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Sudan clashes over austerity measures

South Sudan flag

South Sudan flag

Published Jun 20, 2012


Khartoum - Sudanese riot police armed with batons and tear gas fought with students protesting for a fourth day against tough austerity measures the finance minister set out in detail on Wednesday.

Student groups, inspired by the Arab Spring uprisings, have led rallies in Khartoum against planned government spending cuts and sought to galvanise anger over price rises into a wider movement to topple military ruler Omar Hassan al-Bashir who has been in power since a 1989 bloodless coup.

The Arab-African nation has faced soaring food prices and a weakening currency since South Sudan seceded a year ago, taking with it about three-quarters of the country's economically-vital oil output. But previous demonstrations have failed to gain broader momentum.

Riot police carrying batons blocked off a major road and chased scores of students in the streets around the University of Khartoum on Wednesday, two witnesses said. A third witness estimated “hundreds” of students joined the protest.

The smell of tear gas hung in the air.

The student demonstrators chanted “the people want to overthrow the regime” and threw stones at the police, the witnesses said. There was no immediate comment from the police.

Police also used tear gas and batons to break up a protest of about 400 students chanting “no, no to inflation” at a university in the suburb Omdurman, two separate witnesses said.

Sudanese authorities released an Agence France-Presse correspondent earlier in the day, after detaining him at the University of Khartoum, the French news agency said.

British national Simon Martelli had been detained at around midday on Tuesday while taking pictures and talking to students. He was held for more than 12 hours without charge, AFP reported.

Officials at the security services and the Foreign Ministry were not immediately available to comment.

Tensions have been running high over government plans to gradually phase out fuel subsidies, cull the number of civil servants on its payroll, and raise taxes on consumer goods, banks and imports to plug its budget deficit.

Finance Minister Ali Mahmoud detailed the measures on Wednesday, saying the government would hike the price of a gallon of petrol by five Sudanese pounds, pushing it up to 13.5 pounds ($2.50) from 8.5 pounds.

The government would also raise the price of a gallon of diesel by 2.2 pounds and a canister of cooking gas by 2 pounds, he told reporters. The price of aircraft fuels would be totally “liberated,” he said.

A “development tax” on imports would be raised from 10 to 13 percent, a value added tax would go up from 15 to 17 percent, and a tax on banking profits would double from 15 to 30 percent, he said.

The cuts are expected to become effective if parliament, dominated by Bashir's ruling party, approves them next week.

“These steps will have short-term effects on citizens and will lead to increases in prices, but we will adopt a package of measures” to reduce the impact, Mahmoud said.

The revised budget predicted the deficit would be 3.6 percent of gross domestic product, inflation would reach 25 percent and economic growth would be 2 percent for the year.

Sudan was supposed to keep collecting some revenues from the landlocked South's oil via fees paid to use pipelines and other facilities in the north, but the two failed to set a price.

South Sudan shut down its entire production in January during the row, sparking an economic crisis in that country as well. The South's finance minister on Wednesday outlined a new budget slashing spending.

Some analysts describe the conflict between the two former civil war foes - who have continued to clash along their ill-defined border - as an economic war of attrition, with both sides betting the other will collapse first.

Both economies were already suffering before the dispute after years of conflict, U.S. trade sanctions and mismanagement. - Reuters

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