and transparently implement banking supervision reforms. These reforms are absolutely necessary to encourage foreign investment, and without them, the country will not see much in the way of economic improvement. Sudanese government and banking officials should also start to engage with, and attend meetings of, critical institutions in the banking compliance sector, such as the Wolfsberg Group, the Association of Certified Anti-Money Laundering Specialists (ACAMS), and the global anti-corruption forum to be held in Seoul in June 2020.

Fourth, Sudan must take specific action to address concerns in the gold sector, which is a major contributor to Sudan’s gross domestic product but is riddled with money laundering, illicit financial flows, and human rights violations.

Fifth, the United States, other concerned governments, the African Union, and the European Union should impose targeted network sanctions on spoilers of democratic and economic reforms. Particular focus should be on the security sector, where senior officials seek to maintain the corrupt, captured state constructed under Bashir. Such spoilers prevent economic competition, use private banks to launder illicit gains, and loot the natural resources of the country.

Finally, the United States should issue an anti-money laundering advisory to banks, similar to those it issued on South Sudan in 2017 and Nicaragua in 2018, warning banks of the increased risk of corruption proceeds traversing the U.S. financial system. The advisory could outline money laundering and corruption typologies that banks should be on the lookout for, update banks on the situation in Sudan, highlight areas of progress and risks, and promote public reporting of due diligence conducted by U.S. companies investing in Sudan.

If Sudan’s removal from the terrorism list occurs in conjunction with meaningful reform and clear communication and regulatory support from the U.S. government, the prospects for economic recovery will exponentially improve. With the extraordinary human capital and natural resource base in Sudan, sound economic policies and anti-corruption efforts could yield an era of unparalleled peace and prosperity in a war-weary country.

IMAGE: A currency exchange broker prepares a transaction at a brokerage in the capital Khartoum on January 21, 2020. The previous day, the Sudanese pound fell to 97 against the US dollar on the black market — compared to an official rate of just 47 pounds to the greenback. Sudan’s transitional government has prioritized turning around the economy and bringing peace to various conflict zones. (Photo by ASHRAF SHAZLY/AFP via Getty Images)

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