In all likelihood, 2011 will see the birth of a new nation in what is now southern Sudan. There is little doubt that the southern Sudanese will vote for independence in January, setting in motion a six-month transition period to statehood. With only about 100 days left before the referendum, U.S. Secretary of State Hillary Clinton recently called Sudan “a ticking time bomb,” capturing the anxious mood in Washington. Many officials, activists, and experts are worried that Sudan could be headed back to the sort of civil war that has killed two million Sudanese since the 1950s. They are convinced that Omar al-Bashir’s government in Khartoum will not cede a fourth of the nation’s territory–and three-fourths of its oil reserves–without a fight. 

A return to war, however, is not likely and certainly not inevitable. Both Khartoum and Juba (the south’s capital) have powerful incentives to avoid that outcome. Moreover, unlike Palestine/Israel, the territory in dispute is not considered holy land and there are no real foreign spoilers. In fact, those nations with the most interests in Sudan, regardless of whether they lean towards Juba (the United States) or Khartoum (China and Egypt), stand to lose much from conflict.
 
War in Sudan would embroil the Obama administration in another costly and politically damaging international crisis, threaten China’s energy security (seven percent of its oil imports come from Sudan) and create uncertainty in Cairo regarding upstream cooperation on the Nile, the lifeblood of Egypt. It would also imperil major land investments in Sudan by Arabian Gulf-based agribusiness firms and governments that see the country as a potential breadbasket. Diplomats in Beijing and Cairo, having read the tea leaves on the likely referendum outcome, have launched charm offensives in Juba, including major new investment initiatives in the south to safeguard their core energy and water security interests. 
 
While north and south have repeatedly locked horns over oil revenues since the 2005 Comprehensive Peace Agreement (CPA) was signed and both sides have used upwards of 30 percent of these revenues to build up their militaries, oil might actually be a force for compromise in the future. Because most of the reserves are in the south but the key infrastructure (including pipelines and port) run north, the two sides are locked into a kind of mutual dependence. A southern based pipeline is years and billions of dollars away, if it materializes at all. This reality undermines dangerous zero-sum calculations in both capitals. With over 60 percent of Khartoum’s budget and a staggering 98 percent of Juba’s budget tied to oil revenues, neither side can afford to risk losing this cash cow. 
 
Because losing the south remains a bitter pill for Khartoum to swallow, it is essential that a fair oil revenue sharing model persist over the next five or so years, making any shift from the current 50-50 split towards an eventual tilt in Juba’s favor very gradually. The United States will have to lean hard on Juba to reign in its maximalist demands on oil revenues.
 
The two million southerners who will likely keep working in Khartoum and sending remittances to their families each month will be another element of this economic bond, keeping the regions intertwined at the most basic family level. Khartoum could potentially revoke the migrants’ working rights or expel them, but this would undermine its own economy and provoke Juba to retaliate.  
 
The prospect of normalized relations with Washington will also have a moderating impact on Khartoum. The Obama administration recently proposed a set of incentives long sought by the Bashir government, following nearly two years of internal wrangling in Washington between Sudan hawks and those who favor an accommodation similar to the one made with Libya in 2003. If Khartoum abides by the referendum result, the United States will begin to lift restrictions on non-oil trade and investment. Upon the fulfillment of the Comprehensive Peace Agreement in July and resolution of the Darfur conflict, Washington will move to lift sanctions, remove Sudan’s designation as a state sponsor of terrorism, normalize relations and support Sudan's efforts at the IMF and World Bank to clear its $38 billion debt burden. 
 
What Could Go Wrong
 
None of this assures a peaceful divorce between north and south, however, and doomsday scenarios are easy to conjure, for example:
 
Khartoum seizes oil fields near the border: This could be triggered by a breakdown in referendum and final status negotiations, leading to a unilateral declaration of independence. The Bashir administration could respond by seizing control of the major oil fields in the south, likely leaving pipelines exposed to sabotage. This could potentially take up to 400,000 barrels per day off-line (hitting CNPC, Petronas and ONGC hard, as well as China). The Heglig oil fields, Sudan’s largest, could become a key flashpoint, as each side envisions the Chinese-operated fields as falling firmly within its borders. 
 
Khartoum arms proxies to destabilize border regions: It is likely that Khartoum will engage in proxy conflict to some degree, but to destabilize entire regions such as Unity, Abyei, or Upper Nile by playing on ethnic or resource-based rivalries (especially between Dinka and Nuer communities) would require a systematic and sustained effort. It would also invite counter-offensives by southern forces into northern border regions such as South Kordofan, potentially touching off a return to war. 
 
There are plenty of other risks too. Land disputes between Dinka farming communities and Misserya Arab nomads in Abyei could erupt after the referendum, drawing in the soldiers and militias amassed along both sides of the border. A violent standoff between the Sudan People’s Liberation Army and the Sudan Armed Forces in Abyei two years ago nearly unraveled the CPA. Despite an international border ruling last year that situated much of the disputed district’s oil in the north and its most fertile land in the south, the actual border remains dangerously undemarcated, along with the rest of the 1,800 kilometer border.  
 
Another risk that is easy to envision is a bitter standoff after the referendum, with Khartoum rejecting the result on the grounds that the process was fatally flawed and therefore not credible. This would likely provoke a unilateral declaration of independence by the south, placing the international community in a polarizing diplomatic conundrum on whether to recognize the south as an independent nation. Such a scenario would divide the African Union and the UN Security Council (the Arab League would likely back Khartoum en masse in this scenario), probably resulting in an impasse that raises diplomatic tensions between Khartoum and Juba’s allies while leaving the question of southern nationhood unresolved. Nations worried about the precedent set for other secessionist movements in their own regions might well side with Khartoum in the dispute.
 
The six-month transition period between the referendum and the formal birth of the nation could, however, create a cushion of time to allow for workable compromises on the final status issues that will help both sides – and the international community – avoid the worst-case scenarios. The good news is that serious talks are now finally underway between high-level National Congress Party and the Sudan People’s Liberation Movement negotiating teams, with some compromises reportedly in the works on oil revenue sharing. The United States, African Union, and the UN have become noticeably more engaged in the pre-referendum planning and the post-referendum accommodation. 
 
The next three months will be pivotal in preparing for a credible referendum (no easy task in such a vast region with almost no infrastructure) led by the UN and fast-tracking final status negotiations. Progress on the latter will help ensure that the referendum, and prospect of southern independence, does not fall prey to dangerous zero-sum calculations in both capitals that could otherwise detonate this ticking time bomb.
 
Philippe de Pontet is director for Africa at the Eurasia Group.