* Inefficiency, corruption seen as major
* Saleh is West's main partner in fight
on al Qaeda
By Ulf Laessing
SANAA, Jan 17 (Reuters) - Western and
Gulf Arab donors want to help Yemen escape the poverty on which al Qaeda
thrives, but new aid will not flow unless President Ali Abdullah Saleh
enacts reforms and tackles corruption, diplomats and analysts say.
U.S. and Saudi concern that al Qaeda
is gaining safe havens in the unstable Arab country to plan and launch
attacks elsewhere has soared since the group's Yemen-based wing said it
was behind a failed Dec. 25 attempt to blow up a U.S. airliner.
A British-hosted conference on Jan.
27 will discuss how the outside world can help Yemen counter radicalisation
and promote reform, but participants will be aware that the government
has yet to spend most of the $4.7 billion pledged by donors in 2006.
Transport Minister Khaled al-Wazir has
said $617 million of that total will be disbursed on transport projects
this year and blamed delays on long feasibility studies and tendering holdups.
But diplomats say inefficient bureaucracy
and a lack of transparency in tenders have helped clog the aid pipeline.
"This time we need a mechanism
(to ensure) that money goes into projects and economic reforms are being
undertaken to gradually lower dependence on foreign aid. It can't be business
as usual," said a Western diplomat in the capital Sanaa.
Yemen faces daunting challenges, including
a revolt by Zaid Shi'ite tribesmen in the north and separatist unrest in
the south. Government control is feeble in parts of the impoverished country
of 23 million. Roughly half the population is under 15 years of age.
Foreign Minister Abubakr al-Qirbi said
last week Yemen needs about $4 billion a year in aid to revive its economy
and improve living standards for a population set to double in 20 years.
Government revenue from Yemen's limited
oil exports fell 70 percent in the first 10 months of 2009, official figures
show, and new gas exports cannot fully offset the decline.
Saleh is the West's main partner in
fighting al Qaeda in Yemen, even though diplomats say his rule is tainted
by graft and under challenge from disaffected Yemenis.
"Look at this mosque. It cost $60
million or so," said Ali Yaqoub, 31, pointing at a giant mosque named
after the president which opened in 2008 and can accommodate 40,000 worshippers.
"I'm Muslim but I think the money
should have gone to poor families," said Ali, who juggles several
jobs to make ends meet.
Nightly power cuts plunge swathes of
Sanaa into darkness, but the mosque lights blaze on unaffected.
Saleh has denounced corruption in the
past, but for three decades he has also operated a patronage system to
balance power among tribes and factions in the military-security elite.
Pauline Baker, president of the Washington-based
Fund for Peace, acknowledged that Yemen's opaque system was a problem for
donors, but noted that the country had a government to work with, unlike
Somalia, where state failure was more apparent.
The fund, which researches failed states,
rates Yemen's leadership, judiciary and civil service as "poor".
Baker suggested that donors might conduct
inspections to verify that foreign aid had reached intended projects.
"Another option is to have these
projects not go through the government, but through the private sector
or NGOs (non-governmental organisations)," she said.
Yemen's government has worked out a
10-point reform plan to tackle issues such as public service reform, privatisation
and improving the rule of law in a country dominated by tribes.
"The most important thing is to
prioritise, to focus," said deputy finance minister Jalal Omar Yaqoub,
the author of the plan, who said some success, such as sorting out land
disputes in one area, would then "spill over" to the rest of
But diplomats and analysts are sceptical
that the government will tackle the toughest issues, such as diesel subsidies,
which it expects to cost $2 billion this year -- a huge budget burden.
The last attempt to reduce diesel subsidies
sparked protests in 2005. The subsidies also encourage irrigation of qat,
a mild drug that pervades life in Yemen, where water is running out.
Yaqoub said the government would shrink
the budget by using gas instead of diesel or fuel oil in its power plants.
Apart from aid, Yemen hopes Gulf oil
producers such as Saudi Arabia will accept Yemeni workers to help rescue
"We have the problem of poverty.
There are so many young men who can't find jobs. It would be good if Saudi
Arabia opened its labour market," said Ismail Saydi, head of the political
science faculty at Sanaa's Islamic Iman University.
Saudi Arabia, Kuwait and other Gulf
states expelled millions of Yemenis after Iraq's 1990 invasion of Kuwait,
when Saleh failed to join the U.S.-led coalition against Saddam Hussein.
Yet time is not on Yemen's side in its
"Every year the population is growing
by 700,000, while water reservoirs are rapidly depleting. Oil revenues
are falling. I am very pessimistic," said the diplomat.
(Editing by Alistair Lyon and Noah Barkin)
Reuters - Thomson Reuters Foundation
For more humanitarian news and analysis, please visit https://www.trust.org/alertnet