Sudan's Oil, Ethiopia's Water and Regional Integration
- Sudan and Ethiopia (and an independent South Sudan) face similar challenges in poverty reduction, climate change, population growth and food security. They will find it hard to address these because of mutual mistrust and lack of regional integration around oil, water and hydropower. This could even lead to conflicts.
- All three must choose between having a hostile attitude towards each other over the Nile Basin waters and Sudanese oil, and sharing their resource wealth to build better economic relations that lock in political stability and address the ecological pressures confronting their populations.
- Regional cooperation and integration can be built on a revision of the 1959 Nile Treaty and the synergies between Sudan's oil for Ethiopia's water. North and South Sudan have regional comparative advantages in agriculture and can continue to supply Ethiopia with oil, while Ethiopia should be encouraged to make full use of its considerable potential in hydropower on the Blue Nile to export electricity to its neighbours.
- Fundamental obstacles to regional integration include antagonism between the region's leading political movements; North and South Sudan's greater focus on building a new relationship with each other than on broader regional cooperation; North Sudan's insistence on pushing ahead with its own dam programme; and internal factors in Ethiopia constraining its emergence as a regional leader.