MCC VISITS SANAA: YEMEN ON THE THRESHOLD

UNCLAS SECTION 01 OF 02 SANAA 000009

SIPDIS

SENSITIVE

USAID FOR MCC AND ANE

E.O. 12958: N/A
TAGS: KMCA KCOR PGOV YM KMEPI ECON COM DEMOCRATIC REFORM HUMAN RIGHTS
SUBJECT: MCC VISITS SANAA: YEMEN ON THE THRESHOLD


1. (SBU) Summary. USAID Millennium Challenge Account
Secretariat Representatives Bryan Kurtz and Steve Feldstein

SIPDIS
and MCC Threshold Country Managing Director Kevin Saba
briefed senior level ROYG officials at the Ministries of
Planning, Justice, and Human Rights December 16-19 on
requirements for Yemen's MCA Threshold proposal. MCC
representatives made clear to ROYG MCC lead Ministry of
Planning and International Cooperation (MOPIC) that
significant funding is available, but the initiative for
reform must come from the ROYG. The delegation told their
interlocutors that to qualify for threshold funding it was
critical that Yemen's proposal addressed seriously the issues
of corruption and rule of law. (Note: ROYG officials report
taking this message on board, but the proof will be in the
proposal due to MCC January 31.) End Summary.

--------------
Yemen's Scores
--------------


2. (SBU) Background: While a threshold country, Yemen's
scores in the "Ruling Justly" category fall far below median
indicators in all categories except the corruption indicator.
This year's Transparency International Report, however,
dropped Yemen's scores on corruption to reflect what many
officials tell us privately is a more accurate score.
Yemen's score in the Rule of Law category also falls below
the 25 percent margin, reflecting serious shortcomings in the
execution of justice.

--------------
Planning in Charge of Threshold
--------------


3. (SBU) Deputy Prime Minister and Minister of Planning Ahmed
Sofan, head of the lead Ministry on MCC told the visiting
delegation that his Ministry plans to use the MCC process as
a springboard for wider reforms. MOPIC formed a technical
committee to handle threshold and MCC, drawing on broad
representation from the ministries and civil society. Jalal
Yaqoub, Assistant Deputy Minister, MOPIC, chairs the
committee. Yaqoub has shared his concerns with Emboffs that
the committee is unwieldy, comprising a range of concerns.
The technical committee reports to a ministerial committee
for implementation, making the process even more cumbersome.
During a meeting with MCC officials, a member of the
committee complained that the Threshold process does not give
them enough time to deal with the sweeping reforms called
for. Comment: On the other hand, the committee is creating
cross-ministerial buy-in to the MCC concept and tackling much
needed reform issues. End comment.


4. (SBU) MCC representatives told ROYG officials that to
qualify for threshold funding, MCC and USAID want to see
immediate action on some important steps, such as the
implementation of existing laws, as good-faith (and
cost-free) demonstration of ROYG commitment. There is $5-10
million in threshold funding Yemen may draw on to aid its
efforts to achieve MCC status, they explained. But the funds
will not be granted unless Yemen's proposal makes the grade.
(Note: The Mission must first sign off on threshold proposal
and staff have made very clear that Post will not forward to
Washington a proposal that does not seriously address
shortcomings in corruption and rule of law. End Note).


5. (SBU) In several discussions with Deputy Prime Minister
Ahmed Sofan, the MCC delegation stressed the centrality of
the corruption and rule of law indicators to Yemen's success.
Sofan agreed that these were crosscutting issues, and said
he understood that dealing with corruption was the key to
eliminating many of the obstacles to reform. Mindful of the
difficulties he will have in taking on such a deeply routed
issue as corruption in Yemen, Sofan broadened the MCC
discussions to include general poverty, the investment
climate, and the role of women in society. He welcomed what
he characterized as a renewed role of aid in U.S. foreign
policy, and explained that tradition and lack of education in
Yemen make reform difficult, but not impossible.


6. (SBU) One MOPIC official confided on the margins of the
meetings that the ROYG may start with smaller anti-corruption
measures. In their view, he said, going after high-level
abuse would create more problems than it would solve.
Instead, he believes MOPIC will pursue smaller measures in
its proposal, such as placing signs in ministries and
fostering more press freedom on the issue of corruption with
the aim of gaining popular support for a "culture of honesty".

--------------
Ministers of Justice and Human Rights
Explain Yemen's Constraints
--------------


7. (SBU) Minister of Justice Adnan Al-Jafri described his
five-year plan for judicial reform, including extensive
support for commercial courts, training for judges, and
faster trials. Claiming to have the full support of President
Saleh in his efforts, Jafri expressed commitment to make
needed judicial reforms. Minister of Human Rights Amat
al-Soswa emphasized the importance of MCC's "girls'
education" indicator as the basis for political participation
and the advancement of human rights in society. According to
Yaqoub, advancing women's roles in society will be a
significant part of Yemen's Threshold proposal.


8. (SBU) Comment. The visiting delegation clearly
communicated to the relevant ROYG officials what MCC expects
from Yemen's proposal for threshold funding, and were
impressed that MOPIC has chosen to utilize MCC as an vehicle
for reform, whether or not Yemen qualifies for MCC. All
parties agree that MCC indicators reflect the most important
challenges in Yemen, and that the countries future depends
ultimately on progress in these areas. Sofan, his
subordinates, and several interlocutors see MCC threshold as
a way to encourage the ROYG to make what they characterize as
long-over due reforms. MCC is providing the venue to discuss
these issues and address critical shortcomings in the areas
of governance and corruption. The content of Yemen's
Threshold funding proposal, due in January, will speak
volumes as to whether the ROYG can meet the pace and achieve
the focus necessary in the short run, and then it must
sustain this momentum in the long run. End comment.
KHOURY