S. Sudan makes preparations for next world capital

JUBA, Sudan -- The mud-hut town of Juba has earned a promotion to world capital later this year. Only Southern Sudan needs far more than its own currency and a national anthem: Most of the roads here are dirt and even aid workers live in shipping containers.

In a little more than five months, Southern Sudan is slated to become the world's newest country. Final results from last month's independence referendum announced on Monday show that 98.8 percent of the ballots cast were for secession from Sudan's north.

Juba is oil-rich but lacks the embassies and skyscrapers of other world capitals. There was only a mile or two of pavement here just a year ago, and the local archives are stored in a tent. Many, though, see great potential, and are excitedly looking forward to controlling their own destiny.

Entrepreneur Soloman Chaplain Lui, 42, is overseeing the construction of 160 apartments and hotel rooms on a rocky bluff overlooking Juba. The country's largest swimming pool sits here, though its water is murky. He points toward empty fields where he hopes to one day build a mall and a golf course.

"As I talk to you now there are many people flowing here," he said. "A new country is being born."

Two decades of war between the predominantly Muslim north and rebels in the Christian-animist south killed at least 2 million people before a 2005 peace agreement was reached. Residents are jubilant to have their own country at last, though much work remains.

Decades of war and poverty have kept Southern Sudan in a decrepit state, and its 8.7 million people live in one of the least developed regions in the world. The U.N. says a 15-year-old girl here has a higher chance of dying in childbirth than finishing school. An estimated 85 percent of the population is illiterate.

Adding to the challenges, the prices of some everyday goods like sugar, soap and cooking oil have increased by more than 50 percent in recent weeks.

"The list is long," said Athai Peter, 25, as he stood at a job advertisement board outside a U.N. agency on Monday. "The roads are so poor in many places that we have very high food prices."

A new currency must be established. Diplomatic missions need to be opened. And a country name must be chosen.

Critical negotiations still must be held with the north to decide on citizenship rights, oil rights and even the final border demarcation.

The U.S. national intelligence director warned last year of a possible new mass killing or genocide in Sudan over the referendum. That no longer looks likely.

Sudan President Omar al-Bashir on Monday backed the final results and said he wanted to be the first to congratulate the south on their new state.

That prompted Secretary of State Hillary Rodham Clinton to say Monday that the U.S. is reviewing its designation of Sudan as a sponsor of terrorism. She said in a statement that the designation will be lifted, if Sudan does not support terrorism for the preceding six months, promises to continue doing that in the future, and fully implements the 2005 peace agreement.

Al-Bashir's remarks seemed designed to help ensure a continuous flow of southern oil through the pipelines in the north. About 98 percent of Southern Sudan's budget comes from oil revenue.

No one is quite sure how many residents Juba even has. After the 2005 peace accord, people began flooding into the town. Ad hoc settlements sprung up around the city, then expanded as the city ballooned. The settlements have no roads, electricity, or sewage.

Jemma Nunu Kumba, Southern Sudan's minister of housing and physical planning, concedes that the government is playing catch-up. But she notes that foreign investors are knocking on the government's door, hoping to get in on a building boom.

"It is a big challenge that the government has to face. The priorities are competing with the resources we have. But of course it's not something to neglect so we will have to knock at the doors of the international community, of our develop partners, to help us."

Juba has been attracting international investors for years. In 2007, a group of business people from England, South Africa and Kenya spent $1.5 million to renovate a family home into a 16-room hotel known as the Logali House, where the walk-in rate is $275 a night.

General manager Laurie Meiring calls it a "courageous" investment, given that the independence vote was years away and the threat of war lingered.

"I think it's five stars for Juba, even if it would be two to three stars if you were going by the book in Europe or America," Meiring said.

Most Sudanese are unemployed or live hand to mouth on small sales of tea and other goods. Small, Sudanese-run business growth is hard to achieve, said Melody Atil, the founder and managing director of Peace Dividend, an organization that loans money at affordable rates in Sudan. Banks rarely give loans, and she estimates that only 10 percent of the region's work force is employed.

Zach Vertin, a Southern Sudan analyst with the International Crisis Group, said it is essential that the outstanding issues on oil rights and border demarcation get resolved.

"This is critical not only for a peaceful transition between now and July but in order to lay the foundations for a constructive post-referendum relationship," Vertin said. "It's absolutely critical that support continue for this process or we'll end up in July with a whole host of issues outstanding and then you risk potential conflict."