In Sudan, a deep economic crisis in the 1990s initially facilitated the consolidation of an Islamist-commercial elite that forged an alliance with a segment of the military and capture the state. Having gained control of the state, the Islamists marginalized rival groups in civil society, while continuing to recruit more jihadist elements among poorer segments of the population. In addition to their control over the economy, Sudanese Islamists also consolidated their rule by taking over the civil service in a systematic fashion. However, with the steep decline in labor remittances as a result of a regional recession, and the loss of access to revenues from oil resulting from the secession of South Sudan, the Islamist authoritarian regime lost the financial basis that underpinned its patronage networks. This chapter explains how the latter gradually resulted in popular protests and the demise of the Islamist authoritarian regime in Sudan.

In Sudan the era of the oil boom resulted in a flood in labor remittances that circumvented official financial institutions, thereby undercutting the state’s fiscal and regulatory capacity and fueling the expansion of the informal foreign currency trade. Initially, developments in Sudan paralleled those in Egypt as the boom witnessed the rise of an Islamist-commercial class that formed as a result of its successful monopolization of informal financial markets. However, in contrast to Egypt, by 1989 Sudanese Islamists were able to take over the levers of the state via a military-coup. This development was made possible by Sudan’s weaker state capacity and the extreme weakness of its formal banking system. As a result, the financial power of the Muslim Brotherhood continued to increase in relationship to the state as they continued to profit from participation in the lucrative speculation in black market transactions and advantageous access to import licenses.

In Egypt migrant remittances and the flow of petrodollars in the era of the oil boom provided capitalization of Islamic banks and a host of Islamic investment companies that operated outside the system of state regulation. Such bankers drew on the rapidly growing wealth of those businessmen with long-standing connections in the Gulf, including, most importantly, members and sympathizers with the Muslim Brotherhood (MB). This boom in labor export and remittance flows also helped shape Egyptian national economic functions, out-migration and the burgeoning informal economy afforded the Egyptian state enough “relative autonomy” to allow it to expand the private sector and begin to decentralize the country’s economic system. It enabled the Egyptian state to relax foreign exchange regulations to stimulate a foreign capital influx. However, the unintended consequences of these policies were opening the door for Islamic financial institutions, which helped finance and popularize the middle class-based Islamic movement.

In Sudan the era of the oil boom resulted in a flood in labor remittances that circumvented official financial institutions, thereby undercutting the state’s fiscal and regulatory capacity and fueling the expansion of the informal foreign currency trade. Initially, developments in Sudan paralleled those in Egypt as the boom witnessed the rise of an Islamist-commercial class that formed as a result of its successful monopolization of informal financial markets. However, in contrast to Egypt, by 1989 Sudanese Islamists were able to take over the levers of the state via a military-coup. This development was made possible by Sudan’s weaker state capacity and the extreme weakness of its formal banking system. As a result, the financial power of the Muslim Brotherhood continued to increase in relationship to the state as they continued to profit from participation in the lucrative speculation in black market transactions and advantageous access to import licenses.

In Sudan, a deep economic crisis in the 1990s initially facilitated the consolidation of an Islamist-commercial elite that forged an alliance with a segment of the military and capture the state. Having gained control of the state, the Islamists marginalized rival groups in civil society, while continuing to recruit more jihadist elements among poorer segments of the population. In addition to their control over the economy, Sudanese Islamists also consolidated their rule by taking over the civil service in a systematic fashion. However, with the steep decline in labor remittances as a result of a regional recession, and the loss of access to revenues from oil resulting from the secession of South Sudan, the Islamist authoritarian regime lost the financial basis that underpinned its patronage networks. This chapter explains how the latter gradually resulted in popular protests and the demise of the Islamist authoritarian regime in Sudan.

In Egypt migrant remittances and the flow of petrodollars in the era of the oil boom provided capitalization of Islamic banks and a host of Islamic investment companies that operated outside the system of state regulation. Such bankers drew on the rapidly growing wealth of those businessmen with long-standing connections in the Gulf, including, most importantly, members and sympathizers with the Muslim Brotherhood (MB). This boom in labor export and remittance flows also helped shape Egyptian national economic functions, out-migration and the burgeoning informal economy afforded the Egyptian state enough “relative autonomy” to allow it to expand the private sector and begin to decentralize the country’s economic system. It enabled the Egyptian state to relax foreign exchange regulations to stimulate a foreign capital influx. However, the unintended consequences of these policies were opening the door for Islamic financial institutions, which helped finance and popularize the middle class-based Islamic movement.