Sudan is endowed with rich natural resources, including oil, and has the potential to become a major agricultural producer. And yet it is one of the least developed countries in the world. Prior to the global financial crisis, the Sudanese economy has been one of the fastest growing in the world despite the sanctions,. The Nominal Gross Domestic Product (GDP) grew from US $ 9.9 billion (IMF 1980) to US $ 57.9 billion (1) . The GDP growth is expected to be around US$ 52.2 billion in 2009. In recent years, growth rates increased from 7.1 % (2003) to 10.2 % (2007) (2). In 2006, the levels of foreign direct investment (FDI) were among Africa’s highest with over US $3.5 billion, stimulated by the signing of the CPA and encouraged by policy reforms, favourable energy and crop prices, rising urban consumption, and macroeconomic stability. For 2009 however, due to the global shock resulting in lower global oil prices, stagnating domestic oil production and related reduction in government spending (3) the annual growth rate is estimated to slow down to 3.9 percent (4). Sudan Net FDI also registered a sharp drop by some US $ 500 million already by June 2008, partly due to the completion of several major infrastructure projects, as well as net private transfers, mainly remittances, falling by close to US$ 800 million compared with 2006 (5). The global financial crisis is expected to further reduce both categories by another 30- 36% (6). A recent IMF report ranked Sudan as one of the most vulnerable low -income countries in the global financial crisis due to its high vulnerability to trade, aid and remittances shocks. IMF adjusted 2009 GDP growth projections for Sudan downwards by 6.7%, representing the fourth largest adjustment of the 71 low-income countries assessed (7). Past growth was not sufficiently broad-based. Investments and services are concentrated in and around Khartoum state and to a lesser extent Juba, the capital of southern Sudan. The significant disparities between urban and rural areas and between regions contributed to growing inequalities and an increasing urban informal sector accounting for more than 60% of GDP. This state of affairs has been encouraging a rural-urban migration that might weaken the agricultural productivity and deepen poverty in both urban and rural areas. In addition, due to the global shock, especially regarding oil prices and international lending, but also with respect to expected reductions in FDI, remittances and aid, Sudan is about to face significant financing shortages for its 2009 federal budget, and will have to drastically reduce its public spending, affecting government’s capacity to invest in MDGs and poverty reduction. Poverty is widespread in Sudan. UNDP’s 2008 Human Development Report HDR ranked the country 147th among 177 countries compared to position 141 in 2006. According to a 2007 joint World Bank-UNDP mission, about 60-75% of the population in the North and 90 per cent in the South is estimated to be living below the poverty line of less than US $ 1 a day. The hardest hit by poverty are people living in rural areas, in particular women and internally displaced people who constitute about 12% of the population. The lack of formal schooling and high levels of youth unemployment is turning the potential of the young generation from an asset into a challenge for the future. Besides Khartoum state, the infrastructure (roads, railways, power and water) is either non-existent or underdeveloped across the country. As a Member State of the United Nations and in signing the Millennium Declaration, Sudan has committed itself to reducing by half the proportion of people living in extreme poverty, which is the first of the eight Millennium Development Goals (MDGs) - a goal that developing countries aim to have achieved by 2015. In the south, the newly established Government of Southern Sudan (GoSS) has made the MDGs one of its priorities. UNDP's support in the area of poverty reduction focuses on improving the national capacity to plan and monitor a comprehensive approach to the reduction of human and income poverty, in line with the Millennium Development Goals and the UN Development Assistance Framework (UNDAF) for Sudan. UNDP’s strategic interventions also aim to develop the capacity of the Government of National Unity to manage, coordinate external assistance, and facilitate aid planning and monitoring and evaluation mechanisms. In Southern Sudan, UNDP’s efforts focus on enhancing economic planning, budgeting and reporting in Southern Sudan, in line with the Government of Southern Sudan’s development priorities and economic development needs. UNDP’s assistance also aims to raise public and government awareness of the importance of prioritizing development needs within the overall framework of the Millennium Development Goals, and to ensure that the Southern Sudan Commission for Census, Statistics and Evaluation is able to advocate and monitor the MDGs. In addition to promoting an institutional, social and economic environment conducive to poverty reduction, UNDP, in close collaboration with the Microfinance Unit of the Central Bank of Sudan, is directly supporting microfinance and micro-business development initiatives(8) as well as pro-poor value chain integration(9) in Sudan, while supporting a variety of income-generating activities to reduce poverty, and increase food security and employment in rural Sudan, including through the Sudan Recovery and Rehabilitation Programme. 1) IMF projection for 2008 2) 1. and IMF First Review of performance Under the 2007-08 Staff-Monitored Program, June 2008, p.21 3) World Bank Sudan Economic Brief April 2009 4) International Monetary Fund, World Economic Outlook Database, April 2009, www.imf.org 5) IMF First Review of performance Under the 2007-08 Staff-Monitored Program, June 2008, p.6 6) IMF Report on the implications of the Global Financial Crisis for Low-Income Countries, March 2009, p.48, source: http://www.imf.org/external/pubs/ft/books/2009/globalfin/globalfin.pdf 7) IMF Report on the implications of the Global Financial Crisis for Low-Income Countries, March 2009, p.50 8) This relates to UNDPs Microfinance & Micro-Business Development Support Initiation Project to which you can link it 9)This relates to the Darfur and Kassala Livelihoods Projects plus upcoming project. Currently you can link it to the Darfur livelihoods project.