Monday, March 7, 2011

Yemen's Road to Economic Turmoil

By Jumana Al Tamimi

Economic and political reforms need to go hand in hand to address the country's poverty and joblessness

Sana'a- Mar 7, 2011- Economic growth is weak. Inflation is high. The employment scenario is grave, with the jobless rate on the rise. There are no projects that could possibly provide a start to tens of thousands of jobless people. The budget deficit is big, too.

All these issues have become catalysts for massive demonstrations against government policies in many of Yemen's major cities, protests that have since acquired strong political overtones, with demands for a change in the regime gaining currency.

Yemen, the Arabian peninsula's poorest country, has a per capita income of $2,600 (Dh9,548) and per capita GDP growth was a mere 0.9 per cent between 2004 and 2008, according to the 2010 Legatum Prosperity Index. A World Gallup Poll in 2009 reported that a high proportion of people could not afford food and shelter for their families — only 53 per cent were happy with their standard of living.

Not surprisingly, the country has been witnessing protests against deteriorating economic conditions over the last few years. While the number of people taking part in mass protests in Yemen is significantly lower than in Tunisia and Egypt because of its relatively tiny middle class, mass protests in all the Arab countries share one aspect in common. And that, according to Abdul Gani Al Iryani, a Yemeni development consultant with various institutions including the World Bank, is: "It reinstates the people's confidence in themselves and in their ability to change."

Hopelessness triggered it all, says a former government official.

"The economic situation is at the heart of the [current] crisis [in Yemen]," said Saif Al Assali, Yemen's former finance minister, in an interview with Gulf News. "People have lost hope in any improvement in their standards of living and their future. [But] the general political atmosphere in the region has helped the Yemenis to go to the streets in such a way and call for a change," he added in reference to the protests around the region

Al Iryani believes economic reforms have remained a cover for the regime's self-interest all these years. "It became an inevitable necessity for the regime to stay in power," he told Gulf News in an interview.

Political hurdles

However, he reckons, the reasons for not introducing the necessary economic measures were political and underline the need for political reforms.

Saif Al Assali complained that "fleets of corruption established in government and other influential centres" fought him when he tried to introduce reforms.

Regional political developments over the past decades further complicated the already-weak Yemeni economy.

The 1990-1991 Gulf war was one which led to the return of nearly one million Yemeni workers from the Gulf countries, mainly Saudi Arabia, and that meant a huge loss in terms of their remittances. The other factor was Yemen's civil war of 1994 that drained the economy. In 1997, the Yemeni government was forced to go to the International Monetary Fund (IMF), with which it reached an agreement to increase Yemen's credit and put it on the path of economic reforms.

Under the agreement, the government introduced a slew of unpopular measures such as a reduction in civil service payrolls, elimination of diesel and other subsidies and the introduction of a general sales tax.

Short-lived aid schemes

However, because of the limited progress in implementing economic reforms and Yemen's "failure" to comply sufficiently with the terms imposed by the IMF, the fund suspended its funding of the reforms.

The World Bank extended a four-year $2.3 billion economic support package to Yemen in 2002 but this aid initiative met the same fate as the IMF project. As a consequence of Yemen's failure to implement significant reforms, the World Bank announced it would reduce financial aid by one-third over the period starting from July 2005 to July 2008. In late 2006, a meeting of Yemen's development partners pledged $4.7 billion in grants and concessional loans from 2007 to 2010.

Today, the country still faces considerable pressure to implement economic reforms or face the consequences of losing international financial support. And with the recent protests, calls to introduce political reforms have intensified.

Several important economic indicators, provided by experts and economists, betray a bleak scenario for the country. According to official figures, unemployment in the country of 23 million hovers around 35 per cent. Unofficially, it is much higher. Nearly half of Yemen's children suffer from malnutrition, close to 40 per cent of the population exists under the absolute poverty line, the budget deficit is around 11 per cent, inflation has reached 20 per cent and is likely to rise further, the country's reserves are diminishing, and the local currency suffers from instability.

"What is more dangerous is that there are no plans on the ground, neither ideas nor projects that show a movement in the right direction," Al Assali said. "Even if we think now of introducing economic reforms, they need one or two years to bear fruit, assuming there is sincerity in our work."

