Remarks by Ambassador Susan E. Rice, U.S. Permanent Representative to the United Nations, at the International Engagement Conference on South Sudan, December 15, 2011

Susan E. Rice
U.S. Permanent Representative to the United Nations 
U.S. Mission to the United Nations 
New York, NY
December 15, 2011




AS DELIVERED

Good morning distinguished guests; on behalf of the United States,welcome to the second day of the International Engagement Conference on South Sudan. I join Secretary Clinton in thanking our co-sponsors, with whom we have worked closely in planning for this conference. I'm particularly pleased to welcome the UN and to thank the UN agencies and peacekeepers who are carrying out pioneering work in South Sudan. We are especially grateful to UN Special Representative Hilde Johnson, who is spearheading international support to build peace in South Sudan.

This is an exciting moment for the world's newest state. It has strong potential to attract the quality and quantity of investment needed to enable it to develop rapidly. The government has support from its citizens, its East African neighbors, the United States, and the
international community, including the United Nations. And, as we can see today, South Sudan has attracted considerable interest from private investors.

The challenges and needs are immense. South Sudan remains one of the world's poorest countries, with just 30 miles of paved roads and only 15 percent literacy. Yet, it has an unique, though not unlimited, opportunity to spur sustainable economic development, in partnership with the international community.

For that, South Sudan can draw on the lessons of other successful post-conflict societies to speed the progress already underway. Its
first priorities are rightly security and building strong, democratic institutions. In post-conflict societies, people immediately demand the establishment of security, the rule of law, and reliable justice. South Sudan is no exception. We also know that to emerge from conflict, post-conflict states must seek to build strong democratic institutions that are inclusive and free from corruption. They must invest in their people. For countries with significant natural resources, it is important both to manage those resources transparently and to diversify the economy. Establishing security and building strong democratic institutions are the factors that make the difference between post-conflict recovery and relapse.

The government of South Sudan has had little time to start rebuilding, but is making early progress. President Salva Kiir Mayardit is pushing forward laws to combat corruption. They will build confidence among South Sudan's citizens, including its farmers, its students, and budding entrepreneurs, as well as its international partners. The Government's focus has been ensuring good stewardship of oil revenue, while it has also prioritized expanding basic education and healthcare, particularly for mothers. These are vital investments in human capital. The government is building and improving roads, particularly in Juba, and from Juba south to Uganda. South Sudan has kept its doors open to entrepreneurs from neighboring states, who, together with South Sudanese businessmen and women, have expanded the retail sector and spurred an initial building boom. The government has wisely cultivated its southern and eastern neighbors, who supported its fight for independence. The result is an East African Community eager to welcome a new member.

South Sudan's development plan rightly emphasizes the basics. It looks to small-scale family farms and livestock herds for initial growth. These sectors are relatively easy to enter, once land ownership and rights issues are addressed. They require little formal education. They put food on the table.

Such policies are directionally correct. But, of course, much more work lies ahead for South Sudan as it seeks to shed its violent past and forge a path toward sustainable peace and prosperity.

While the country is no longer at war, its security remains precarious. The conflicts in Southern Kordofan and Blue Nile and the dispute over Abyei are spilling over into South Sudan. Khartoum has dropped bombs in civilian populated areas clearly within South Sudan. Such acts of aggression must end immediately. We are deeply concerned about the escalating conflict along the border, which is disrupting trade, increasing food prices and causing a major humanitarian emergency. Resolution of outstanding Comprehensive Peace Agreement issues is imperative for both countries and essential to South Sudan's successful development. With South Sudan possessing 80 percent of the oil, and Sudan controlling the pipeline that brings this oil to market, both parties must resolve oil and transitional financial arrangements. South Sudan cannot afford to continue spending 40 percent of its budget on security, particularly as oil production is expected to decline as reserves are depleted.

Within South Sudan, security challenges range from deadly cattle raids to conflicts over land, stoked by dissident rebels and long-standing inter-communal feuds. The violence including in Jonglei, where rebels are reportedly preparing for a fight, is alarming. The Government should work to accelerate demobilization and build a justice system that can resolve land and other property claims. A more robust Government presence in regions of particular concern will increase early warning and help prevent and resolve conflicts.

In meeting this challenge, South Sudan is not alone. The UN Mission can assist the Government as it maintains peace and security, protects civilians and reforms security institutions, by providing both diplomatic tools and military support. But to fulfill its mandate, restrictions on UNMISS's freedom of movement must be addressed promptly in the early months of South Sudan's statehood and the start-up of the new Mission.

