20100810
reuters

JUBA Sudan (Reuters) - Corruption, a small private sector and the reluctance of southern Sudanese to farm the land are stalling development just months before the region could become the world's newest country, a minister said on Tuesday.

After a 2005 peace deal ended a two-decade civil war with the north, which claimed 2 million lives, the semi-autonomous, oil-producing south is widely expected to vote for full independence in a plebiscite due on January 9, 2011.

But many analysts say the under-developed region will struggle to survive as an independent economy.

Awut Deng, the south's minister for labour, said the government could only employ so many people. Others seeking work must look to the private sector.

"The government has limited resources to pay employees and also to deliver services to our people ... we will have difficulties unless we develop the private sector so that employment is increased," Deng told reporters in Juba.

While the south's capital -- where sprawling hut communities encircle low-rise government and aid agency compounds -- has grown rapidly since the 2005 deal, much private investment is from small-scale Kenyan, Ugandan or local entrepreneurs.

Considerable hope is pinned on the region's oil resources, and the promise that the south could secure billions in oil revenues from wells inside its borders if it successfully moves to independence after the referendum in January.

But the government spends so much on wages for a bloated bureaucracy and army that little is left in the coffers to pay for oil infrastructure such as a refinery or a pipeline in the landlocked south.