YEMEN BUDGET TRANSPARENCY FOR SECTION 7088(C)

UNCLAS SANAA 000550 SENSITIVE SIPDIS DEPT FOR EEB/IFD/OMA JULIA JACOBY DEPT FOR NEA/ARP ANDREW MACDONALD E.O. 12958: N/A TAGS: EAID ECON PREL EFIN YM SUBJECT: YEMEN BUDGET TRANSPARENCY FOR SECTION 7088(C) COMPLIANCE REF: STATE 28885 ¶1. (U) The ROYG is currently receiving U.S. bilateral assistance using FY 09 funds, including development, counterterrorism, and military assistance. The non-military portion of the annual expenditures of the central government is publicly available on the Ministry of Finance's website (www.mof.gov.ye/arabic/budget2009.php) and in print through the Ministry of Finance and the Central Bank of Yemen (CBY). Government revenues are detailed in the CBY's annual report and are divided into oil and gas revenues and non-oil revenues. ¶2. (SBU) It is difficult to assess the accuracy of ROYG reports on government revenues and expenditures, due to a lack of independent analytical organizations and the absence of any freedom of information laws. The lack of record-keeping among many Yemeni businessowners, coupled with widespread corruption in the oil sector and the Tax and Customs Authorities, makes accurate budget information hard to come by for the government itself. World Bank representatives in Yemen tell us that different ROYG ministries and organizations publish widely varying budget figures and there is no information on how data, especially revenue figures, is derived. COMMENT -------------- ¶3. (SBU) Post believes that Yemen is in compliance with Section 7088(c) of the Department of State Foreign Operations and Related Programs Appropriations Act (SFOAA) FOAA, but would benefit greatly from capacity-building assistance targeting the Central Statistical Organization (CSO),the Tax Authority, and the Ministry of Finance. Training ROYG accountants, statisticians, and economists in best practices would go a long way in improving survey methods, budget analysis, and transparency. End Comment. SECHE