Identifier
Created
Classification
Origin
05SANAA461
2005-03-04 13:02:00
CONFIDENTIAL
Embassy Sanaa
Cable title:  

U/S DOBRIANSKY'S MEETING WITH MINISTER OF PLANNING

Tags:  PREL PGOV PHUM KMPI KDEM EAID ECON EFIN YM COM 
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041302Z Mar 05
C O N F I D E N T I A L SECTION 01 OF 02 SANAA 000461 

SIPDIS

PLEASE PASS TO MCC, G/NICOLE BIBBINS SEDACA

E.O. 12958: DECL: 03/04/2015
TAGS: PREL PGOV PHUM KMPI KDEM EAID ECON EFIN YM ECON COM
SUBJECT: U/S DOBRIANSKY'S MEETING WITH MINISTER OF PLANNING
AND INTERNATIONAL COOPERATION SOFAN


Classified By: DCM Nabeel Khoury for reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 SANAA 000461

SIPDIS

PLEASE PASS TO MCC, G/NICOLE BIBBINS SEDACA

E.O. 12958: DECL: 03/04/2015
TAGS: PREL PGOV PHUM KMPI KDEM EAID ECON EFIN YM ECON COM
SUBJECT: U/S DOBRIANSKY'S MEETING WITH MINISTER OF PLANNING
AND INTERNATIONAL COOPERATION SOFAN


Classified By: DCM Nabeel Khoury for reasons 1.4 (b) and (d).


1. (C) Summary. On February 24, Under Secretary for Global
Affairs Paula Dobriansky urged Deputy Prime Minister and
Minister for Planning and International Cooperation Ahmed
Sofan to use the MCC threshold process to Yemen's full
advantage and implement serious anti-corruption measures.
Sofan replied that Yemen faces serious developmental
constraints and suffers from an unjustified reputation as a
result of its support for Iraq in the 1991 Gulf War. U/S
impressed upon Sofan that in order to achieve the jump for
threshold to MCC status, the ROYG must muster the political
will to address Yemen's pervasive corruption problems. End
summary.

--------------
MCC -- Do Not Waste the Threshold Years
--------------


2. (C) Under Secretary for Global Affairs Paula Dobriansky
met with Deputy Prime Minister and Minister for Planning and
International Cooperation (MOPIC) Ahmed Sofan on
February 24. Calling the MCC process a tremendous
opportunity for Yemen to move forward on much needed economic
and democratic reforms, she congratulated Sofan on his
Ministry's successful submission of Yemen's MCC threshold
proposal. U/S emphasized that the time is now to institute
pressing reforms -- particularly on corruption.


3. (C) Using his standard retort, Sofan said that Yemen has
paid a price for its democratic stance and blamed Yemen's
poor economy on the refusal of its (less democratic) Gulf
neighbors to invest in Yemen. "They think we are trying to
expose them,"
complained Sofan, "and so they penalized us for our
democratic values." Not stopping with what he considers the

external impediment to reforms, Sofan also pointed a finger
at opposition political party Islah. "Internally we have a
lot of opposition to our economic reform program. Fighting
corruption is a critical part of our action plan,
but the opposition is blocking us in Parliament." Touting a
MOPIC effort to require ROYG officials to publicly disclose
their assets, Sofan claimed Parliament and the Islah party
were standing it its way. (Comment: Islah's small minority
could not solely be responsible for the bill's non-passage.
A lukewarm GPC party endorsement allowing members to act on
behalf of their own interests is likely the real culprit.
End comment).


4. (C) "We are encouraged by the MCC process," Sofan told
U/S, but Yemen needs "more money" to maintain the reform
momentum. Development assistance would go much farther,
suggested U/S, if the ROYG implemented anti-corruption
measures. Development is a partnership, explained U/S, but
Yemen needs to move forward on much needed economic and
democratic reforms. She closed the subject by saying, "It is
in your hands."

--------------
Improving the Investment Climate
--------------


5. (C) Turning to the Trade Investment Framework Agreement
(TIFA) process, Sofan described his meetings last fall with
USTR in Washington as a good first step to WTO succession.
Suggesting that Yemen's slow accession at the WTO was due to
member country opposition, Sofan asked for increased
political support from the U.S. to help the ROYG defeat
these naysayers. "What we really want," exclaimed Sofan, "is
a Free Trade Agreement." (Comment: The only thing hindering
WTO accession is Yemen's lack of trade expertise, slow
movement on legal reforms and poor investment climate. End
comment). Sofan requested that U/S explore a "fast track"
FTA for Yemen. U/S said she would take this message back to
Washington.


6. (C) Due to Yemen's opposition to the 1991 Gulf War, Sofan
theorized Yemen was "labeled" and given a bad reputation for
investment. His solution, "we need guaranteed credits from
the EXIM bank and to work with the Oversees Private
Investment Cooperation. U/S replied that President Saleh's
trip to Sea Island and the ROYG's participation with the G-8
in the BMENA Dialogue for Democracy has improved Yemen's
global standing.


7. (C) Comment: Sofan's position that Yemen's problems are
others' fault (and responsibility) is beginning to wear thin.
Washington visitors and mission representatives continue to
raise outstanding concerns on corruption and the investment
climate, but rarely does Sofan accept any responsibility on
behalf of the ROYG. The real test of whether our message is
getting through to Sofan will be Yemen's implementation of
its threshold proposal for the Millennium Challenge Account.
End comment.
Khoury