Shannon Ding, Kelly Wyett, and Eric Werker
South Sudan: The Birth of an Economy
One can learn a lot about the economy of South Sudan just by watching the roads.
The first thing one notices on the streets of Juba, the capital, is the abundance of
white Toyota Land Cruisers. There are fewer than 100 kilometers of tarmac roads
in the entire 240,000-square-mile country; one cannot move around without a
four-wheel-drive vehicle. A closer look at the Land Cruisers reveals that most have
special license plates: UN for United Nations vehicles, and GOSS for those owned
by the government of South Sudan.
Apart from the Land Cruisers, one notices a large number of water and fuel
tankers on the roads. Publicly supplied electricity in Juba, a city of one million, 是
very limited, public water nonexistent. 因此, almost all workplaces and the
wealthier private residences rely on generator power and water delivered by truck.
The road traffic also reveals how waste is managed in Juba. Whereas some aid
agencies and hotels have contracts with garbage collectors, most waste is piled in
the streets and burned.
As in the big cities of many developing countries, driving in Juba is a daunting
经验. There are essentially no road signs or traffic lights, and only one street
has streetlights. What’s more, although traffic travels on the right side of the road,
most drivers sit on the right-hand side of the car, as most vehicles are imported
from Kenya, where right-hand driving is standard.
When we turn our attention to the people traveling on these highly informa-
tive roads, other issues become apparent. 一方面, there is no formal taxi net-
work in Juba. 反而, a few enterprising Kenyans and Ugandans have established
themselves as private taxi drivers. And foreigners do not dominate only low-skilled
service jobs; most heavy machinery on South Sudan’s roads is also operated by for-
Shannon Ding is a master’s degree student in public administration and internation-
al development at Harvard’s Kennedy School of Government. 在夏天
2011, she worked in South Sudan’s ministry of investment.
Kelly Wyett is a master’s degree student in public administration and international
development at Harvard’s Kennedy School of Government. During the summer of
2011, she worked in the Central Bank of South Sudan.
Eric Werker is an associate professor in the Business, 政府, & 这
International Economy Unit at Harvard Business School. His research explores the
economics of development and of developing economies.
© 2012 Shannon Ding, Kelly Wyett, and Eric Werker
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eigners, particularly Asians. 的确, the largest firms in most of the booming sec-
tors of the economy are foreign owned and operated.
Venturing outside Juba, one gets an idea of what the roads were like before the
recent bout of postwar reconstruction. 首先, South Sudan has few roads link-
ing small villages with larger towns, which leaves a large percentage of the popula-
tion completely isolated from the modern economy. Even where roads do exist,
they are unpaved, unevenly surfaced, and poorly marked. Traveling from the
northern border to the capital in the South, a journey of less than 1,000 miles, 能
take three weeks in a land vehicle, compared to two hours by plane. During the
rainy season, many places are completely cut off from road traffic. Malakal, 为了
例子, South Sudan’s third largest city, with a population of 125,000, essentially
grinds to a halt for three months of each year when its roads turn to sticky mud.
这段时间, people travel about in the same slow, tiring way they have for
hundreds of years: by foot or mule.
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South Sudan: The Birth of an Economy
Navigating South Sudan’s roads between cities and across borders is also rather
昂贵的, due to the numerous points where travelers are subject to extortion. A
committee recently formed by the country’s president found 44 authorized and 65
unauthorized tax collection points in just two states, Eastern Equatoria and
Central Equatoria.1
From its poor infrastructure and lack of regulation to skill shortages and cor-
破裂, doing business in South Sudan is not easy. 此外, the South
Sudanese do not produce any export goods. 然而, this observation overlooks
one major factor: despite the difficult conditions in South Sudan, the country is
experiencing a significant amount of economic activity. 在本文中, we discuss
the birth of a new economy in a society that has only recently emerged from a 22-
year civil war. The pace of growth so far has been fast but uneven: aid and oil
money is flowing rapidly into certain sectors, while other areas of the economy
that could generate jobs, particularly agriculture, have barely changed in centuries.
因此, the recent windfall of wealth has yet to translate into tangible benefits
for the majority of the population. In order to achieve growth in these other sec-
托尔斯, far more innovation is needed in both government policy and business strat-
egy.
This article is based on the findings of a study conducted from June through
八月 2011 by seven graduate students at Harvard’s Kennedy School of
政府, including two of the coauthors, on the emergence of entrepreneurs
and the private sector in South Sudan. Our team interviewed more than 200 人-
ple across South Sudan, including officials at six government ministries, two states’
agriculture departments, the UN Food and Agriculture Organization and World
Food Program, the managing directors of the country’s eight local banks, four cell
phone providers, and several hotels, restaurants, and supermarkets. We also visit-
ed five of the country’s ten states, where we interviewed farmers, retailers, whole-
salers, and traders and conducted informal observation. Unless otherwise indicat-
编辑, the information on challenges in the specific sectors is drawn from this
研究.
OUT OF CONFLICT, A NEW NATION
South Sudan achieved independence from Sudan on July 9, 2011, marking the end
of two civil wars that date back to 1955. The root causes of these conflicts can be
interpreted from many different angles, including race, religion, and postcolonial-
主义, but the primary cause is clear: compared to the North of Sudan, 哪里的
various ruling governments have historically based their power, the South was sig-
nificantly underdeveloped and its people marginalized—socially, 政治上, 和
economically.
