TAIZ: THE FORGOTTEN CITY

UNCLAS SECTION 01 OF 02 SANAA 000573

SIPDIS

ABU DHABI PLEASE PASS TO FOREIGN COMMERCIAL OFFICE
RIYADH PLEASE PASS TO FOREIGN COMMERCIAL OFFICE

E.O. 12958: N/A
TAGS: PGOV PREL ECON YM ECON COM
SUBJECT: TAIZ: THE FORGOTTEN CITY


1. This is an Action Request for Riyadh Foreign Commercial
Office. Please see Para 4.


2. Summary: In a two day trip to the Taiz Governorate March
3-4, CDA explored opportunities to expand the mission's
relationship with Yemen's third largest city. Deputy
Governor AbdulMalik al-Hiagem sought vocational and technical
training for education. Business leaders echoed water
complaints, while Civil Society representatives sought to
expand USG interaction with their organizations. Local
council representatives expressed frustration with increasing
poverty and neglect from central authorities and western
embassies. Taiz has the potential for tourism and commercial
ventures, but business executives and government officials
have to work harder to fully explore that potential.
Possibilities should be explored for U.S.-Yemeni private
sector partnerships. End Summary.

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Deputy Governor Hopeful for USG Water Grant
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3. Deputy Governor Mohammed AbdulMalik al-Hiagem told CDA
the Taiz governorate has a population of over 2 million and
over 1,000 schools. Noting that the Governor, who was called
to Sanaa at the last minute, was pleased with U.S.
cooperation on a water study, Hiagem underscored extreme
water problems in Taiz. Economically, Taiz depends on
industry, agriculture, and fishing for revenue, although
according to Hiagem they are now focusing on ways to expand
tourism. Despite the diverse economy, Taiz is still a poor
governorate and the Deputy Governor asked for technical
assistance to expand vocational education opportunities.
Hiagem closed the meeting by noting that the first USAID
project in Taiz began during the Kennedy Administration, and
hoped that cooperation would resume.

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Business Community Dominated
by Hayel Saeed Conglomerate
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4. Showki Hayel Saeed, a local council member, member of the
Chamber of Commerce, and unofficial spokesman for the Hayel
Saeed Group (HSG),said business is going well but
opportunities existed for more American investment. CDA
raised the possibility of a catalogue show at the Chamber of
Commerce to help local businessmen explore potential
partnerships with U.S. firms. The Chamber President, who
said the Chamber is looking to invest in tourism promotion
welcomed the suggestion of a catalogue show and promised to
follow up with Post on implementing the idea. Water issues
predominate even in business life and officials noted the
necessity to secure private sources of water and truck it in
to maintain business operations. Saeed also noted plans to
make Taiz the cultural capital of Yemen. Post requests
assistance from the Riyadh Foreign Commercial Office in
arranging a catalogue show. End Action Request.

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Civil Society Active, But Seeking More Recognition
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5. CDA hosted a reception with 40 civil society
representatives from the Taiz area. Azz al-Deed Saed
al-Asbahi, General Director of the Human Rights Information
Center, requested more visits from emboffs and noted that the
Taiz civil society has remained strong since the 1960s when
Taiz was the capital of the South. Souad Ata al-Gedsi of the
Women's Forum Research and Training Center called Taiz the
"forgotten" city, and noted that since 1991 poverty has
increased rapidly while the middle class has shrunk. The
majority of the 1.2 million Yemeni guest workers deported
from Gulf countries during the 1991 Gulf War were from the
Taiz area. Since their return, she said, the area has never
been the same. Executive Director of the Alaweal Company for
Microfinance which is under the auspices of the United
Nations Development Program, Anisa al-Bahar, told CDA that
her organization has provided over 100,000 loans and boasts a
96.7 percent repayment rate. Loans to women, she said, range
between 6,000 and 15,000 Riyals (32-80 USD). Bahar said much
more needs to be done, however, especially in expanding the
program to reach women in rural areas.

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Local Councils
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6. CDA visited the Makbana local council, approximately 60
km southwest of Taiz. The rural district has roughly 100,000
people with each of the 23 members representing 3,500 - 5,000
residents. Representatives complained of little control over
resources, leaving them unable to manage but a few public
services such as maintaining schools and roads. Money for
new projects, however, must be obligated by central
authorities. One representative noted that the council only
received 1.5 million Riyals for yearly projects (roughly
8,000 USD). Several council members expressed the need for
additional resources to carry out their newly drafted
five-year plan for the area.

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Taiz University President
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7. During a visit with Taiz University President, Dr.
Abdullah Mohammed al-Sofi, CDA and Dr. al-Sofi discussed
undertakings and achievements of the university. Dr. al-Sofi
told CDA his university has about thirty thousand students,
one-third of whom are women. In 2005, the university will
graduate its first class of medical students. Shortcomings,
however, include the lack of a placement office for
graduates. The university has developed relationships with
local businesses for some placements, but public and private
partnerships could be greater. CDA noted his satisfaction
with the university's achievements and noted his desire to
increase visits to the institution by emboffs to hold
academic forums, to discuss current issues of common interest
to the US and Yemen and to encourage linkages between the
university and universities in the US.

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Comment
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8. Nestled in the mountains, the former capital is mostly
defined by the presence of the Hayel Saeed Corporation and
its severe water shortages. Without the large business, Taiz
would grow poorer, and the middle class even thinner than it
is currently. Taiz has the potential to be a mountain resort
and a magnet for tourism. Investment, both domestic and
foreign, holds the key. Post will explore catalogue shows and
marketing seminars with the local chamber of commerce to help
push thinking in this direction. End comment.
Krajeski