So far, separate offers pitched by the government and the protesters to defuse the tension on the streets have not been accepted by the other side. These proposals include the framing of a new constitution and forming a new government. With politics taking precedence over economics amid the ongoing turmoil, an economic package did not even merit consideration.

But even if there was a plan aimed at alleviating the suffering of the people, economists differ in their expectations and outlook.

Having observed it closely over the past few years, Al Assali has no hope for the current government. "It can't keep its promises and can't do anything because it has used all its chances. It can't be sincere in its promises. If it was able to do something, it would have done so in the past five years," Al Assali said. Improving living conditions requires "changing faces, because soiled hands won't work".

To add to the government's insincerity, corruption is a major factor in the crisis whether one looks at it economically or politically, Al Iryani said. Any economic offer now "will be too little too late," he said.

Politics is being looked upon as the agent of economic change. Now, what is required is "devolution of power in a meaningful way and creating constitutional safeguards that would prevent the concentration of power at the centre", Al Iryani said, adding that not all the protesters would be ready to accept such an exit given the belief that there is no substitute for a regime change.

The theme of protests in many Arab countries, including Tunisia and Egypt, was regime change. However protests in Yemen differ from demonstrations in other countries, including Algeria and Libya. "In Yemen, the middle class is very small, that is if it exists," according to Al Iryani. "It is a matter of degree, not a matter of quality."

The prominent Yemeni economist added that poverty is a result of the government's policies, which were designed to help the regime to keep its grip on the people. But the same policies led to economic stagnation and "lack of direct foreign investments", he said.

Foreign investment is the way out, Al Iryani believes. It would "lead to the emerging of a middle class that is independent economically and financially from the state, and this constitutes a threat to the total control", he said.

Even if the current regime survives the ongoing unrest, it cannot continue ruling with its erstwhile attitude, according to Al Iryani. A comprehensive package of political, social and economic reforms is needed, he says.

"Now, there is a need to distribute power in a meaningful way and create a constitutional safeguard that would prevent the concentration of power at the centre," he said.

Source: Gulf News

Yemen's president plays the trusted al-Qaida card

By Jeb Boone

President Salih has blamed unrest on Islamic terrorists. There's no evidence, but it looks like the west has taken the bait

Sana'a- Mar 7, 2011- During the last few days, Britain, the US and other western countries have warned against travel to Yemen and urged citizens who are already there to consider leaving. This situation is being blamed on civil unrest and a high threat of terrorist attacks.

After more than a month of street protests calling for President Ali Abdullah Salih to resign, last week the opposition coalition known as the Joint Meeting Parties (JMP) put forward a five-point plan requiring him to step down at the end of this year.

Salih rejected that and, with his back to the wall, played the tried and trusted al-Qaida card. He claimed that terrorists were taking advantage of the political unrest to carry out further attacks against the Yemeni government and foreign interests in the country.

Hours after clashes broke out between pro-government and anti-government protesters in Ibb city, south of the capital, the authorities swiftly issued a statement claiming that the military was engaging al-Qaida militants in Marib.

Much to Salih's chagrin, local sources indicate that the alleged al-Qaida militants were most likely just rowdy locals. According to Gregory Johnsen, Yemen expert and author of the Waq al-Waq blog: "At this point there is no evidence in the public sphere to suggest that AQAP [al-Qaida in the Arabian Peninsula] has decided which road it should go down."

What's more, as Yemen's Islamist opposition party, Islah, has joined the protest, Salih is screaming "caliphate" to the Americans. As is the case with the Muslim Brotherhood in Egypt, the Islah party is pluralistic and not as dangerous as the soon-to-be-deposed leader would make it out to be.

The Islah party is split into four wings and, unfortunately, one of those wings is made up of Salafis, a fundamentalist brand of Sunni Islam. The Salafist wing's leader, Abdul Majid al-Zindani, gave a speech at the Sana'a University sit-in where he expressed his desire to establish an Islamic caliphate in Yemen after Salih's departure. However, judging by the horrified looks on the faces of protesters after his statement, there is little chance that a washed-up, elderly religious fanatic is going to have much say in a new government.

The question remains, though: is the west taking Salih's bait?

In a shocking display of inanity, Hilary Clinton claimed last Thursday that Iran was "very much involved" in Yemen's protest movement. Taking a card right out of Salih's playbook, the US has made Iran the scapegoat in Yemen yet again. After Salih blamed a US-Israeli conspiracy for unrest, Clinton's statement sounds just as ridiculous.