It is difficult to provide a narrative of the conflict in simple cultural terms
because there is no “single people” in either the North or the South. Sudan as a
whole has a population of nearly 30 百万, with Arabic and Dinka speakers rep-
resenting the largest language cohorts. Other Sudanese speak 14 minor languages,
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which are further divided into roughly 100 dialects, 关于 50 of which are spoken
in the South alone. South Sudan’s complex society can be broadly divided into two
regional groups: the agro-pastoral and pastoral communities in the northern states
of Greater Upper Nile and Greater Bahr al-Ghazal, which have traditionally relied
on raising cattle as their main livelihood, and the sedentary agricultural commu-
nities found mainly in the equatorial southern states. The tribes that oversee these
communities have a wide range of governance structures. Two groups—the
Azande in Western Equatoria State and the Shilluk in Upper Nile State—are gov-
erned as formal kingdoms. The large pastoral societies that make up the majority
of South Sudan’s population, including the Dinka, Nuer, Murle, and Mundari, 有
a decentralized structure that consists of numerous independent but interlinked
clans and chiefdoms.
Until the 19th century, South Sudan’s economy was largely insulated from out-
side influences, due to the country’s impenetrable geography. Although Arab
traders from earlier Sudanic kingdoms in the north trafficked in gold and slaves
captured in the south, the south was generally unaffected by northern kingdoms
and resisted their expansion southward. Southern societies relied primarily on
subsistence agriculture and animal husbandry, and almost no efforts were made to
commercialize these activities. Many pastoral communities did not trade in cattle
or sell them for meat because of their symbolic role in defining kinship relations.
Even today, cows are the primary currency in establishing the price of brides, 和
exchanges of cattle occur primarily at marriages and other celebrations.2
South Sudan’s political economy changed dramatically in 1820 with the con-
quest of Sudan by Muhammad Ali of Egypt, which led the way for further exploita-
tion by outside forces and increased marginalization. Slave raids increased on a
massive scale, and Sudan’s new rulers demanded tribute in the form of slaves, 猫-
tle, and ivory. Not only were slaves employed in the army, as they had been in ear-
lier kingdoms, but for the first time, domestic slavery became widespread in the
北. The Anglo-Egyptian Condominium, which governed Sudan until 1956,
further contributed to inequalities between the North and South. The northern
and southern states were managed separately under different institutional arrange-
评论, as British administrators wanted to govern the South under an “African”
rather than an “Arab” model. Education was actually discouraged in some areas of
the South, particularly among pastoral communities, because British administra-
tors believed it distanced students from their tribal customs. Sudan achieved inde-
pendence in 1956 under a new government that, in theory, represented both
northern and southern citizens. 然而, southerners were significantly under-
represented in the new state: 的 800 government positions that had been vacat-
ed by the British, only four were allocated to southerners. 在 1955, aggrieved
southern army officers mutinied against the new government and started Sudan’s
first civil war, which lasted until 1972.
Sudan’s second civil war, which lasted from 1983 到 2005, was fought almost
entirely in the South. It caused significant civilian casualties and displacement and
destroyed nearly all social and physical infrastructure in the region. The discovery
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South Sudan: The Birth of an Economy
of oil in the South in the late 1970s played a pivotal role in igniting the second civil
war and complicated peace negotiations throughout the conflict, as both North
and South aimed to gain control over oil resources. Immediately after Chevron dis-
covered oil in Bentiu in 1979, the central government took a range of actions,
including changing the border so that Bentiu was in a northern state. It offered
concessions to Chevron and Total in the South and designed pipelines and refin-
ers that were to be built in the North. Southern leaders interpreted these actions as
attempts by the North to seize control of Sudan’s oil wealth. The southern rebel
army, the Sudanese People’s Liberation Army, aimed many of its initial campaigns
at the oil fields, which forced the foreign companies to suspend operations.
Government forces regained control of the area in 1991 and began exporting oil in
1999; this provided the government with additional revenues, which it used to
modernize its army and thus prolong the fighting.
On the ground, the fight for control of oil led the northern armies and militias
to use brutal scorched-earth tactics to clear out nearby populations. Fighting with-
in various factions of the Sudanese People’s Liberation Army also contributed to
the death toll. Out of a total population of ten million in the South, an estimated
two million people died directly due to the conflict or from the resulting famine
和疾病; another four million were displaced. The second civil war ended with
the signing of the Comprehensive Peace Agreement in 2005, under which the
South was to be governed as an autonomous region for six years and oil revenues
were to be split evenly between the two sides. In a January 2011 referendum, near-
莱 98 percent of the population of the South voted in favor of secession, 哪个
resulted in their officially gaining independence in July that year.
