INTELLIGENCE MEMORANDUM SOVIET ECONOMIC AND MILITARY PRESENCE IN THE SUDAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001700020015-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 22, 2016
• Document Release Date: March 2, 2010
• Sequence Number: 15
• Publication Date: August 1, 1971
• Content Type: IM

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Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Soviet Economic And Military Presence In The Sudan
Secret
ER IM 71-162
August 1971
Copy No.
53
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WARNING
't'his document contains information afecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended,
Its transmission or revelation of its contents to or re-
ceipt by an unauthoriz:d person is prohibited by law.
GROUP 1
Excluded Irom outomode
downgrading and
dada.; cot ion
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oi:,vnri t
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
August 1971
INTELLIGENCE MEMORANDUM
SOVIET ECONOMIC AND MIU.ITARY PRESENCE IN THE SUDAN
Introduction
1. The abortive pro.-Communist coup of 19 July 1971 in the Sudan
(see the map) and the subsequent purge of the local Communist Party has
brought Sudanese relations with the USSR close to the breaking point.
Economic and military cooperation between the two countries, which had
increased sharply over the last two years, will almost certainly decline or
cease. Soviet involvement has included sizable trade agreements, promises
of substantial economic aid, and large-scale military assistance. Despite
Soviet assistance, the Sudanese economy has deteriorated drastically, and
even before the coup attempt Sudanese began looking elsewhere for
assistance in solving their pressing economic problems. This memorandum
assesses the Soviet economic and military presence in the Sudan and
discusses possible alternative sources of economic assistance available to the
Sudanese.
Background
2. Radical socialism was introduced into the Sudan by a military
coup in May 1969. To obtain popular support and to counter opposition
from conservative elements, the military Revolutionary Command Council
(RCC), headed by Major General Jafar Numayri, brought many Sudanese
Communist Party (SCP) members into the new government. The "capitalist
road to development" was rejected, government trading monopolies were
Note: This memorandum was prepared by the Office of Economic Research
and coordinated within the Directorate of Intelligence.
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proposed, and an expansion of economic relations bilaterally with
Communist and radical Arab countries was instituted.
3. The USSR responded favorably, and increased its presence in the
Sudan appreciably. In September 1969, Moscow sent a 15-man mission to
help draft a Five-Year Plan to guide the Sudan's economic development
in 1971-75. Later, a sizable barter trade agreement was arranged, and the
USSR hinted at substantial economic aid. By assuming almost complete
responsibility for training and supplying the Sudanese army, the USSR
enabled the revolutionary government to attempt a military solution to the
protracted civil war with Black Africans in southern Sudan. The USSR
specifically applauded the nationalizations and confiscations in 1970, and
paid the Sudan a rare compliment by adding it to the list of "non-capitalist"
developing countries, a select group whose domestic programs are most in
accord with Soviet thinking.
4. The economics of Sudanese socialism proved disastrous, worsening
the situation that had helped precipitate Numayri's coup in 1969. -1/
Despite the government's success in increasing revenues in fiscal year (FY)
1970, J a $96 million budget deficit was recorded. The May 1970
SCP-inspired nationalizations demoralized the private sector, brought nearly
every Sudanese productive industry to the brink of collapse, and killed all
incentive for domestic and foreign private investment. The Sudan was unable
to raise foreign exchange necessary to mee i increasing obligations: more
than half of the cotton crop (the major foreign exchange earner) had become
tied to barter agreements, friendly Arab countries refused to make large
loans because of SCP influence in the government, and receipts from other
sources proved little more than a trickle. By December 1970, gross foreign
exchange reserves had dropped to about $21 million, barely enough to back
the money supply, and net foreign exchange reserves, taking short-term
obligations into account, had plummeted from a minus $15 million in June
1969 to a minus $60 million.
5. Growing disillusionment led to major policy shifts beginning in
November 1970 when Numayri dismissed Sudanese Communists from key
posts in the government. To garner favor with Arab countries, such as Libya
and Kuwait, Numayri intensely criticized the local Communists. The
unrealistic Five-Year Plan was revised, and, to ensure its successful
implementation, discreet overtures were made to the West for aid. In early
2. The fiscal year of the Sudan begins on 1 July of the previous year
and ends on 30 June of the stated year.
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June 1971, a return to the West for aid was made official policy. To counter
these actions, pro-Communist military officers moved against the Numayri
regime on 19 July.
