Oil ties

 "I don't think [the conflict between both sides] is over yet, but there is significant rapprochement," Magdi el-Gizouli, a Sudanese expert with the Rift Valley Institute, said in a recent interview with DW.

The clearest sign of this is the visit to South Sudan on Friday April 12, 2013 by Sudan’s President Omar al-Bashir. Since early April the governments of al-Bashir and his counterpart Salva Kiir have been moving closer together. They agreed to withdraw troops from their common border and South Sudan announced the resumption of the oil flow. All signs point to fresh harmony but it was a long road to get to this point.

Before South Sudan officially became independent in 2011, there were disputes between Khartoum and Juba over the distribution of revenue from the sale of oil. They also argued about the exact location of the border, the status of citizens of one country living in the territory of the other, and the status of the region of Abyei – without reaching any conclusion.

The lowest point in relations was reached in January 2012. After a dispute over transit costs for oil pumped through pipelines running from the South to the North, South Sudan halted oil production. Several rounds of negotiations ended with no result. Then, in March 2013, a new agreement was reached – and suddenly things started moving again. Both sides agreed to withdraw troops from the border region. Only unarmed policemen will remain whose task it will be to guard the 2,000 kilometer-long (1,242 miles) border. They will be supported by a more than 1,000-strong UN police force.

A few days ago the government of South Sudan ordered oil companies to restart production. Sudan's President Omar al-Bashir was quick to show his thanks. He announced his intention of visiting South Sudan for the first time since independence celebrations in July 2011.

Both countries need oil

"When the oil flow was stopped, it severely damaged both the northern and the southern economy. Even though they dislike each other very intensely (...), if they do not cooperate economically, both governments and both societies will be at serious risk of collapse," said Andrew Natsios, a former US special envoy to Sudan and author of the reference book "Sudan, South Sudan, and Darfur: What Everyone Needs to Know."

The figures back up this theory. Without the input from oil revenue, the northern economy has nose-dived during the last two years. According to the International Monetary Fund, GDP fell by more than 11 percent in 2012. During the same year prices rose by more than 28 percent.

In June 2012 the government of President al-Bashir responded by announcing an austerity policy which included the end of subsidies for petrol and certain foodstuffs. As a result, the price of petrol almost doubled and there were clashes between demonstrators and security forces in the capital Khartoum and other cities.

Soldiers without pay are a security risk

South Sudan has an even greater need for oil revenue than its northern neighbor. The young nation is one of the poorest in the world. More than half the population lives below the poverty line. 73 percent are illiterate and the health system is in a dire state. 90 percent of the national budget is financed by oil revenue.

There is also another reason why the South needs the money, says Andrew Natsios.

"They are building schools, they are building health clinics and roads, but the money is basically to pay state employees."

Natsios estimates there are 400.000 people on the southern payroll, made up of 100,000 civil servants, plus 150,000 people in the regular southern army and "150,000 people who are in militias who were aligned with the North but the South, to keep peace, put them on the payroll as a reserve force."

Payments for the regular army alone account for a quarter of the budget.

No friendship without border security

The new friendship between the two neighbors does not yet stand on a firm footing.

"The essential threat to this agreement is border security," says Magdi el-Gizouli.

"However one must acknowledge that this is a very long border and a very difficult border at that. It is not only the scene of activities of both armies, but also the scene for activities of a lot of rebel groups and of different proxy forces that have at one time or another fought on this or the other side." He also says the success of the agreement would hinge on how far the two capitals are able to deal with forces under their command.

If there is any resumption of warfare on the border in one form or another, "it would unfold in a fashion that will draw the two capitals into confrontation again," el-Gizouli predicts. "On the other hand, if oil starts flowing, the incentive for keeping the peace will be much greater than it is now."

The South appears also to have a Plan B. In late March the government in Juba announced that additional pipelines would be laid, running to Kenya and Djibouti. Then the oil flow would not be disrupted even if there were to be conflict with the north again.