OIL AND AID MONEY GIVE BIRTH TO A NEW ECONOMY
South Sudan emerged surprisingly wealthy from its vicious civil war. Initial esti-
mates from the South Sudan’s National Bureau of Statistics (SSNBS) put per capita
gross domestic product at $1,546 在 2010.3 然而, 71 percent of this wealth, 或者 $9.5 十亿, came from oil exports, and because foreign investors and the north-
ern region received a large portion of the oil revenues, the per capita gross domes-
tic product for each southerner was significantly lower, 只是 $984. The remaining revenues accrued to the southern government, so that oil money made up 98 每- cent of the government’s 2010 budget.4 South Sudan’s other key source of wealth is foreign aid. Since the signing of the Comprehensive Peace Agreement, the country has been flooded with aid money, 包括 $524 million dispersed by the Multi-Donor Trust Fund, which is admin-
istered by the World Bank.5 Donor agencies spent more than $1.1 十亿 2010 在 395 separate projects in South Sudan,6 half of which were related to health, social development, or humanitarian assistance, although the most expensive were infrastructure projects. The total aid spent was equivalent to $134 per person, 或者
大致 14 percent of the average per capita income of $984. This is more than double the average amount of per capita aid for the rest of sub-Saharan Africa.7 innovations / 体积 7, 数字 1 77 从http下载的://direct.mit.edu/itgg/article-pdf/7/1/73/704879/inov_a_00117.pdf by guest on 08 九月 2023 Shannon Ding, Kelly Wyett, and Eric Werker However, this windfall of oil and aid money has not come without a price. Whereas most economies develop and grow over a long period of time, the rapid inflows of wealth have meant that, in little more than a decade, South Sudan has transitioned from an agro-pastoral society to being part of the modern global economy. 因此, its economic growth has been haphazard and highly concentrated in a few sectors. The private enterprises that have arisen in South Sudan exist almost solely to serve those with oil or aid money—that is, the government and NGO sectors. Companies active in Juba’s construction and service sectors are booming as result of this spending, and with demand from these external sources outstripping sup- 层数, existing firms can earn extremely high profits. 相比之下, with more than 50 percent of the population living on less than $1 a day, private demand from the
local population is almost nonexistent.8 As a result, firms have little to gain by
tending to the needs of the majority of the population.
South Sudan’s economy is also starting to exhibit the symptoms and challenges
associated with the “natural resources curse”,9 which are exacerbated by the large
aid inflows. These problems include macroeconomic volatility, crowding out other
行业, poor institutions, and civil war. Each deserves brief consideration.
Macroeconomic volatility
South Sudan is extremely dependent on two volatile income streams: oil and aid.
Oil prices are historically uncertain, as is the South’s ability to export oil using
northern pipelines and processing facilities. Aid income is not guaranteed to con-
tinue indefinitely, and it may decline as the glow of independence begins to fade in
the face of allegations of corruption and income mismanagement. 而且, as aid
and oil are the only real sources of hard currency, their volatility leads to uncer-
tainty in the exchange rate. Before independence, this uncertainty played out in the
black market for U.S. 美元. The black market price for dollars averaged around
30 percent higher and was more volatile than the official exchange rate.10 The price
swings reflected rapid changes in sentiment, as well as the central bank’s ad hoc
dispersion of dollars. 例如, fear of civil unrest drove up the black market
price of dollars dramatically in both the lead up to the referendum and at the time
independence was secured.11
Crowding out other industries
The large inflows of oil and aid money are putting pressure on South Sudan’s
exchange rate and domestic prices. Scarce supplies of human, physical, and finan-
cial capital are drawn toward the few industries that have access to new money,
which leads to higher prices. Demand from employees of aid organizations, 为了
例子, has led to higher prices for amenities such as hotels, restaurants, 和
taxis; basic goods such as fuel and clean water; and business-related needs such as
skilled labor and office facilities. 的确, prices are higher in Juba than in any
neighboring country, and they continue to rise. The SSNBS recently published an
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South Sudan: The Birth of an Economy
inflation estimate of 80 percent for the year ending May 2012. Inflation is also
related to the closure of the North-South border. Imports from Kenya and Uganda
must now travel farther and pass through multiple taxation points at the interna-
tional border. 此外, input prices are high and output prices are uncompet-
itive on world markets, due to the appreciating exchange rate. This phenomenon
means that there are few incentives to invest in South Sudan’s other industries.
Poor institutions
South Sudan’s oil wealth is hampering institutional development. The key reason
for this is that the potential to earn high profits by exploiting resources creates a
political contest for ownership of these resources. Public organizations therefore
tend to concentrate on capturing existing rents rather than on motivating people
to create wealth, promoting equality, and fostering a civil society.12 Oil money in
particular is contributing to weak macroeconomic institutions. 例如, 贫穷的
management of government oil revenues has contributed to procyclical fiscal
spending. As oil revenues have risen in recent years, so too has fiscal spending. 油
revenues doubled between the setting of the provisional and revised budgets for
2008, but rather than saving this windfall, the government simply revised the
budget to allow for a similar increase in spending.13 In fact, we learned through our
interviews that the process of public budgeting is simply a formality and that
money is spent as soon as it comes in.
Volatile oil revenues also hamper monetary policy. Before independence, 油
revenues numerated in U.S. dollars were sold to banks and foreign exchange
bureaus at the official fixed rate, which provided multiple opportunities for cor-
破裂. We observed that at least a dozen foreign exchange bureaus are located
within two blocks of the central bank in Juba, yet none of them ever seemed to be
selling dollars to the public. We were told that money was instead recycled to black
market sellers, who were conveniently located within the same two-block radius.
The scope of corruption has recently declined, as the central bank has issued a new
currency and now uses a managed-float exchange rate and competitive auctioning
of foreign exchange. 然而, the central bank does not have sufficient reserves to
counter any significant decline in oil revenues. 的确, one informant told us that
in July 2011, these limited reserves were being used to pay government salaries.
Civil war
最后, as mentioned earlier, oil wealth no doubt played a key role in the recent
civil war. Perhaps this was the most damaging aspect of the natural resource curse
for South Sudan. Going forward, the lure of oil wealth is unlikely to reduce the
potential for conflict. 的确, history suggests that where a valuable natural
resource such as oil or diamonds is there for the taking, it will more likely inspire
factions to fight than encourage a substantial influx of labor and capital invest-
ment.14 As demonstrated in Sudan’s second civil war, oil wealth may lead to more
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Shannon Ding, Kelly Wyett, and Eric Werker
intense fighting, as factions now have the financial resources to procure more
weapons and sustain the fighting for longer periods.
