SALEH FEELS PRESSURE TO REFORM, RESPONDS WITH

C O N F I D E N T I A L SECTION 01 OF 02 SANAA 000537 SIPDIS SIPDIS E.O. 12958: DECL: 03/01/2016 TAGS: PREL PGOV KMCA KMPI YM SUBJECT: SALEH FEELS PRESSURE TO REFORM, RESPONDS WITH DRAMATIC GESTURES REF: A. SANAA 342 ¶B. SANAA 146 ¶C. SANAA 522 SANAA 00000537 001.2 OF 002 Classified By: Ambassador Thomas C. Krajeski for reasons 1.4 (b) and (d ). ¶1. (C) SUMMARY: Yemen's recent cabinet reshuffle was brought about by, among other factors, coordinated pressure for reform by donor countries. On February 8, Post met with President Saleh, together with the Germans, British, and Dutch. The delegation pressed Saleh for specific actions to fight corruption, improve public tenders and protect press freedom, among other reforms. Saleh reacted angrily to donor involvement in Yemeni affairs, but agreed to consider suggested reforms. Two days later, Saleh announced the cabinet shuffle and instructed new members to implement a reform agenda. Time will tell if the reforms have legs, but early indications are positive. END SUMMARY. -------------- Donors Join Together to Push for Reforms -------------- ¶2. (C) Political insiders had been predicting a cabinet reshuffle in Yemen for over a year, but when the President decided on February 11 to replace 15 ministers, it came as something of a surprise. (Ref A) There were undoubtedly a number of factors that led to the decision, including upcoming elections and the recent prison escape of 23 convicts. By most accounts, however, one of the primary factors in the President's decision was the need to respond to the concerns of donor countries on reform measures. ¶3. (C) On February 8, three days before the change of government, Ambassador and DCM joined chiefs of mission from the United Kingdom, the Netherlands, and Germany, in a meeting with President Saleh. The ambassadors raised with Saleh the need for specific actions in fighting corruption, to include inviting international observers for international tenders. They also pressed Saleh to prosecute acts of aggression against the press and to lay the ground for free and fair elections. The British ambassador presented the points as recommendations, designed to help the ROYG improve its performance with the Millennium Challenge Corporation and the World Bank. The reform suggestions were drawn from an open dialogue process between donors and the ROYG. (Ref B) -------------- Saleh: "I'm Easily Agitated" -------------- ¶4. (C) In what appeared to be a well-rehearsed performance, Saleh accused the British Ambassador of intervening in Yemen's internal affairs and stormed out of the meeting, muttering loudly about "British colonialist attitudes." When the four ambassadors prepared to leave, however, he invited them back one by one to clarify his position. Saleh said: "I'm a Bedouin, and am easily agitated. I get angry when people dictate to me." DCM discussed the issue of international observers at the High Tender Board in more detail, explaining that the donors had no intention of infringing on Yemen's sovereignty but only wanted to help improve Yemen's credibility internationally. DCM compared such measures to Palestinian elections, in which the United States didn't like the outcome, but could not question the legitimacy of the process. Saleh appeared willing to consider such a prospect, and promised to have his advisors look at the donor proposals. -------------- Harsh Rhetoric but Promising Changes -------------- ¶5. (C) Following the meeting, Saleh made a number of statements to the press rejecting any conditionality to foreign aid. Nevertheless, in his first speech to the Cabinet, the President placed tendering reform at the top of his list of priorities. He also agreed to remove himself as the head of the Supreme Judicial Council, one of the primary objectives of Yemen's Millennium Challenge Threshold Plan. By replacing Deputy Prime Ministers Ahmad Sofan and Alawi al-Salami, Saleh also removed the two officials most associated with public tendering and budgeting controversies. ¶6. (C) In a February 27 meeting with Econoff, ROYG officials shared a number of other positive signs of progress. Deputy Minister of Finance Dr. Mohammed al-Mansoob said the new Finance Minister had given him control of key budget reforms, formerly the domain of Salami's son-in-law. He also said the SANAA 00000537 002.2 OF 002 minister was already firing some of the most notoriously corrupt officials in MOF. The well-respected Minister of Local Administration, Sadeq Abu Ras, was charged to head up a committee to finalize critical procurement reforms. The Ministry of Planning, together with the Ministry of Oil, are taking steps to join the Extractive Industries Transparency Initiative. (Ref C) Mohammad Al-Sabry, Chief Economist at the President's Office, said that all of these moves are a direct response to donor pressures. The best thing the donors can do a this stage, continued Sabry, is to continue pushing for specific reform measures over the next six months leading up to elections. -------------- Is Yemen a Partner for Reform? -------------- ¶7. (C) COMMENT: New faces in the Cabinet do not by themselves constitute progress on reforms. Many ROYG officials caution that the new government could prove to be little more than a caretaker government before the next elections. In addition, one important holdover from the previous cabinet is PM Bajammal, the godfather of some of the most corrupt deals to date. Nevertheless, the initial indications are that the President is responding to outside pressure and has charged his Cabinet with implementing long-delayed changes. Despite Saleh's demonstrative rhetoric against foreign intervention, he appears to recognize the imperative of advancing reforms in order to qualify for support from the World Bank, MCC, and others. Changes in key ministries have altered the political landscape, and the coming months will offer a litmus test for whether Yemen is a true partner for reform. END COMMENT. Krajeski