US embassy cable - 04SANAA2389

C O N F I D E N T I A L SECTION 01 OF 02 SANAA 002389 
 
SIPDIS 
 
USTR FOR BUNTIN 
 
E.O. 12958: DECL: 09/07/2014 
TAGS: KMCA, EAID, ECON, LE, YM, ECON/COM 
SUBJECT: DPM SOFAN WARMLY WELCOMES AMBASSADOR 
 
REF: SECSTATE 190772 
 
Classified By: Ambassador Thomas C. Krajeski for reasons 1.4 (b and d). 
 
1. (C) Summary: Deputy Prime Minister and Minister of 
Planning and International Cooperation warmly welcomed 
Ambassador to Yemen on 9/6. After reviewing recent progress 
in development cooperation and touching on the negative 
economic effects of the al-Houthi problem, Sofan and 
Ambassador discussed pending development issues: MCA 
Threshold status, TIFA, and the Broader Middle East and North 
Africa (BMENA) Initiative.  Smoothing over potential snags in 
the bilateral relationship, Sofan demonstrated his 
willingness to be an open and effective interlocutor. End 
Summary. 
 
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U.S.-Yemeni Cooperation Building 
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2. (C) Deputy Prime Minister Ahmed Sofan welcomed Ambassador 
to Yemen, saying, "I want to assure you of our full 
commitment to improve the relationship with the U.S." 
Ambassador pledged to DPM that he will always be available 
for consultations.  Ambassador said while security issues are 
important, he will also focus on development and commerce 
issues. 
 
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Al-Houthi Causing More than Just Military Problems 
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3. (c) Sofan complained that Yemen's image abroad does not 
accurately reflect reality, adding that the situation 
concerning al-Houthi is "misunderstood from the outside," and 
contributes to the impression that Yemen is a haven for 
terrorism.  In addition to the human losses from al-Houthi, 
Sofan said tourism is down this year and the ROYG is facing 
financial constraints from the loss of tourism dollars and 
the increased budget expenditures for military action. 
 
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BMENA, TIFA and MCA 
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4. (C) Turning to the current U.S. - Yemen development 
agenda, Ambassador passed to Sofan Secretary Snow's 
invitation to the 10/1 Middle East Finance Ministers Meeting 
(reftel).  Sofan mentioned that Treasury Undersecretary 
Taylor called on 9/5 to discuss the meeting and request 
Yemen's feedback.  Commenting that Lebanese Finance Minister 
Siniora, Middle East Agenda Coordinator, may not fully 
understand Yemen's needs, particularly in the area of 
microfinance, Sofan said he will provide input on the agenda. 
 
5. (C) Recalling Yemen's offer to host the first Trade 
Investment Framework Agreement (TIFA) talks, Deputy Prime 
Minister described the U.S.-Yemen Trade Relationship as a 
marathon with the finish line being a Free Trade Agreement. 
Ambassador replied that Post is working on the first step, 
finalizing dates for the first round of TIFA discussions. 
Aware of round two Millennium Challenge Cooperation 
competition, Sofan said he is reviewing Yemen's scores and 
plans to focus on the judiciary, business development, 
election processes, and human rights.  Sofan commented that 
many of the indicators are intertwined, and change in one 
sector will likely effect scores across multiple indicators. 
 
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Relations with China Expanding? 
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6. (C) Sofan raised the upcoming visit of Chinese Foreign 
Minister Li Zhaoxing, and said Yemen won an agreement from 
China's Export/Import Bank for 450 million USD in facility 
guarantees, 8-10 million of which is in supply credits. 
Sofan explained that China is watching African and Gulf 
Economies, adding that the Gulf should see 5-8 percent 
regional growth.  (Comment: Yemen's economic growth rate of 
around 3.5 percent falls far short of its Gulf neighbors. 
Still, the economic relationship between Yemen and China is 
growing  Not a week goes by without a new press article 
discussing new business relationships particularly in the oil 
and gas sector. End comment). 
 
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Comment 
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7. (C) Comment: Sofan took care to skirt sensitive issues, 
(i.e. TIFA and MCA Threshold status) and did not repeat his 
usual refrain on the paucity of USG Development assistance. 
Sofan and his Ministry are fundamental components of our 
development relationship with Yemen.  His support is also 
needed to advance USG objectives in Yemen such as continued 
economic and democratic reform.  End comment. 
KRAJESKI