THE DEVELOPMENT OF THE PRIVATE SECTOR: A CHRONOLOGY
Firms in South Sudan are rapidly developing to meet the new demand created by
oil and aid money. While only 300 firms were founded in the entire decade of the
1990s, 多于 2,000 were formed in the first six months of 2010. 然而, 这
majority of these are micro-enterprises that employ fewer than five people. If we
focus on larger enterprises—those with more than 20 employees—we find that
most formal employment is generated by a handful of industries.15 So far, 钱
has been flowing into firms that produce the goods and services most needed by
foreign aid and oil companies: new roads, hotels, and other accommodations;
imports of popular consumer and capital goods; and telecommunications services.
Profits are so high in these sectors that firms are able to overcome the numerous
constraints to doing business in South Sudan. 另一方面, the combination
of political uncertainty, high and volatile prices, and a lack of basic infrastructure
means there is little incentive to invest in other areas of the economy. This is par-
ticularly true for agriculture, which employs around 80 占人口的百分比.
因此, the recent inflow of money has yet to translate into broad-based growth
in employment and the economy. In the following sections, we provide more
details on the five most important sectors for the current and future growth of
South Sudan’s new economy.
Construction
Construction is one of the main industries to benefit from the recent influx of aid
and oil money, making it one of the fastest growing and most profitable sectors in
South Sudan. Given the dearth of any public investment in infrastructure during
the civil wars, the country currently has fewer than 100 kilometers of paved roads.
所以, infrastructure development has been a top priority for the new govern-
ment and major aid donors. All public infrastructure projects such as roads and
power plants are currently funded with government and donor money, with road
construction the primary focus. 例如, AMBC, a large joint venture between
Thai and South Sudanese partners, was recently awarded a contract for $280 米尔- lion to build roads and bridges in the municipality of Juba on a build-operate- transfer model. Work is now spreading beyond the city center to link downtown Juba to outlying areas such as Jebel Mountain and Gudele. The central govern- ment’s annual budget for transport and roads alone has increased from roughly $42 百万 2006 到 $150 百万 2010, not including funds transferred to individual states. Donor spending also increased: 在 2007, the SSNBS counted 11 donor infrastructure projects valued at $17 百万; 在 2010 it counted 32 这样的
projects valued at $284 million.16 Private investment in residential housing and hotel construction has increased as well, although no official figures exist as yet. Walking around the Tong Ping dis- 80 创新 / Unleashing Ideas Downloaded from http://direct.mit.edu/itgg/article-pdf/7/1/73/704879/inov_a_00117.pdf by guest on 08 九月 2023 South Sudan: The Birth of an Economy trict of Juba, our team members could not help but notice the thick plumes of dust rising from the construction sites of multistoried hotels and private mansions, which have completely transformed Tong Ping from the cattle market it once was. Evidence from interviews suggests that most of the hotel projects are commis- sioned by private enterprises, such as those owned by Chinese, Ethiopians, and Eritreans, and primarily serve expatriate aid workers and government officials. The private residences are being built for wealthy South Sudanese, mostly military or government personnel. 到目前为止, construction is the sector most able to support businesses, which range in size from large firms such as the joint venture AMBC, the North Sudanese conglomerate Eyat Oilfield Services, and others owned by foreign contractors, to midsize companies that focus on residential housing, to small local enterprises such as brickmakers and welders. Major public contracts are awarded to the large foreign-owned or joint-venture firms like AMBC, and the profits from these proj- ects end up in the firms’ home countries. 另一方面, smaller housing and hotel construction projects are typically commissioned by private enterprises, such as the foreign-owned hotels mentioned above, and are carried out by a mix of for- eign-owned and local construction companies. Companies employed by donors such as the U.S. Agency for International Development or Japan International Cooperation Agency to build large-scale infrastructure projects are somewhat insulated from local business practices because they win these projects through competitive bids; their client organiza- tions expressly forbid them to pay bribes when operating in South Sudan. 另一方面, firms that work on private projects or local government-funded proj- ects must navigate a much more complicated environment. Construction projects typically involve large up-front costs and are inherently more risky, given their size and long-term nature. Nonpayment and delayed payments are frequent, and because construction companies have no legal recourse, they are forced to renego- tiate with their clients when contracts are violated. In an environment without strong institutions, many firms turn to influential locals who can help connect them to trustworthy clients, help secure public contracts, and smooth out other potential difficulties. 例如, the foreign project manager for a major con- struction company characterized his partnership with an influential local busi- nessman as a strategic alliance: the businessman helps build relationships with potential clients, while the foreign partners supply the financing, technical know- 如何, 和人力资本. Like many other construction firms in South Sudan, this particular company employs only foreigners in its engineering and managerial positions and hires local laborers for manual work. 