Few other countries have been through the birth pains that have been epitomized by Southern Sudan. The scars of civilian conflict and bitter internecine fighting will take a generation or more to heal, yet the results of the January 9, 2011 referendum are reflective not only of an abrogated and militarized history, but also of the determination of the peoples of Southern Sudan for the first time to be in the driving seat of their own destiny. However, the experience of other countries treading a similar path towards independence reveals that the road from war to peace and from dependence to full sovereignty is often as big a challenge as the struggle itself. This short briefing paper seeks to identify, based on international experience, the major challenges and state building priorities likely to be faced by the Government of Southern Sudan. The paper outlines core state-building priorities across the triple-transition (political, security and socio-economic) using political economy as the lens of analysis. Core challenges include securing the integrity of the new state, boundary demarcation, and a plethora of issues resulting from the division of one state into two, such as revenue sharing arrangements, national debt (USD36 billion owed to international creditors) nationality and immigration issues in both the north and south, signature to international treaties including on the Nile, simmering land conflict in the south and overly high expectations bound to be dashed given low delivery capacities. The birth of Southern Sudan comes with a clause; the umbilical cord is still attached!