The cornerstone of Bashir's domestic policy has been the imposition of Islamic law and institutions through severe political repression involving widespread human rights abuses. All real political opposition has been driven under-ground or into exile. Shariah was reinstated as the Criminal Act of 1991, instituting harsh punishments nationwide, including amputations and stoning. The southern states are "officially" exempt from these Islamic prohibitions and penalties. In 1993, however, the government transferred all non-Muslim judges from the south to the north, replacing them with Muslim judges. The introduction of Public Order Police to enforce shariah law resulted in the arrest and treatment under shariah law of southerners and other non-Muslims living in the north.
Periodic ceasefires and negotiations have failed to end the civil war that has ravaged the country since the early 1980s, killing two million people, internally displacing over four million, and exacerbating famine conditions in the south. In 1997, the government signed a series of agreements with rebel factions under the banner of "Peace from Within," calling for a degree of autonomy for the south and the right of self-determination. Government and rebel negotiators continued to meet in 1999, reaching agreement on transit routes for humanitarian relief.
In July 2002, another round of peace negotiations between the government and John Garang's SPLA rebels in the south in the Kenyan town of Mashakos resulted in the "Mashakos Agreement." The agreement hinged on the initial acceptance of a unified state; however, after a six-year period, a referendum for the self-determination for the people of southern Sudan would be held, to see if they would wish to remain a part of a united Sudan, or to form a separate state. In September, talks broke down as Garang's forces seized the town of Tourit. Severe fighting continued in January 2003. In April, however, Bashir and Garang met to express their desire to reach a final peace agreement by the end of June 2003. The two sides subsequently returned to the negotiating table at Mashakos, and decided to focus on some of the major issues between them, including the location of the nation's capital; the office of the president; the authority of executive and legislative bodies; distribution of oil revenues; and issues relating to the financial system, central bank, and currency.
Although the war has occupied most of Bashir's energies, his country's pressing economic problems have forced him to implement harsh programs aimed at cutting government expenses and boosting Western lenders' confidence in his regime. In spite of the government's privatization program and efforts at stimulating foreign investment, Sudan's economy is still weakened by massive foreign debt and heavy military expenditures. Sudan's primary resources are agricultural, but extensive petroleum exploration began in the mid-1970s, and some believe that petroleum might solve many of Sudan's problems. Significant finds were made in the Upper Nile region and commercial quantities of oil began to be exported in October 2000, reducing Sudan's outflow of foreign exchange for imported petroleum products. There are indications of significant potential reserves of oil and natural gas in southern Sudan, the Kordofan region and the Red Sea province. The Sudan, however, will still require significant assistance and debt relief to manage a foreign debt that was estimated at US $24.9 billion in 2000.
In April 2002, the ruling National Congress Party announced it would pursue an amendment to the Constitution to allow the president to serve more than two terms.