那就是说, even the most successful construction firms must overcome signifi- cant obstacles in their day-to-day business. The government is notorious for mak- ing late or irregular payment on contracts, subcontractors can also be unreliable, and access to foreign exchange is an ongoing concern, as virtually all input mate- rials, such as cement, pipes, and steel, are imported. Although small local firms in Juba provide brick and gravel and welding services, they typically operate on a innovations / 体积 7, 数字 1 81 从http下载的://direct.mit.edu/itgg/article-pdf/7/1/73/704879/inov_a_00117.pdf by guest on 08 九月 2023 Shannon Ding, Kelly Wyett, and Eric Werker much smaller scale and serve local clients, such as individual households. A North Sudanese businessman whose family owns several properties in Juba, including upscale hotels and warehousing facilities, explained to us that rather than relying on cheaper, locally made materials, he prefers to bring in Kenyan technicians and import all his building materials from Kenya or China in order to ensure the qual- ity of the construction. Trade and transport Other sectors benefiting from the new economy are trade and transport. The demand for imports generated by aid and oil money, combined with limited com- petition in these sectors, means traders and transport companies often make huge profits. Although they face many constraints to doing business in South Sudan, their oligopolistic market power means they can simply pass on these constraints in the form of higher prices for the consumer. As in other sectors, there is a divide in the trade and transport sectors between the large, formal companies that primarily serve the government and donors, and the smaller informal businesses that serve local retailers. In our interviews with the leading foreign transport companies, including the French firm SDV Logistics and two recently merged Swiss companies, Interfreight and SPEDAG, we learned that a total of seven foreign shipping companies are serving large customers, such as the government of South Sudan, UN agencies, and other NGOs. 另一方面, local businesses rely on Ugandan or Kenyan companies that specialize in specific products, such as foodstuffs produced in Uganda, and then sell the items whole- sale in Juba. While South Sudan exports crude petroleum, it imports almost everything else, including foodstuffs, consumer goods, capital goods, and construction mate- rials. As a result, freight vehicles from Uganda and Kenya travel to Juba fully loaded but return empty, and the cost of returning empty vehicles must be added to the price of imports in South Sudan. Many other factors also add to the cost of importing goods, including poor road conditions, lack of safety in some areas, high tariffs, checkpoint delays, and illegal taxation. Our contacts at SPEDAG said that firms in Juba typically pay between $6,500 和 $7,700 to ship a 40-foot container from the port of Mombasa to Juba via the Nimule border crossing. A recent sur- vey by the SSNBS found that transporters must pass through an average of four checkpoints per 100 kilometers. 例如, there are about six checkpoints on the 163-kilometer main trade road from the Ugandan border to Juba. Drivers usu- ally make payments at 97 percent of the checkpoints.17 What’s more, we learned that many industries in the transport sector have established private associations that behave like cartels, setting high prices to offload goods, provide fuel, and clear fees at customs stations. The result is very high consumer prices in South Sudan. 的确, a study by the World Bank found that basic food substances were substantially more expensive in South Sudan than in nearby countries. 例如, by the time a ton of beans is transported from 82 创新 / Unleashing Ideas Downloaded from http://direct.mit.edu/itgg/article-pdf/7/1/73/704879/inov_a_00117.pdf by guest on 08 九月 2023 South Sudan: The Birth of an Economy Kampala, 乌干达, to Juba, its wholesale price almost doubles, 从 $675 到 $1,075. Transport and logistics costs ($145 每吨), as well as duties and other official
收费 ($218 每吨), contribute substantially to the markup. Other regionally traded products, such as maize, 水, beer, and cement, were found to have simi- larly large trading costs.18 However, these high prices in the trade and transport sectors are not that surprising, as in such a young economy that faces great politi- cal uncertainty and many constraints to doing business, high rents are necessary to stimulate investment. Given that widespread demand for imported products is relatively recent, this sector has yet to build up a diversified product base. At most markets in Juba, homogenous microsellers offer a few basic food items, typically tomatoes, eggs, onions, okra, 和, 偶尔, salted fish. This lack of diversification may result from the demand side, in that consumers traditionally have required only a limit- ed range of goods, or from the supply side, as traders lack affordable access to other products. 历史上, the majority of traders and wholesalers have been Arab businessmen from the North, particularly in areas closer to the border. 然而, many have recently returned to the North, due to fears about political turmoil, or have deliberately kept their inventories low in anticipation of a sudden need to move, according to our informants. The result is an inexperienced trade sector and higher prices in cities like Malakal, which has historically relied on Arab traders for food imports. The trade sector could clearly benefit from innovation and competition. 例如, some entrepreneurs have recently established successful, diversified retail outlets that cater primarily to the aid community. These firms are typically owned by Westerners who leverage their networks to import European and North American food products and basic consumer goods. 然而, we found little evi- dence of traders supplying diversified products to the local market. The high potential to make a profit in the transport sector means there is also room for innovation. One particular area, using the river to transport both passen- gers and goods, has not been fully exploited. River transport remains the only practical and cost-effective way to reach communities along the White Nile and its tributaries, particularly during the rainy season, when the dirt roads in the states of Jonglei and Upper Nile are virtually impassable. 然而, many North Sudanese-owned river transport companies have stopped operating since inde- 彭登斯, leaving a void for domestic companies to fill. Telecommunications While they represent only a small sector of South Sudan’s economy, telecommuni- cations companies are capitalizing on the rapidly growing demand for their serv- 冰. From aid workers and foreign businessmen to government officials and local traders, more than one million people in this new economy are moving around with a domestically serviced cell phone in their pocket. Cell phones are revolution- izing Africa, and South Sudan is no exception. 创新 / 体积 7, 数字 1 83 从http下载的://direct.mit.edu/itgg/article-pdf/7/1/73/704879/inov_a_00117.pdf by guest on 08 九月 2023 Shannon Ding, Kelly Wyett, and Eric Werker South Sudan’s telecommunications industry includes five main players and a series of small ones. People at these firms estimate that the potential market is dou- ble its current size, or two million users, and could be three million in three years. With many companies and relatively few customers, it is likely that the industry will soon pass through a consolidation phase. This may not necessarily be a disad- 优势: granting greater market power to a few companies may make coordina- tion of the industry easier and actually help spur infrastructure investment. 