Security alone will not suffice to launch the new South Sudan. An engaged citizenry is also indispensable to an enduring peace. The
Government can champion the rights of all its citizens, women and men alike, to contribute to the political life of the country, establish civil society and a free press and hold leaders accountable. South Sudan will certainly benefit from involving all its people in the key decisions that will shape their collective future.

While governance and security are chiefly the responsibility of the state, human capital development, economic diversification, and
infrastructure construction can all be catalyzed by international engagement, particularly private-sector investment. South Sudan is
fortunate to be able to draw upon its wide circle of friends. USAID has actively invested in education and road building, while Norway has concentrated on oil-revenue management and Britain on health care and supporting the government's anti-corruption efforts. South Sudan has made progress on implementing laws governing contracts and limited partnerships, which should give increased confidence to investors that they will be treated fairly, that contracts will be enforced, and policies established to promote fiscal and monetary stability.

But the engine of development must be the private sector, as the Government has already recognized with its new South Sudan Investment Authority. South Sudan offers private investors great opportunities. These begin with a proud and committed people who fought for and won their self-determination, after decades. The diaspora is returning home in large numbers. And, of course, South Sudan has abundant natural assets not only oil but also minerals, gold, copper, iron ore and more. South Sudan can, as Secretary Clinton said yesterday, become a breadbasket for Africa. The land is fertile. Water is abundant. The possibilities for irrigation have only begun to be explored. Farmers can grow grain, sugar cane, coffee, tea and fruits. Tourism, which is so important to the economies of neighboring states, could be a growth industry, particularly with the spectacular beauty of Boma National Park. My son, Jake, a veritable wildlife expert, tells me that Boma, while remote and lacking tourist accommodation, is home to one of the most spectacular and diverse collections of animals in all of Africa. It is especially famous as the starting point for many antelope migrations, most notably the White-Eared Kob.

To achieve all this potential, targeted early investments are needed, not only on key roads but also in hotels and an international airport that can handle long-haul jets. As in other parts of Africa, wider cell phone coverage will progressively change the way the South Sudanese live. In Kenya, mobile banking allows customers to pay their bills, send remittances, purchase goods and services, move funds, and even take out small-business loans. South Sudan, precisely because it is not constrained by traditional infrastructure, has the opportunities to innovate in numerous other ways as well, skipping some steps other countries had to take. Large-scale agro-industrial leasing, which has already begun to establish itself, is another enterprise that could benefit South Sudan. Eventually, there can be attractive investment opportunities from alternative energy to high-end tourism.

In many ways, South Sudan can benefit from the experience of its neighbors. President Kiir mentioned Rwanda yesterday as an example of how to handle high technology. Rwanda has transformed rapidly in the aftermath of genocide by committing to comprehensive development, strategically engaging with donors, sustaining efforts to root out corruption, investing in human capital, and empowering women. South Sudan has started down much the same road. I was encouraged that a new poll in South Sudan found that 86 percent of South Sudanese said they would vote for a woman to hold elected office. The Government's aid-coordination model, with its High-Level Partnership Forum, has promise as a means to ensure development projects are locally owned. The South Sudanese plan a "one-stop investment shop," similar to one I visited in Kigali a few weeks ago. According to an IFC-World Bank report, the average start-up time for a new business in Juba is 15 days, not a great deal more than the OECD average. But the cost of starting a business in South Sudan is as much as 250 percent of per-capita income -more than twice the average in sub-Saharan Africa. South Sudan is on the right track, despite the enormity of the challenges it faces.

In all of its development endeavors, South Sudan can count on the deep and abiding support of the United States. Our friendship goes way back. Our peoples enjoy a shared and special bond. So today, the United States is doing and planning a great deal to encourage forward-looking investment. Our Treasury Department has cut through the tangled issue of sanctions so that investors can now enter the South Sudanese oil business without fear of running afoul of Sudan sanctions regulations. USTR is reviewing South Sudan's eligibility for the Generalized System of Preferences and duty-free treatment under the African Growth and Opportunity Act. And USAID has designed an innovative investment facility, to be used in partnership with African banks.

South Sudan is blessed with a tremendous amount of international good-will and support. We are ready and eager to help South Sudan realize its vast potential. Yet, a new nation gets to be new only once and young for only a very short period of time. This is South Sudan's moment. We are proud to stand with you as you seize it. Thank you.

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PRN: 2011/314