The hope of protesters in Khartoum, Omdurman, Wad Medani, Port Sudan and every other town where people have taken to the streets is that this time will be different. Despite the daunting odds and the unsuccessful record of protests in recent years, they believe the regime can, and will, fall. That popular action in the cities of the riverine centre will succeed where traditional opposition parties have failed. That where wars on the margins of Darfur, South Kordofan and Blue Nile remain mostly distant, classic economic strife will alienate those who have kept the regime in power or assented to its position. That shutting down the internet and shooting unarmed civilians on the street are signs of desperation. Fervent though those hopes are, there’s no guarantee that this time will be different. Only hope.
The government calculates it can outlast the protests, that its brutality will have few significant consequences in the long term, and that its economic stewardship should be judged on its management of the economy since 1989 (aka the hot dog and pizza thesis). And then, there is the argument that would please neo-liberals: ‘just following IMF directives’. To quote from the Fund’s Sudan: Selected Issues Paper, published in November of last year:
Fuel subsidies are not only fiscally costly, but also inefficient and inequitable; their removal would deliver substantial gains to Sudan…Less than full pass-through of international price increases to domestic consumers dilutes their incentives to improve energy efficiency and results in higher import costs.
Your average Sudanese might retort poverty is the best incentive for energy efficiency. Still, the IMF makes the argument slightly more convincing when it notes:
The leakage of subsidy benefits to higher-income households means that price subsidies are a very costly approach to protecting poor households. For example, every SDG transferred to the bottom income quintiles through price subsidies costs the budget almost 33 SDG.
And then barely a paragraph later does its best to lose sympathy for its argument by pronouncing:
Price subsidies are a passive approach to social protection and do not induce poor households to pull themselves out of poverty through their own efforts.
As if poverty was a lifestyle choice.
And the solution?
A successful reform strategy…requires an effective public information campaign that clearly sets out the shortcomings of subsidies, the fiscal risks and urgency for reform, and the details of a reform strategy that addresses the various policy challenges. This reform strategy should be (i) gradual to allow consumers to adjust their consumption and minimize the inflationary impact; (ii) sequenced to minimize the impact on poor households and allow time to strengthen the social protection system; and (iii) durable to avoid a recurrence of subsidies.
So, the IMF might quibble with the less than gradual means by which the subsidies were lifted, and judge the president’s ‘public information campaign’ efforts as insufficient. But the thrust of its advice is now government policy. Their economic models seem to have overlooked the cost of scores of destroyed businesses and petrol stations, the costs of (even more) repression and brutality and the blow to productivity with hundreds of thousands of days of school and work lost. And what price does the IMF put on the dozens of lives needlessly taken? And those still to be lost?
Further IMF conclusions might even amuse if they weren’t linked to the tragedy of the last few days:
International evidence suggests that the combination of large relative price increases and a lack of compensation programs and public outreach can lead to political unrest in a politically fragile environment.
And it’s also a question of how you read the report – elsewhere the same document notes:
international experience shows that most subsidy reforms occur without major civil unrest…
Chalk one up for the counter-factual cases of ‘international experience.’