然而, the sector is still very new and faces many challenges. Regulatory uncer- tainty in particular is deterring investment in the large-scale infrastructure required to increase the network. 因此, coverage is currently concentrated in the larger population centers. While it is one of the most modern sectors of the economy, telecommunica- tions still has enormous potential for innovation. As in other developing countries, firms and NGOs can capitalize on widespread cell phone coverage to bring low- cost services to large sections of the population. 例如, cell phones have been used to connect underserviced communities to medical services in West and East Africa. Another particularly important area for innovation is mobile phone banking. South Sudan need only look to its Kenyan neighbor to see how the intro- duction of M-PESA has made banking services available almost everywhere in the country. Given the highly rural population of South Sudan, a mobile banking model is the fastest and most cost-effective way to bring financial services to its people. Agriculture About 80 percent of South Sudan’s population is currently engaged in agriculture. 然而, most farmers cultivate small plots and grow only enough staple crops, such as corn and cassava, to feed their families. Many do not even cultivate enough for their own consumption; the UN Food and Agriculture Organization and the World Food Program estimated that South Sudan would face a cereal production deficit of 390,000 吨 2011, 离开 890,000 people facing a severe food short- age and an additional 2.4 million people facing a moderate shortage.19 Even in areas with food surpluses, only a small quantity of food is sold in local markets. A very small amount is sold in large urban markets, where food items ranging from basic cereals to more expensive fruits and vegetables are imported from Uganda, and nothing is exported. These observations raise two questions: Why are farmers in South Sudan not selling their products to others? Why do farmers not invest more to increase their productivity? South Sudan is approximately the size of France and has a population of under ten million, which gives it a population density of 34 people per square mile, equiv- alent to that of Norway. 现在, 仅有的 4 percent of the land is cultivated, mostly in the fertile “greenbelt” zone in the southern part of the country and along the Nile River and its tributaries.20 The bulk of the agricultural sector in South Sudan consists of small subsistence farmers and pastoral and agro-pastoral communities. 84 创新 / Unleashing Ideas Downloaded from http://direct.mit.edu/itgg/article-pdf/7/1/73/704879/inov_a_00117.pdf by guest on 08 九月 2023 South Sudan: The Birth of an Economy Subsistence agriculture has always existed in South Sudan, even during the civil war, and it will continue to be the dominant method of food production unless there is significant private investment and innovation. Private-sector investment in the form of small farmers investing in inputs, equipment, or new planting methods to increase production is currently extreme- ly limited. Most small farmers are vulnerable to weather conditions, disruptions stemming from the resettlement of displaced peoples, and virtually no farmers have access to any form of lending, including microfinance. On average, 小的- holder farms are five feddans (about five acres) or smaller and rely on traditional farming methods and basic manual tools. As a result, production yields are extremely low. The UN Food and Agriculture Organization and World Food Program estimate that South Sudan’s farmers produce an average of .38 metric tons per acre. 相比之下, Ugandan farmers produce .62 metric tons per acre, despite a population density that is ten times higher.21 Within the past year, 然而, more South Sudanese businesspeople have come to own and operate commercial farms. They find this much easier than for- eign investors do, as they are able to get land from their tribal communities. In some parts of the country, local governments are taking the initiative to attract and promote commercial farming. 例如, Upper Nile State, which has historical- ly had a good deal of commercial farming due to its proximity to North Sudan, is starting a local effort to survey and demarcate land on a county-by-county level. Unused land that is not reserved for the community is leased to agricultural investors for 15 年, with the stipulation that the county may take it back if it is left uncultivated for five consecutive years. Most of the South Sudanese who invest in such commercial farming schemes are entrepreneurs with backgrounds in other activities; they started investing in agriculture as a way to diversify their business portfolios. Most of these investments were made in the past year or two as pilot projects on a relatively modest scale (500 feddans). Although some commercial farms use tractors and employ managers with considerable technical expertise, they are not in fact that different from subsistence farmers; most still rely on tra- ditional labor-intensive farming methods because machinery remains expensive and difficult to acquire. 此外, virtually all existing projects are self-financed because bank loans are unavailable. High production costs are a common constraint for both commercial and sub- sistence farmers. Given South Sudan’s small population and scarcity of skilled labor, including people who are trained in modern farming and husbandry meth- 消耗臭氧层物质, the cost of labor is extremely high. 例如, one farmer told us that it costs roughly SDG 200, 或者 $75, to hire male laborers to clear one hectare of bush,
which takes ten workers about one day. This translates into a daily wage of $7.50 for male laborers involved in preparing land, 相比 $1.15 for those perform-
ing the same task in southern Vietnam.22 Furthermore, access to markets is limit-
ed by poor road conditions and a lack of information on market pricing. 考试用-
普莱, farmers who produce a surplus in the state of Western Equatoria find it too
costly to transport their produce to Juba, which is located in the adjacent state of
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Central Equatoria, despite higher market prices in the capital city. 虽然
farmer cooperatives, such as the Yambio Agricultural Farmers’ Association and the
Nzara Agricultural Farmers’ Association in Western Equatoria, have succeeded in
selling their members’ crops to large buyers such as the World Food Program, 他们
have a much harder time finding large-scale buyers in the private sector. Anthony
Ezekiel Ndukpo, the secretary general of the Yambio group, estimates that hiring a
20-ton truck for one day to transport crops from Yambio and Juba costs $2,500, much higher than the association’s break-even point of $750. 因此, farmers
in Yambio are restricted to selling their products at local markets, which are too
saturated with surplus crops to generate much profit.
