GCC MEMBERSHIP REMAINS BEYOND YEMEN'S GRASP

C O N F I D E N T I A L SANAA 002061


FOR NEA/ARP:AMACDONALD

E.O. 12958: DECL: 12/28/2018
TAGS: PREL PGOV YM
SUBJECT: GCC MEMBERSHIP REMAINS BEYOND YEMEN'S GRASP

Classified By: Charge d'Affaires Angie Bryan for reasons 1.4(b) and (d)



1. (C) SUMMARY. Yemen's full participation in the Gulf
Cooperation Council (GCC) is thwarted by its bleak economic
outlook, including a large, but unemployed, work force. GCC
members have pledged to help strengthen Yemen's development,
but a substantial amount of money has not been delivered.
END SUMMARY.

"JOINING IS NOT AN OPTION"
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2. (C) Despite the GCC passing a 2005 resolution to start the
process of Yemen's integration into the GCC by 2015, it is
unlikely that Yemen will soon become a member of the bloc.
Kuwait's Ambassador to Yemen, Salem Ghasab al-Zamanan, told
Poloff that the GCC was not designed to be "an open
participation bureaucratic tool" like the Arab League.
Yemen, according to al-Zamanan, is too different economically
from the six GCC countries, and, he said, "Yemen joining is
not an option." (Note: Kuwait, still bitter over President
Saleh's support for Saddam Hussein during the first Gulf War,
may have more than just economic objections to Yemen joining
the GCC. End note.)


3. (U) Even moderate advocates for Yemen's accession into the
organization concede that full participation for Yemen is not
an option. In a briefing to the Yemeni donor community,
Chair of the Arab Fund for Social and Economic Development
Abdlatif al-Hamad said, "The GCC would welcome Yemen, involve
them in some activities and help Yemen to develop." There
would be restrictions, he explained, since the entire
population of all of the countries in the GCC is only 22-30
million, basically equivalent to the population of Yemen.
Full GCC membership allows citizens to travel to other GCC
countries without a visa. Al-Hamad emphasized that "too
large a flow of Yemenis into the GCC countries would drown
them."


4. (C) Yemen's large population problem is compounded by its
high unemployment rate. Deputy Minister for Planning and
International Cooperation Dr. Mohamed al-Hawri told Poloff
that Yemen must increase its economic capabilities in order
to satisfy GCC enrollment conditions, and one way to do this
would be to increase the number of Yemeni workers into GCC
countries. However, several GCC members are resistant to
allowing additional Yemeni labor in their markets. Hilal Bin
Ali al-Shafari, Political Counselor at the Embassy of Oman,
told Poloff that Oman and Yemen have a very strong
relationship and that Omanis and Yemenis share a common
cultural background. However, when asked about increasing
Yemeni work opportunities in Oman, he appeared hesitant, and
explained that there are no plans, or political will, to
increase the number of Yemeni work permits.

CORRUPTION STALLS DEVELOPMENT ASSISTANCE
--------------


5. (C) Several GCC countries are reluctant to allocate
development assistance because of the endemic corruption in
Yemen, a problem that also plagues its attempts to join the
Council. The government of Oman has allocated the $100
million it pledged at the 2006 London Donor's Conference, but
the money remains in the Arab Kuwaiti Bank. Al-Sharafi said
that they are waiting for project proposals by the ROYG on
how they plan to spend the money. Expressing frustration, he
called the ROYG "very slow to respond" and, noted that more
than once, the ROYG has asked for the money by providing
duplicative proposals for previously completed projects.
Similarly, Kuwaiti Ambassador al-Zamanan told Poloff that the
Kuwaiti Parliament will not allocate the $200 million Kuwait
pledged because they are unhappy with the overall investment
climate in Yemen, including the level of corruption.

COMMENT
--------------


6. (C) In light of Yemen's current economic conditions,
there is very little incentive for the GCC to accept its
membership, despite its Arab brotherhood rhetoric.
Diplomatic pressure may be needed to shore up any chances of
Yemen's accession, or, at the least, to ensure that pledged
assistance from GCC members is allocated where it is
desperately needed. END COMMENT.


BRYAN