6. The coup was short lived, and the return of Numayri to power
by a countercoup on 22 July signaled a massive purge of Communists. The
harsh reaction by Moscow to the execution of the coup leaders and SCP
officials led Numayri to charge the Soviet Embassy with being an
"accomplice of the coup leaders and the SCP." Numayri's actions to date
have left Moscow with little opportunity to be conciliatory toward
Khartoum, and Soviet public statements during the last week of July
indicated that Moscow was prepared to use its military and economic aid
in the Sudan to apply pressure on Numayri's government. Both sides,
however, apparently would prefer to avoid a complete rupture in relations,
and during the first week in August the Soviet press campaign appeared
to have eased.
Impact of Soviet Involvement
7. I^ 1970 the USSR made a bid to become the Sudan's major
?rading partner as a result of the $43 million barter agreement of November
:969. In return for about 300,000 bales of Sudanese cotton, the USSR
offered sugar, textiles, raw materials, machinery, and equipment. Claiming
a shortage of convertible currency, Moscow refused to offer any cash for
the cotton. Moreover, when delivered, the Soviet goods tended to be
overpriced, particularly in view of their quality.
8. The Sudanese kept their part of the bargain, delivering most of
the cotton by March 1970. Additional cotton, peanut, and sesame shipments
brought the Sudan's total exports to the USSR for 1970 to $47 million,
compared with only $11 million in 1969 (see Table 1). The Soviet share
of Sudanese exports accordingly jumped from an average of 4.7% annually
during the 1960s to 15.7% in 1970.
9. The USSR apparently felt free to deviate from the barter
agreement to suit its own interests. Contrary to an earlier promise, it refused
to take stored cotton from the previous year's crop. Moreover, the Sudanese
were informed that the USSR would not supply goods that could be sold
elsewhere for hard currency. The Sudan eventually did get some of the
promised goods, but by no means all; total imports from the USSR for
1970 reached only $25 million.
4 -
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Table 1
Direction. of Sudanese Trade a/
Million US $
Exports
Imports
1969
1970
1969
1970
Communist countries
50.8
84.5
43.8
60.8
USSR
11.2
46.7
12.6
24.6
Communist China
18.4
17.7
14.3
12.2
Other
21.2
20.1
16.9
24.0
Western Europe
110.1
110.7
117.4
120.0
Italy
32.2
30.0
13.0
5.9
West Germany
29.0
30.4
16.8
22.5
United Kingdom
16.6
17.7
51.1
57.7
Other
32.3
31.8
36.5
33.9
Arab countries
20.7
27.0
25.7
19.4
United Arab Republic
9.2
16.2
11.1
15.7
Saudi Arabia
7.5
6.3
0.5
0.5
Other
4.0
4.5
14 . 1
3.2
Asia
53.3
61.1
50.7
62.7
India
30.2
29.5
25.4
38.1
Japan
21.2
26.8
21.7
17.0
Other
1.9
4.8
3.6
7.6
United States
8.4
10.8
7.6
8.8
Other countries
4.2
4.1
11.2
15.6
Total
247.6
298.2
256.4
287.3
a. Source: Department of Statistics, Sudan.
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10. Further incidents in early 1971 aroused Sudanese suspicions of
Soviet motives. In April the USSR signed an agreement with India - the
Sudan's largest cotton customer after the. USSR -- by which India is to
process approximately 110,000 bales annually of Soviet-owned, mainly
Sudanese cotton. The Sudanese government reacted sharply, believing that
its large direct cotton export trade to India was being- threatened by-the
USSR, just as had occulTed allegedly already through Soviet sales of smaller
quantities of cotton in Europe. This sense of outrage was somewhat
ameliorated by assurances that only processing is to take place in India.
However, by retaining a portion of the processed textiles as payment for
the processing, India, in fact, will be rpceiviiig Sudanese cotton from the
USSR that otherwise could be supplied by the Sudanese for hard currency.
i 1. The barter agreement was renewed for three more yeas in January
1971. The annual amount of trade was to be the same, $43 million, but,
at least for 1971, the USSR reportedly was to pay cash for $8.6' million
worth of cotton. in
May 1971 that the Sudan was planning to cut the barter agreement from
the present 300,000 to 100,000 bales annually. This action would not cause
the Sudan any significant problems because other customers are available;
for example, recent sizable trade arrangements were concluded with the
United Kingdom and Communist China.