The experience of the farmers in Yambio suggests that South Sudan will not
develop a strong agricultural sector until transportation costs drop. One way for
this sector to take off is if transport costs can be reduced significantly by improved
roads, less expensive fuel, and higher competition in the trucking industry. 这
aggregate effect of such cost reductions would be an increase in the volume of agri-
cultural trade, which would result in greater competition and lower costs within
the sector. For this to take place, 然而, would require a massive recycling of
rents into public investment in infrastructure, along with lowered inputs costs—
which is the very opposite of the current situation, where rents are distorting mar-
kets by driving up prices.
同时, the lack of accessible markets discourages farmers in fertile,
surplus-producing areas from investing to increase their productivity while people
in other parts of the country suffer from food scarcity and much higher prices.
Although agriculture has the potential to be a major source of income for South
Sudan, the sector so far remains under-commercialized.
Manufacturing
Manufacturing is a nascent industry in South Sudan but it has the potential to
生长. At present, only a handful of large, formal, foreign-owned manufacturing
firms exist in South Sudan, clustered around Juba. These businesses, which employ
之间 100 和 300 workers each, produce consumer goods, such as inexpensive
beer, soda, and bottled water, that are sold to domestic consumers in South Sudan.
Interviews with representatives of several firms suggest that the main reason they
based their operations in South Sudan was to avoid the high transportation costs
involved in importing the same products from neighboring countries. On the
另一方面, many small firms operate informally, including the brickmakers and
welders who serve local construction projects. 这 2010 South Sudan Business
Survey conducted by the SSNBS counted 110 such small-scale manufacturers in
Juba alone.23 Although the manufacturing sector faces many constraints, 有
significant opportunities for expansion, particularly as consumer demand rises
with the growing economy.
Weak infrastructure is the primary constraint facing the manufacturing sector.
Virtually all businesses operating in Juba rely on their own generators, since city
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South Sudan: The Birth of an Economy
power is sporadic and insufficient. Michael Beyene, general manager of the
Aqua’Na Bottling Company, one of the four major suppliers of bottled water in
已经, calculates that power generation represents roughly 20 percent of the firm’s
operating costs. Poor road conditions also limit firms’ distribution networks, 两个都
internally and for potential export markets. 此外, most manufacturing busi-
nesses require a large up-front investment in physical infrastructure, which can
deter investors who cannot secure a safe, long-term land use agreement. Land is
communally owned in South Sudan, so finding a community that is willing to
negotiate a long-term land lease deal can take a long time—more than two years in
一些案例. Firms also face high labor costs because the existing labor pool has so
few skilled workers.
Despite these challenges, there are opportunities for growth. South Sudan’s
impassable roads in fact offer an unexpected benefit to the manufacturing sector,
as high transportation costs can promote a nascent industrial policy in that they
make domestically produced goods more price competitive than foreign goods.
This is supported by the fact that virtually all goods produced in South Sudan to
date have been fast-moving consumer products that generate profit through low
margins and high volume. Although manufacturing for export may be difficult to
achieve in the short run, there is significant potential for production aimed at the
domestic market, which is expected to grow as household consumption increases.
Other constraints, such as the lack of skilled labor and the difficulty of securing
土地, are also surmountable by those who are patient enough. Ian Alsworth-Elvery,
managing director of South Sudan Beverages Limited, a subsidiary of the global
brewing conglomerate SABMiller, says that the company initially had to spend
more time and resources training its workers in South Sudan than in other devel-
oping countries. 作为回应, the firm developed a two-pronged training approach
in which it sends local staff members to train at its sister operations in Kenya, 和
relies on expatriate staff for on-site training in South Sudan. This strategy has been
so successful that the company now hires almost all local workers, the exception
being five expatriate employees. In terms of securing land, the company took
roughly two years to find and negotiate a land-lease agreement with a local Bari-
speaking community. It eventually leased 32.5 acres of land under an arrangement
that made the community itself a financial stakeholder in the business, which pays
them a royalty on each bottle of beer sold by South Sudan Beverages Limited.
结论: FROM CONCENTRATED PROFITS
TO EMPLOYMENT-GENERATING INNOVATION
The end of decades of civil war and large inflows of aid and oil money are dramat-
ically changing the economy of South Sudan. Only a few years ago, 多数的
its people were living just as they had for centuries. Now they are experiencing the
birth of a modern economy. Our findings suggest that the organic development of
South Sudan’s economy by the invisible hand of the market will begin to produce
an importing state that comes to depend on rents, with the biggest beneficiaries
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operating in the few sectors that absorb aid and oil money. 那就是说, this version
of the economy will offer few tangible benefits to the majority of the people of
South Sudan. This is particularly true for the agricultural sector, which is seeing lit-
tle private investment in the existing business environment, precisely because it
does not cater to the needs of the government officials and aid organizations whose
spending is driving growth in the construction and hospitality sectors.
Far more innovation will be needed to reverse this situation, both in govern-
ment policy and in the strategies of firms, to encourage the kinds of business activ-
ity that will translate into inclusive growth. We believe that relying on invisible
market forces will cause South Sudan to go down the unfortunate path taken by
many other states dependent on natural resources. To avoid this outcome, 这是
essential to have active government interventions that will support greater experi-
mentation in policymaking and in the private sector.
We found innovation already occurring to some extent on a local level, 在哪里
informal practices are filling the gaps where formal institutions and policies are
nascent or nonexistent. 例如, communities in Upper Nile State have initi-
ated an effort to survey and rent out land on a county-by-county basis, 而不是
waiting for passage of the national Land Act. Evidence gathered in interviews sug-
gests that community leaders were motivated to get a head start in attracting pri-
vate agricultural investors, as many commercial farms owned by North Sudanese
investors were sold off in the lead-up to independence.
