Unhappy birthday

ARCHBISHOP DESMOND TUTU, a winner of the Nobel prize for peace, was the guest of honour at South Sudan’s first birthday party on July 9th where he gave a sermon calling for peace. Stop fighting and wealth will follow, he told the young nation’s leaders, calling on them to conciliate former countrymen in the north. There was polite applause, yet on his way out the retired South African prelate was accosted by volunteers shaking collection buckets for the army.

A year after the divorce from the north South Sudan’s outlook is dismal. Oil that was meant to pay for both countries was switched off by the southerners in January during a row over transit fees demanded by the north, for use of the pipelines and ports that take the oil to market. The shutdown has crippled both economies. In the south inflation has climbed from 20% to 80%. Devoid of industry and wholly reliant on imports, the country is keenly feeling the impact of a slide in its currency. The UN, a big employer, is to start paying its local staff in dollars in view of the crisis. The government has so far ignored calls to adopt the dollar. Making matters worse, a border conflict with rump Sudan has sent 170,000 refugees into the south, where they are struggling to survive.

South Sudan is stuck at the bottom of global development indices and, by most measures, still going backwards. A look at a UN map of the country shows 30 simultaneous emergencies—mostly areas where international aid is needed to keep people alive. More than half the country’s estimated 9m-plus people need food aid.

If no deal is struck to restart oil production, the new state could start to collapse. By some estimates, by October the government in Juba may be unable to meet its payroll. The incentives for both sides to compromise, perhaps at face-to-face talks in the Ethiopian capital, Addis Ababa, scheduled for early next month, are strong. But the gap between them is big. The north is demanding $10 billion over four years as compensation for the loss of southern oilfields. The government in Juba is ready to offer $3 billion. That leaves mediators, led by Thabo Mbeki, a former South African president, scratching their heads. China, which trades with both sides and would lose a lot from a new conflict, offered to bridge some of the divide in February by buying oil at above-market rates.

Maybe the approaching economic crunch will concentrate minds. Nothing else seems to. War loomed in the first half of the year after northern air raids and a southern counter-attack by land. This “negotiation through extremism,” as it has been described, is favoured self-defeatingly by both sides. The wartime mentality is reasserting itself in South Sudan. Collection committees have appeared around the country, raising money for the guerrilla movement of the civil-war era that is now the country’s standing army. Businessmen like Tong Albino, who has been waiting two years to get paid for food he imported for the army, are now asked by the Chamber of Commerce to fund frontline forces.

Whereas a recent financial squeeze in the north fomented protests, southerners for the most part remain stoic—as they did during decades of war. The government is lucky that the people here are so understanding, says Mr Albino. They never had much in the first place. When the oil started flowing after a 2005 peace deal with the north that ended the long war, the lion’s share went to the army. Officials stole much of the rest. This has made foreign donors reluctant to give more aid money.

Under acute pressure from America to send an anti-graft signal, the south’s president, Salva Kiir, wrote a letter to 75 top officials in May accusing them of looting more than $4 billion. He offered an amnesty to anyone who returned funds to a bank account in neighbouring Kenya. Some angry ministers muttered that the president, a hero of the war, should resign. One of his advisers, an American, was accused of writing the letter and has since left Juba for his own safety.

Meanwhile the capital is littered with monuments to graft. On the outskirts an imposing sign advertising the anti-corruption commission stands in front of an empty plot of land. The funds for constructing its office were lost somehow and the largely toothless commission has had to rent premises elsewhere. Jok Madut Jok, a junior culture minister, says that some colleagues are getting rich on bribes. Still, there is little nostalgia for the past. One year of independence was unlikely to cancel out 50 years of destruction.