Economic Aid
12. The true extent of Soviet economic aid to the Sudan since the
May 1969 coup is not clear. On returning from a mission to Moscow in
November 1969, Sudanese government leaders announced what appeared
to be some $41.8 million in Soviet economic aid commitments. Other
announcements during the same period attempted to pass off trade
agreements with other Communist countries as aid and the reactivation of
old aid agreements as new commitments.
13. Soviet economic aid actually received was quite small, totaling
about $1.5 million for 1969 and 1970. Most of this aid was drawn from
a 1961 credit for $22.2 million and was used primarily for projects that
include hospital construction and the establishment of a veterinary research
laboratory. In 1970, experts were supplied for a geological study of the
Red Sea Hills area, economic planning consultation, railway improvement.
and irrigation consultation for the Rahad irrigation scheme. This is currently
the Sudan's largest development project and will utilize waters from a new
dam at Al Rusayris.
14. An abrupt loss of Soviet economic aid would cause no major
problems for the Sudan. Only some $5 million from 1961 loans remained
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available at the start of 1971, although more recent credits are still available
(see Table 2). The loss of some 70 Soviet economic technicians would be
felt but in no way would cripple development programs - the USSR is
not greatly involved in large projects that could not be completed by
someone else. No Soviet commitments to implement the Five-Year Plan
have been made.
Military Aid
15. The USSR is overwhelmingly the largest military aid supplier to
the Sudan. 3/ In January 1968, $75 million in military aid was obligated,
and, after the May 1969 coup, equipment deliveries and adviser arrivals
increased significantly. By the end of 1970 an estimated $60 million had
been used and repayments of principal postponed until 1975. The Sudan
has been supplied with quantities of small arms and large numbers of
medium tanks, armored personnel carriers, and artillery, In addition, several
MIG-21 fighters, SA-2 missile equipment, and MI-8 helicopters have been
received. Soviet technicians and advisers, estimated at nearly 400, are serving
in various capacities from construction experts and technicians to training
instructors and military advisers. In 1970, some Soviet technicians were
working on an air delOnse system
16. A threat to end military aid probably is the only serious pressure
the USSR could exert on the Sudan. Training for the maintenance and
operation of some of the Soviet equipment possibly could be obtained from
Egypt. Without Soviet technicians, however, other equipment, such as the
SA-2 missiles, would be of no value to the Sudanese.
Possible Alternatives
Other Communist Countries
17. Perhaps as much as $114 million in development credits is
available from Communist sources other than the USSR (see Table 2). Most
of the projects to be finance,a by these credits remain under discussion
and are being considered within the context of the new Five-Year Plan.
In some cases, Communist countries appear to be bidding against one
another and against non-Communist sources for the same project. Proposed
aid includes mostly assistance for agriculture and light industrial projects.
Almost none of the credits have been drawn.
3. The only other active military aid agreements, totaling about
$11 million, are with Bulgaria and Czechoslovakia.
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Table 2
Economic Credits Available to the Sudan in 1971
Million US
Date
Original
Remainder
Country Extended
Amount
Available
Bulgaria
1967
17.2
17.1
Communist China
1970
41.5
41.6
Czechoslovakia
1965
10.0
9.9
Czechoslovakia a/
1967
20.0
20.0
East Germany
1969
11.4
11.4
Hungary
1970
10.0
10..0
North Korea
1970
4.0
4.0
USSR
1961
22.2
5.2,
USSR
1969
41.8
b/
41.4 b/
Kuwait
1965
4.8
0.2
Kuwait
1967
14.2
6.5
Kuwait
1971
50.0
50.0
United Arab Republic
1969
20.4
16.9
West Germany
41961
18.4
1.7
United Kingdom
1963
14.0
0'.8
Denmark
1971
2.0
2.0
S
ed
1970
2
9
9
2
en
w
.
.
IBRD and IDA c/
155.5
19.9
Japan
1970
11.0
11.0
a. This Zoan may have lapsed 'without being used.
No reference to a $20 million Czech Zoan has
appeared in recent reports on aid.
b. Not definitely established; may be much Zess.
c. The amounts represent several loans for
specific projects made through 1968.
