Commentary | When Politics Disrupts Markets: Lessons from the Canada–U.S. Rift for Economic Planning                                                              

January 1, 2026

Recent developments in the US provide a clear example of how political tensions can rapidly generate economic spillovers. The deterioration in Canada–U.S. relations is now being felt across sectors of the U.S. economy that have long relied on Canadian engagement; most notably, real estate, tourism, and local services in Florida.

Canadians collectively own an estimated USD 60 billion worth of property in Florida alone, and contribute roughly USD 600 million annually in property taxes. As growing numbers of Canadian owners reconsider travel plans or contemplate selling their properties, housing inventories are rising, and prices are projected to decline sharply in key Florida markets. This represents not only a loss of capital inflows but also mounting pressure on local housing markets, already adjusting after the post-pandemic boom.

The broader consequences extend well beyond real estate. Canadian seasonal residents and visitors typically stay for extended periods, supporting restaurants, retail shops, property managers, construction firms, and a diverse range of small businesses. Their reduced presence is now translating into lower revenues for local business owners, job losses for service workers, and a heavier tax burden shifting from visitors to permanent residents. In communities heavily dependent on cross-border tourism, the economic impact is immediate and will be deeply felt.

For developing and transition economies, including Sudan, this case underscores a critical lesson: economic planning cannot be divorced from political relations and international credibility. Investor confidence, capital mobility, and consumer behavior are highly sensitive to political signals. When trust between partners erodes, the lost investment, weakened local enterprises, and fiscal strain follow swiftly.

The Sudan Future Centre for Economic and Planning views this example as a reminder that sustainable economic growth requires stable governance, constructive diplomacy, and respect for international partnerships. These are not abstract principles, but essential foundations for resilient markets, thriving local businesses, and long-term development.

The War in Sudan and its Impact on the Economy, Health System, Security, and Stability! 

April 2025 

Sudan, a Northeast African nation with a long history of civil conflict and authoritarian rule, has once again descended into violent
unrest. Following the ousting of former President Omar al-Bashir in 2019, hopes for a democratic transition were soon thwarted by a power struggle between military leaders. The outbreak of war in April 2023, sparked by the Muslim Brotherhood movement, marked a dramatic reversal in Sudan’s post-revolution trajectory, resulting in a dire humanitarian crisis and the near-total collapse of its economy.

Edem Wosornu, Director of Operations and Advocacy, on behalf of the UN Humanitarian Coordinator, told the Security Council: “In every respect, from the scale of the humanitarian needs to the number of people displaced and threatened by hunger, Sudan is witnessing one of the worst humanitarian disasters in recent memory.”

The current conflict is rooted in the legacy of Sudan’s militarized governance and the uneasy power-sharing arrangement that
followed Bashir’s removal. After the 2019 revolution, a transitional government composed of civilian and military elements attempted to steer the country toward democratic elections. However, tensions mounted between General Abdel Fattah al-Burhan, head of the Sudanese Armed Forces (SAF), and Mohamed Hamdan Dagalo (Hemedti), commander of the Rapid Support Forces (RSF), over the Framework Agreement Document, which calls for a transition towards democratic government led by civilians, by ensuring that the army forces should stay away from politics, along with specific timeline and structure of security sector reform.

It is crystal clear that in April 2023, Al-Burhan and the Muslim Brotherhood Movement betrayed the RSF and plunged the country into
an open war. The Sudanese and international Muslim Brotherhood Movement calls the war in Sudan the War of Dignity, to seize power and restore the Bashir regime in Sudan once again.

The conflict has precipitated a large-scale humanitarian disaster:

         Displacement: The number of displaced persons increased by 27% in 2024, reaching 11.5 million people, while more than 3.3 million individuals crossed borders and have become refugees in neighboring countries or internally displaced.

      Healthcare and Infrastructure Collapse: The healthcare system has largely ceased to function, and basic services such
as electricity and clean water are unavailable in many regions. Before the war, Sudan had approximately 6.500 health facilities and 300 public hospitals. 2 years after the outbreak of the war, an estimated 70-80 percent of the health facilities and hospitals are no longer operational in active conflict zones, and 45 percent are out of service in other areas (WHO 2025.

      Food Insecurity: Over 25 million people require humanitarian assistance, with famine-like conditions emerging in parts of the country (WFP, 2024).

Human rights violations, including mass killings and the use of sexual violence as a weapon of war, have been documented by multiple
international agencies.

Economic Consequences: 

Sudan’s economy, already fragile before the conflict, has experienced systemic collapse: 

Currency Devaluation and Hyperinflation: The Sudanese pound has lost over 90% of its value, and inflation has reached hyperinflationary levels (World Bank, 2024).

Banking and Fiscal Crisis: The formal banking sector is non-functional in most areas, with only 15.3% of the population having access to the banking system before the civil war. The government revenue has plummeted due to the loss of taxation and trade (African Development Bank, 2024).

Collapse of Key Sectors: Agricultural exports have declined due to insecurity and supply chain breakdowns. Gold mining, a major source of foreign currency, has been disrupted by the war and illicit trade.

Unemployment and Informality: Unemployment has soared, and most of the economy now operates informally or under the control of armed groups. The unemployment rate, which was 11.45%, is forecasted to reach 55.68% in 2025.

The economic fallout has compounded the suffering of civilians and poses long-term development challenges, even in a post-conflict
scenario.

Regional and International Dimensions

The conflict has significant implications beyond Sudan’s borders:

Refugee Crisis: Countries such as Chad, South Sudan, Ethiopia, Kenya, Uganda, and Egypt have received large numbers of Sudanese refugees, placing pressure on already limited resources.

Geopolitical Competition: The involvement or influence of regional actors, such as Egypt, and their active role in the conflict have complicated peace negotiations.

Despite the gravity of the crisis, international engagement has remained limited, and peace initiatives have repeatedly failed
to produce sustainable outcomes.

Efforts Toward Resolution

Several attempts at ceasefire and negotiation have been initiated by international and regional organizations, including:

• The African Union and IGAD , which have convened peace talks.
• The Jeddah Negotiation Forum, led by the United States of America and Saudi Arabia, which continues to advocate for humanitarian corridors and civilian protection.
• Grassroots civil society groups play a critical role in local-level mediation and support.

However, although the RSF has always responded positively towards peace negotiation efforts and shown a strong interest in ending the war, the entrenched positions of SAF, as well as their political and financial backing and territorial control, have rejected peace opportunities and hindered progress.

Sudan’s war has escalated into a catastrophic convergence of armed conflict and economic collapse. Without robust and coordinated international engagement, the country faces the prospect of becoming a failed state, with crucial implications for regional stability and
global humanitarian efforts. 

References

1. African Development Bank. (2024). Sudan Economic Outlook.

2. Amnesty International. (2024). Human Rights Violations in Sudan.

3. International Crisis Group. (2023). Sudan’s Unfolding Crisis.

4. Médecins Sans Frontières (MSF). (2024). Medical Emergency in Sudan.

5. UNHCR. (2024). Sudan Regional Refugee Response Plan.

6. WHO (2025). Sudan: US funding freeze puts healthcare system in difficulty

7. World Bank. (2024). Economic Monitoring Brief: Sudan.

8. WFP. (2024). Food Security Outlook for Sudan. 

9. Horn of Africa Initiative. (2024). Geopolitical Dynamics in Sudan’s Conflict.