Global supply chain in crisis? How business can play a diplomacy role in the Sudan war

Sudan, the third-largest country in Africa and the Middle East, borders seven countries and straddles the world’s longest river. The current war, which began in April 2023, poses an existential crisis for the region and globally.

To understand the significance of Sudan, it is instructive first to consider the role of natural resources. The World Bank has examined this role in various countries, where natural resources have been exploited for international markets, leaving local communities underdeveloped and conflict-prone.

The historical, geopolitical and economic importance of Sudan should not be underestimated. The country has drawn significant foreign investments over the years. Agriculture plays an important role in the country's economy, which is backed by immense gold reserves. Sudan is also the homeland of early human civilization, with UNESCO World Heritage sites of temples, tombs of kings and queens, and 255 pyramids – more than any country has constructed on earth.

One of Africa’s most fertile lands, Sudan is considered the world’s great breadbasket. The global export disruption caused by the Ukraine war led to renewed efforts to boost Sudan's wheat production to alleviate rising prices.

However, the ongoing war and the region’s vulnerable food supply chains will make it unlikely that Sudan achieves its goal of becoming a wheat exporter. This crisis will further complicate the region’s food systems, making global markets more fragile. As a result, increasing demand and decreasing supply will lead to higher prices for international consumers.

In addition to its fertile lands, Sudan serves as a bridge between North, Central, Southern and Eastern Africa. The country’s Red Sea coastline is the second largest after Saudi Arabia and a critical travel point for thousands of Muslims from across Africa who make the annual Hajj pilgrimage to Mecca. Sudan is one of the largest hosts of refugees in Africa, with over 1.1 million registered refugees and 3.7 million internally displaced, according to UNHCR. The war is likely to exacerbate the refugee crisis in the region.

Beyond the region, Sudan has a ripple effect on the global economy. The country is the world’s largest exporter of oil seeds such as groundnuts, sunflower, soybean, safflower and sesame. It is also Africa’s third-largest producer of gold after Ghana and South Africa. Sudan has major oil reserves and produces over 80% of the world’s gum Arabic, a miracle commodity used in soft drinks, food additives, paint, cosmetics and more. About 50% of Sudan’s gum Arabic is acquired by European companies.

Since the current conflict erupted in April 2023, uncertainties around supply chains have left international consumer-good companies in panic, rushing to stock up on these essentials. Sudan’s main trading partners are the United Arab Emirates, Saudi Arabia, China, India, and Italy. Russia is also a major trade partner, with strengthened ties that is leveraged for military support.

Evaluating Sudan’s significance, the international community cannot afford to ignore the current war, which has the potential to upend critical flows of essential goods to countries around the world. As political efforts are made to mediate the conflict and chart a path to peace, there is a critical role that corporates play in ceasefire efforts.

Through strengthened global collaboration, effective leadership and engagement of the private sector, international business leaders can help combat crises that threaten the security of the global economy.

Peace talks and negotiations for a lasting ceasefire in Sudan need to be complemented by commitments from international companies to scale back their activities and investments in the country with companies owned by military and paramilitary leaders.

Businesses have the influence, network and resources to advance peace efforts in Sudan. The corporate diplomacy exemplified by the business exodus from Russia following the war in Ukraine stands as a good example of the influence businesses can have in conflict situations. Sudan needs similar private sector action, particularly in major industries like mining, oil and gum Arabic, which wield significant economic power and can positively impact the ongoing conflict in multiple ways.

Companies and foreign investors should prioritize transparency in operations within their countries and adhere to laws and international norms to avoid direct or indirect support to warring factions. Robust monitoring mechanisms are needed to ensure company profits are not fuelling conflict. Businesses in lucrative industries like mining and extraction must meticulously monitor revenues and payments to de facto leaders involved in the conflict. This ensures that doing business benefits people rather than contributing to military factions supporting war efforts.

Local and foreign companies should create conducive environments for peace by establishing efficient supply chain traceability systems. For instance, leveraging technologies like blockchain to track the origin of the raw materials can help comply with legal and ethical standards to prevent engagement with suppliers linked to warring factions.

Promoting transparency and traceability in the private sector can help prevent corruption and discourage factions from exploiting national resources for war. To achieve this goal in Sudan, regional and global leaders must be committed to promoting peace and stabilizing communities in the country, which will ultimately benefit businesses, people and the planet.

The private sector can also contribute to diplomatic efforts by taking decisive action on issues that matter to consumers, as buyers expect companies to take a strong stance against oppressive regimes and harmful work practices in countries where they do business.

If corporations remain silent on important geopolitical issues that affect their communities, they may face accusations of connivence. Through their supply chains, investments, innovations and environmental and social actions, businesses have a significant impact on the world. In addition to creating value for shareholders and customers, companies also have a responsibility to add value to society.

The private sector has the power to take critical measures in ending the proxy war in Sudan and help build resilient communities by scaling up investment for quality education, decent employment and healthcare – one of the most effective ways to end a cycle of protracted conflicts.

Multilateral action will help pressure factions engaged in the war and prevent a negative ripple effect in the region and globally. As the conflict rages, livelihoods are interrupted, mortality rises and diseases spread. Generations’ worth of education is lost as systems collapse and trauma persists.

Wars are not temporary interruptions to otherwise smooth development. They come with such high direct and indirect costs that even if the post-conflict recovery is dramatic and sustained, it will still take generations for the country to recover, creating a never-ending cycle of humanitarian crises that will impact the world.

To further strengthen the role of diplomacy in conflict resolution, it is crucial to enhance collaboration between the private sector, government and civil society. It is, therefore, imperative to create a platform that connects business, government and diplomatic leaders to help companies make informed decisions on corporate diplomacy and advance comprehensive geopolitical dialogues, stronger networks and greater access to diplomatic resources.