The Dartmouth Beacon

The US imposed economic sanctions against the Sudan in late 1997, citing its links to international terrorist organizations. Before then, however, American companies were free to conduct business with the Sudanese, and, as we can expect, a few of them tried to make a quick buck. The following is the story of one such company. While it is based on true facts, the names of individuals and companies have been changed to respect their privacy, unless otherwise stated.

In 1996, a US company, the Afro-American Telecom Corporation (AATC), won a contract to build the telecommunications infrastructure for SudanBell, the Sudanese government’s attempt to privatize its telephone service. SudanBell wanted to build two hub satellite stations in Khartoum and Port Sudan, and substations in each of the provinces. Once this was done, SudanBell would be licensed to operate as a long distance carrier, and it would be able to expand its services as profits dictated. Why the government would want telephone service in each of the provinces is still a mystery, but SudanBell’s plan was to declare its license valid with the smallest investment possible, and make comfortable profits with its urban customers.

AATC assigned the construction work to its Sudanese agent, the British educated Dr. Kibosh (his real name), who, pardon the pun, almost put the kibosh on SudanBell’s plans with his ever-rising budget. At 6 foot 4 inches tall and 300 pounds, Kibosh towered over almost everyone in Khartoum. He was one of the most influential civil contractors in the Sudan at that time. One of his major accomplishments was the construction of the airport road in Khartoum, which, it must be admitted, was a tad bit uneven. In his defense, he had claimed that it was the best his workers could have done without a steamroller. As noted by an AATC executive, he was “literally at the top of the Sudanese food chain." Quite obviously, Kibosh played a major role in the successful AATC bid.

Bringing long distance to the provinces meant far less than what you might expect, but only in theory. The substations were to consist of little more than a concrete shelter for the equipment – a satellite dish, a phone and a desk – and an attendant who would provide the necessary services for clients wishing to make long distance calls, or “trunk calls” as they would put it. The clients would pay for their calls, generally in kind, and the attendant would ensure that proper financial records were maintained and that the place was kept in order.

In practice, however, this task was going to be difficult, if not entirely impossible for a variety of reasons. Most importantly, there were security issues - at least one-third of the country was either in open rebellion or otherwise ungovernable. The main problem that Kibosh faced was sending AATC engineers to remote sites to set up the necessary equipment. Civilian curfew was imposed after dark throughout the country, and fighting resumed on the outskirts of most towns. Now, the engineers had to travel to each installation with army escorts and had to return to Khartoum well before nightfall, which considerably limited the number of sites that they could work on. The only solution was to hire Canadian mercenaries who specialized in installing equipment in hostile territories. These soldiers of fortune did not mind the danger, but their large hazard surcharges significantly increased Kibosh’s construction budget.

And then there were questions of profit for the Doctor. Kibosh did not quite want to spend all the funds in construction – after all, he had to make enough money for that palatial house in Khartoum and he had to pay off his contacts in the government for allotting him the contract. Which meant that he had to lower the quality of the cement used in the construction and make other necessary cutbacks. The only hurdles in his path were the government site supervisors, but he soon took care of them. The Doctor had only started building his first station, when a SudanBell site engineer noticed cracks in the walls on one station. “You need to do a proper soil test before laying the foundations,” he complained to Kibosh one day. In response, the Doctor grabbed a shovel and holding it up as if was about to attack the engineer exclaimed, “You want to see my soil tests? This is how I do my soil tests.” Eyeing the huge Dr. Kibosh armed with the shovel, the site engineer approved his testing techniques, and construction proceeded at full pace.

Which brings us to the last and final obstacle – funding. SudanBell would pay AATC through foreign sources and AATC would then transfer the necessary amounts to a bank in Khartoum to pay Kibosh. For this it would have to set up an account in the Sudan, but there weren’t any international banks left in Khartoum to do business with, because of the civil war. The last American bank to operate there was Citibank, but the country director took a powder to Cairo after a kidnapping fiasco. That left the local and regional banks to consider but they were notorious for their poor security – funds would simply disappear and no one could account for them. The following is an actual conversation between an AATC executive and the President of one of the largest regional banks in the Sudan:

Despite that conversation, AATC did transfer money to the bank in question, but it solved the problem by paying off Kibosh before the bank employees could get a hold of the funds.

Now, AATC had received most of the monies promised, but as the project neared completion, the cash flow slowed down considerably. SudanBell was unwilling to transfer all the funds for reasons I’d rather not delve into at this time. This problem, however, was almost miraculously solved – under international pressure to prevent the mass murder of Christians in Southern Sudan, President Clinton declared a 30 day moratorium after which the United States would impose an economic boycott of the Sudan. Sensing opportunity, AATC withheld the final equipment shipment, which included several critical components. With less than a week left before the boycott went into effect, SudanBell transferred the funds, and the construction was completed.

That pretty much describes the difficulty of doing business in the Sudan seven years ago. Today, things haven’t changed all that much, especially when it comes to comes to corruption. But conditions, on the whole, have improved for foreign investors in Sudan, but certainly not for American companies, since the boycott continues. With the government’s successful campaign to purge the oil-rich South of any opposition to its plans, oil production started rising dramatically in 1999, providing much needed revenues for the state. Asian oil companies, especially Chinese, today run the oil business, to the detriment of western corporations. As production continues to rise, Sudan is set to become one of the largest oil exporters, with some estimates putting it even beyond Saudi Arabia in the near future. Perhaps the most encouraging news is that the December 2003 peace accord with the Southern Christians allocates them a much larger share of the oil profits, and rightly deserved.

So, the next time you catch a cab in New York or Washington, DC, and your driver is Sudanese, talk to him about his homeland. Ask him about the “expatriate tax,” about the infamous dirt-packed cabs of Khartoum, and about the legendary British General Charles “Chinese” Gordon. I am sure he will have many tales to regale you with.