Southern Sudan is likely to become independent in July 2011 following January's referendum on independence for the south, in which 98.8% of southerners voted for "separation". The president, Omar al-Bashir, has issued a decree accepting the results, and there have been no legal challenges. The secession process is fraught with risks however, as the north and south still need to reach agreement on many aspects of independence, and 20% of their shared border has still to be delineated. Mr Bashir's National Congress Party (NCP), which dominates the north, will seek to exact the maximum political and economic reward for its broad co-operation in the secession process. Although domestic opposition may be emboldened by the south's secession, as well as by recent regional uprisings in Tunisia, Egypt and Libya, Mr Bashir will hope to counter this by boosting his international support following the peaceful referendum. Although the exact shape of the new Southern Sudan state is unclear, its immediate future will be dominated by the Sudan People's Liberation Movement (SPLM), whose control of the regional parliament, state governorships and assemblies is almost total. The dysfunctional, oil-dependent economy, a lack of infrastructure and fears of fragmentation along tribal lines will be the primary concerns of the new state that is expected to come into being on July 9th.

Intensive negotiations are under way to reach a new political settlement as the 2005 Comprehensive Peace Agreement (CPA), which ended the decades-long civil war, will expire in July 2011. In the north, it appears that the NCP, led by Mr Bashir, has accepted that the costs of preventing southern secession are too high. It will instead focus on the political and economic price it can exact for co-operation in the secession process. The NCP will maintain control in the economic heartland of the country, including the capital, Khartoum, with the position of Mr Bashir cemented by patronage networks that span the NCP, the business community, the army and the security services. However, it could face emboldened opposition following the Southern Sudan referendum, from both aspiring secessionists in Darfur and eastern Sudan and political rivals in Khartoum. Fiscal austerity measures will also stoke discontent with NCP rule, and successful popular uprisings in North Africa may inspire anti-government demonstrations. Mr Bashir's position will be boosted as international pressure over the Darfur conflict and the International Criminal Court (ICC) arrest warrant against him for genocide, eases as a reward for accepting southern secession.

The exact shape of the new state in Southern Sudan is uncertain. The SPLM, led by the regional president, Salva Kiir, which dominates the Government of Southern Sudan (GOSS), will try to promote southern unity. However, internal conflict in the south may escalate, especially after independence. Economically, the north and south will remain interdependent for the foreseeable future, particularly because the country's oil, which provides the vast majority of both governments' revenue, is largely located in the south but needs to be exported through a pipeline to Port Sudan in the north. Oil-revenue-sharing arrangements will be extremely difficult and an SPLM-NCP joint negotiating team is discussing this and other difficult issues such as borders and citizenship. The negotiation process will proceed painfully slowly, and some issues may not be resolved until after July.