A bartender counts South Sudanese pound banknotes in Juba, South Sudan. (Photographer: Trevor Snapp/Bloomberg)

Gulf Powers Promise Sudan $3 Billion in Latest Bailout for Ally

(Bloomberg) -- Oil-rich Saudi Arabia and the United Arab Emirates have just written another check to bail out their latest troubled ally.

The Gulf nations on Sunday pledged $3 billion to Sudan after longtime President Omar al-Bashir was toppled this month. In a statement, they said they’ll deposit $500 million in Sudan’s central bank to ease pressure on the currency. The remainder will go toward food, medicine and fuel.

The two nations seek to maintain their political influence and prop up allies in the Middle East and beyond, even as lower oil prices weigh on their own economies. Over the past two years, they’ve promised aid to countries including Bahrain, Jordan, Yemen and Pakistan.

Reasons for the support vary. Along with Kuwait, they signed off on a bailout package for Bahrain to avert a currency devaluation that could have harmed the Saudi riyal. Jordan was teetering on the brink of an economic crisis that threatened the stability of a fellow Sunni Arab monarchy.

The use of “checkbook diplomacy” is “back in vogue in Saudi Arabia, and this trend will only intensify,” said Hani Sabra, founder of Alef Advisory, a New York-based consultancy. It’s one of the few options for the world’s biggest oil exporter, which has struggled to “project influence through raw military power” and is competing with Iran and cash-ready Qatar to hold sway in the region, he said.

Stable Anti-Islamists

Sudan is one of the leading contributors of troops to the four-year Saudi-led war in Yemen, where the kingdom and the U.A.E. are fighting rebels allied with Iran. Al-Bashir’s government, which touted its Islamist credentials on taking power in 1989, renounced ties with Iran when it joined the Gulf coalition in 2015.

“Abu Dhabi and Riyadh very much want the Sudanese military to maintain the status quo,” said Sabra. “The two powerful Gulf states want what they see as stable, anti-Islamist regimes in place in the region.”

Gulf Powers Promise Sudan $3 Billion in Latest Bailout for Ally

The pledge may give some breathing space for Sudan’s military, which overthrew al-Bashir on April 11 and is under pressure from protesters, the African Union and U.S. to give way to a civilian government.

Africa’s third-largest country, Sudan has been rocked by four months of fatal unrest sparked by soaring living costs. Demonstrations continued in the capital, Khartoum, and other cities over the weekend.

‘Sense of Duty’

The funds were pledged “out of a sense of duty toward the Sudanese people,” Saudi Arabia and the U.A.E. said in the statement.

The main opposition group said Sunday it was escalating its protests and halting talks with the army council, accusing it of not being serious about surrendering power and remaining dominated by veterans of al-Bashir’s 30-year regime.

Many participants at a long-running sit-in outside army headquarters in Khartoum expressed displeasure with the Gulf pledge, describing it as interference in their uprising.

“We don’t want aid from Saudi Arabia, even if we have to eat fuul and ta’amiya,” went one prominent chant, referring to an inexpensive breakfast of mashed beans and falafel.

Arab Spring Echoes

Al-Bashir, who had himself led a coup to power, became the second leader on the continent to be forced from office this month in the face of nationwide demonstrations, following Algeria’s Abdelaziz Bouteflika. The events have stirred echoes of the Arab Spring uprisings that rocked the region from 2011.

The military council’s head, Abdel Fattah al-Burhan, said Sunday in televised comments that it’s ready to hand over power as soon as Sudan’s political factions agree on a way forward. He also announced plans for a Sudanese delegation to visit Washington to discuss the U.S. removing the country from its list of state sponsors of terror, where it was placed in 1993.

Al-Bashir, who’s 75 and wanted by the International Criminal Court for alleged war crimes and genocide, was last week moved to a notorious prison in Khartoum. Prominent members of his National Congress Party have since been jailed too.

Al-Burhan on Sunday said more than 7 million euros ($7.9 million) had been found in al-Bashir’s home. Local media reported the previous day that the ex-president was being investigated for alleged money laundering.

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