In a meeting with British nationals last week, Jonathan Wilks, the UK ambassador, said an increased AQAP threat is part of the reason why the foreign office has asked Britons to leave. The US state department has also cited a rising al-Qaida threat.

Considering that the British diplomatic and security presence in Yemen is only marginally active, one has to wonder where they are getting their information about AQAP activity from. Taking into account that a British diplomatic convoy was attacked last October, it's safe to say that their intelligence isn't the greatest.

Similarly, a truckload (literally) of CIA officers was attacked last December while waiting for a takeaway pizza outside a restaurant in the capital's affluent Hadda district. Of course, no one without security clearance can know for sure what the US intelligence-gathering capabilities are in Yemen, but if CIA officers can't order a pizza without getting a grenade thrown under their car, it's difficult to put much confidence in it.

In the meantime, the opposition JMP has a real opportunity to make a bid for power. When members of Yemen's ruling party say their country is not like Egypt and Tunisia, they are mostly just trying to convince people there won't be a revolution. However, one significant difference is the marginal political freedom that is tolerated under the Salih regime. The political opposition is (somewhat) organised and coordinating with demonstrators.

JMP leaders such as prominent tribal sheikh Hamid al-Ahmar are doing everything in their power to bring demonstrators all over Yemen under the JMP umbrella. According to al-Ahmar, the only way to preserve unity is to make their party's candidate for president someone from the country's south, where secessionist sentiments are strong. In an interview, al-Ahmar said that he would personally vote for Yaseen Saeed No'man, secretary-general of the Yemeni Socialist party and a native southerner.

With that sort of adept political sense, the JMP may just steal the show without ever having to sleep in a protest tent in front of Sana'a University.

Source: The Guardian

Military Forces Withdraw from Al-Habeleen

By Fatik Al-Rodaini

Lahj- Mar 7, 2011- Informed sources said that Yemen's military forces withdrew from Al-Habeleen district, Lahj after a meditation from senior Sheikhs to move the army headquarters from the area.

The sources confirmed that at least 70 soldiers with their military equipments have been seen moving to Al-Anad district.

Habilain district has been witnessed sporadic clashes between Yemen's forces and separatist movement, Harak.

In the last few weeks, military reinforcements were deployed to some areas in Lahj to control the situation as the separatist movement, Harak, is escalating protest and violence.

Heavy Fire Heard inside Central Prison in Sana'a

Sana'a- Mar 7, 2011- Heavy fire was heard on Monday inside the central prison in Sana'a, with informed sources saying prisoners were fighting the prison guards but had no information weather there were casualties.

Also, media outlets cited eyewitnesses as saying that violence erupted between inmates inside the jail and the police used live ammunition to scatter the rioting prisoners.

However, the websites said they had tried to contact officials at the jail by telephone but there was no response.

Source: Yemen Post

One Person Killed in Tribal Revenge

By Fatik Al-Rodaini

Sana'a- Mar 7, 2011- At least one person was killed after an undefined armed group killed him before his home in Yemen's capital, Sana'a. Sheikh Ali Ahmed Mosed Al-Sheba from Al Areashia tribe was killed on Monday by armed men belonging to Al Okebi tribe.

Private sources said that the two tribes from Al-Baeda province had tribal revenge problems between them. However, they signed an agreement to end revenge clashes among them in 2010.

In a statement Al Areashia tribe said that attackers were from Al Okebi tribe, and they threatened to take revenge on their Sheikh's killers.

According to analysts, this kind of crimes will separate in Yemen in the current unrest situation that faces the country.

Unusual tribal groups in the region have long clashed in disputes over land and the tribal violence had proved especially deadly, with many people killed and many others injured since decades.

Observers warned that without urgent intermediation to end revenge clashes in Yemen, the country would suffer a crucial disaster.

To solve these conflicts effectively requires an ability to understand Yemen's law and an awareness and respect for the cultural and inter-generational divides that characterize the disputes, according to lawyer Mohammed Naji Allaw, Chairman of the National Organization for Defending Rights and Freedoms (HOOD).

He said that those disputes are special because their cultural, social, and historical components often play singularly important roles, with roots that extend back many decades.