South Sudan cuts salaries to counter oil slump

JUBA, Sudan, Dec 11 (Reuters) - South Sudan's semi-autonomous government has ordered a 10 per cent cut in the salaries of senior officials to make up for a slump in revenues from its main export oil, a minister said on Thursday.

The region gets 99 per cent of its revenues from oil. The price of oil has dropped from highs of $147 a barrel earlier this year to about $45 because of the global financial slowdown.

The south's Information Minister Gabriel Changson Chang said the government would also cut back on travel and stop putting up officials in expensive hotels in the region's capital Juba. "We will cut back 10 per cent of salaries of leadership positions," Chang told Reuters, saying the decision would hit ministers and senior executives from Jan. 1.

South Sudan won a share in the country's oil earnings in a 2005 peace deal that ended more than two decades of civil war between north and south Sudan. Salaries eat up most of the south's health, education and security budgets, the minister said. Sudan's national budget for 2009 forecast oil revenues would fall 43.7 percent next year to 7.9 billion Sudanese pounds ($3.6 billion). Sudan says it produces 500,000 barrels per day of crude. The country's mining and energy minister last month said it would raise that figure to 600,000 bpd in 2009.