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