Foreign firms fill void in Sudan

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KHARTOUM, Sudan -- China, India, Malaysia and some European countries are dramatically expanding business ties with Sudan, taking advantage of U.S. sanctions that bar American companies from operating here, local officials and foreign diplomats say.

Companies from those countries -- some of which are at least partially state-owned -- are investing billions of dollars and working closely with the Khartoum government with little concern about its role in recent mass killings in Sudan's Darfur region, Western diplomats say.

"They couldn't care less how many people are dying in Darfur -- that's not how they conduct their policies," one senior diplomat said. "Everyone has an agenda here. Sudan has oil, gold and a major port on the Red Sea."

These companies also are replacing old American technology sold before the sanctions, which were imposed unilaterally by Washington in stages during the 1990s to punish Khartoum for its support of terrorism and human rights abuses, the diplomats say.

"Most of the cotton-gin machinery here is American, but they can't get spare parts. So Chinese companies provide inferior -- but nevertheless suitable -- replacement parts," another senior Western diplomat said.

"They are also starting to replace those machines. They are signing contracts for $20 million -- and it's not only the sales, but the subsequent business of supplying parts for the machines," he said. "So the Chinese are beginning to take this piece of the market away from the Americans."

Chinese companies also are building oil refineries, pipelines and production facilities. Officials in Beijing have boasted that they helped Sudan change from an importer to exporter of oil.

U.S. companies traditionally had been among the most active foreign investors in Sudan. Their fortunes, however, worsened when relations between the two countries began to deteriorate after the 1991 Gulf war, during which a fundamentalist Islamic government in Khartoum supported Iraqi dictator Saddam Hussein.

In the early- and mid-1990s, Sudan provided refuge to some of the world's most-wanted terrorists and criminals, including Osama bin Laden, Carlos the Jackal and Abu Nidal. Because of its support for those and other extremists, it was blacklisted by the State Department as a state sponsor of terrorism in 1993.

In 1996, the U.S. Embassy in Khartoum was closed, and a year later, Washington imposed economic, trade and financial sanctions. The embassy reopened last year, but with only a skeleton staff.