|Bless them. Photo source Wikipedia.|
As people return from the holiday break in early January, the citizens of south Sudan will be voting in a long-awaited referendum. Polls suggest there will be a big majority in favor of southern independence. Boosting people’s hopes for the new state are its oil reserves worth some $2 billion a year.
Sorting out how the North and South will divvy up the benefits of oil is not clear. While most of the oil is in the South, the export and refining infrastructure is in the North. Revenues are currently shared roughly 50-50 but there is no agreement yet over the fate of Abyei, a significant oil producing region on the North/South border.
Still, the prospect of oil revenues is central to southern thinking about financing its way to a better future. Assuming the problems with the north are sorted out, are they right to see their natural resource endowment as the basis for future prosperity?