It seems that the deficiencies in South Sudan’s business environment may in
fact provide the impetus for firms to adopt more innovative strategies, given that
the first-best solution is often not feasible.24 For example, the lack of vocational
schools and technical institutions and the disruption of schooling and economic
activities during the civil war are major impediments to accumulating human cap-
ital, especially business skills. Despite these hurdles, we found evidence that firms
in South Sudan are implementing organizational learning and seeking out people
with new skills so they can survive in the changing environment that peace has
brought.
例如, of the 40 or so firms that make up the Yambio Chamber of
Commerce in Western Equatoria State, almost all started as small trading compa-
nies that operated during the civil war, with traders crossing from South Sudan to
the Democratic Republic of Congo or Uganda to import basic goods. 自从
Comprehensive Peace Agreement was signed, these firms have been the ones most
able to take advantage of the improved security situation and expand their busi-
内塞斯. Interviews with Chamber of Commerce members suggest that their origi-
nal trading activities helped them gain essential business capabilities, such as man-
aging large numbers of workers and negotiating contracts with suppliers and dis-
tributors. These firms also already have experience with foreign businesses, 谁的
practices they can now emulate. Many members have recently decided to develop
more specialized business models and move beyond general trading to operate
restaurants, hotels, beer distributorships, and automotive parts dealerships, 之中
其他的. In one case, 24 traders in Yambio have banded together to form SOMAG,
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South Sudan: The Birth of an Economy
an agricultural marketing company that seeks to aggregate and purchase cereal
crops from local farmers and sell them to large-scale private buyers.
Although South Sudan’s new economy is currently growing rapidly and will
continue to grow without more innovation, this type of growth may offer few ben-
efits in the form of meaningful employment, higher incomes, or better nutrition
for the majority of its people, who continue to rely on subsistence agriculture and
are largely isolated from the developments taking place in other sectors. 迄今为止, 新的
agricultural ventures such as SOMAG are exceptions to the norm, and it is uncer-
tain whether these new firms will actually be profitable a few years from now.
然而, allowing this kind of experimentation to take place is absolutely neces-
sary if South Sudan is to generate more innovative policy and business strategies.
通过这样做, South Sudan can direct the trajectory of its new economy and help to
promote a truly transformational process that will improve the livelihoods of its
newly independent people.
1. “65 Illegal Tax Collection Institutions Operate across South Sudan,” Gurtong.net. Available at
http://www.gurtong.net. Accessed September 30, 2011.
2. The most complete anthropological study of social customs among the Nuer, one of the main pas-
toral tribes in South Sudan, is found in the work of Evans-Pritchard. See E. 乙. Evans-Pritchard,
Kinship and Marriage among the Nuer. 牛津, England: Clarendon Press, 1951.
3 All currency is in U.S. dollars unless otherwise noted.
4. 2010 Statistical Yearbook, South Sudan National Bureau of Statistics (SSNBS). Available at
http://ssnbs.org/. Accessed February 28, 2012.
5. United Nations Development Program, Multi-Partner Trust Fund Office website. Available at
http://mdtf.undp.org/. Accessed August 18, 2011.
6. SSNBS, 2010 Statistical Yearbook.
7. World Development Indicators 2011, World Bank. 可在 http 上获取://data.worldbank.org/data-
catalog/world-development-indicators. Accessed February 28, 2012.
8. 2010 Statistical Yearbook.
9. Jeffrey Frankel, “The Natural Resource Curse,“ 工作文件 15836, NBER, 剑桥, 嘛,
2010.
10. Unpublished data from Bank of South Sudan, and evidence from interviews.
11. Unpublished data from Bank of South Sudan, and evidence from interviews.
12. Frankel, “The Natural Resource Curse.”
13. 2010 Statistical Yearbook.
14. Frankel, “The Natural Resource Curse.”
15. SSNBS, “Business Survey, 2010.” Preliminary results provided to the authors by SSNBS; full sur-
vey results are expected to be released in 2012.
16. 2010 Statistical Yearbook.
17. SSNBS, South Sudan Cost-to-Market Report: An Analysis of Check-points on the Major Trade
Routes in South Sudan. 2011. 可在 http 上获取://ssnbs.org/.
18. Yutaka Yoshino, Grace Ngungi, and Ephrem Asebe, “Enhancing the Recent Growth of Cross-
Border Trade between South Sudan and Uganda,” Policy Note No. 21, World Bank, 华盛顿
直流, 2011.
19. Food and Agriculture Organization and World Food Program, “FAO/WFP Crop and Food
Security Assessment Mission
一月 2011. Available at
to Southern Sudan,”
http://www.wfp.org/content/sudan-faowfp-crop-and-food-security-assessment-mission-south-
ern-sudan-january-2011.
20. Primary data provided by the Food and Agriculture Organization’s land-coverage database,
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Shannon Ding, Kelly Wyett, and Eric Werker
located at the South Sudan Ministry of Agriculture and Forestry.
21. Food and Agriculture Organization and World Food Program, “FAO/WFP Crop and Security
Assessment Mission.”
22. Caroline Brassard, “Wage and Labour Regulation in Vietnam within the Poverty Reduction
议程,” unpublished paper, National University of Singapore, 2010.
23. SSNBS, “Business Survey, 2010.”
24. The first-best solution is the technically correct, best-practice policy action that is often not fea-
兄弟姐妹, due to the specific constraints within a developing country. To bypass these constraints,
second-best solutions may be employed, which often do not fit the standard form of policy pre-
scriptions. See Dan Rodrik, One Economy, Many Recipes: Globalization, Institutions and
经济增长. 普林斯顿大学, 新泽西州: 普林斯顿大学出版社, 2011.
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