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18. The Chinese Communists are likely to become the major suppliers
of Communist aid. Soon after signing a $41.6 million aid agreement in
August 1970, Peking smart 50 representatives to the Sudan to study the
feasibility of several industrial projects and roadbuilding. By June 1971 the
Chinese Communists had committed an estimated $20 million to build a
road between Wad Madani and Al Qadarif. Chinese performance in Africa
in recent years would seem to indicate that they will prove dependable
in their commitment. Moreover, the recent strains between Khartoum and
Moscow give Peking an opportunity to pre-empt Soviet influence.
Arab Countries
19. Prosp,. cts for substantial aid from Arab countries are now
extremely good. SCP influence in the Khartoum government had been the
major stumbling block to Arab aid, but soon after Prime Minister Numayri
began attacking the Communists in early 1971, Kuwait entered into a $50
million agreement, repayable on easy terms, to furnish all of the Sudan's
fertilizer needs for its development projects over the next five years. In
addition, a permanent committee, composed of representatives of the
Kuwait Fund for Arab Economic Development and the Investment Bank
of Sudan was proposed to examine investment pro;?cts in the Sudan and
to establish investment offices in the two countries.
Ties with Libya and Egypt were strengthened after the
successful countercoup in July 1971 and especially after Numayri
announced he would join the proposed Arab Federation with Egypt, Libya,
and Syria in January 1972. As a result, large-scale financial assistance from
Libya seems likely.
The West
20. The West has been a dependable source of aid, even after the
1969 coup. Much of the capital for the Sudan's development projects
between May 1969 and December 1970 came from Western commitments
made prior to the coup. In 1971, some $20 million remained available from
loans of the International Bank for Reconstruction and Development
(IBRD) and the International Development Association (IDA) and
$2.5 million from West Germany and the United Kingdom. The Sudan
continues to receive technical assistance totaling several million dollars
annually from France, the United Kingdom, West Germany, and the
Netherlands. Moreover, new aid has been .sought and found in the West,
particularly in the Scandinavian countries: Sweden agreed to a S2.9 million
loan to purchase well-drilling equipment in mid-1970 and Denmark offered
a $2 million interest free loan in early 1971. In the last year and a half
the United Kingdom has considered three loans totaling $5.8 million for
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pumping stations, improving the Sannar dam, and navigation equipment for
Khartoum Airport.
21. The announcement in June 1971 of a major policy shift toward
increased economic cooperation with the West already is leading to still
greater Western assistance. Representatives from the IBRD will arrive in
Khartoum soon to resume negotiations for financing the Rahad irrigation
schenne, road building, agricultural mechanization, and the expansion of
Gezira irrigation, south of Khartoum - in all of which the USSR was to
have played a major role. The Rahad loan alone has been estimated to
be for $34 million. The United Kingdom reportedly is initiating a major
effort to furnish agricultural and technical assistance to Arab nations, the
Sudan included, particularly with respect to cotton production. Although
new official aid from the United States and West Germany is precluded
at the moment because of severed diplomatic relations, the prospects for
private investment from these countries are improving. The Sudan recently
passed legislation to limit nationalizations and confiscations, to assure the
safety of investments, and to provide for the repatriation of profits and
capital. Sudanese officials have expressed a desire for private US involvement
in Sudanese projects, and arrangements for formal talks already have been
made with a West German company that had built two sugar mills and
an ammunition plant in the 1960s.
Conclusions
22. A threat to cut back on either trade or economic aid by the
USSR probably would put little pressure on the Sudanese. Soviet economic
involvement in the Sudan has been disappointing, and the Sudanese have
become suspicious of Soviet motives. The USSR has been cavalier in the
executi3n of its part of the 1970 cotton barter agreement, and the Sudanese
apparently were planning to cut back on the size of future deals.
Furthermore, the Sudanese already had begun to look elsewhere for trade
and economic assistance several months prior to the abortive coup. Prospects
for non-Soviet economic aid have improved significantly, and even a modest
commitment by one of several potential donors could more than replace
any lost Soviet aid.
23. A threat to curb all military aid would be the greatest pressure
Moscow could apply. As long as the Sudan continues to pursue a military
solution to the southern rebellion, a need for substantial military assistance
remains. A wholesale exodus of Soviet advisers and technicians would greatly
reduce the effectiveness of the Sudanese army. Egyptian military advisers
and Libyan money would be of some help, should the Soviets leave, but
such aid could not replace Soviet expertise.
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