US embassy cable - 05SANAA193

UNCLAS SANAA 000193 
 
SIPDIS 
 
SENSITIVE 
 
STATE PLEASE PASS TO MCA 
 
E.O. 12958: N/A 
TAGS: KMCA, ECON, ETRD, EAID, EINV, YM, ECON/COM 
SUBJECT: DPM SOFAN PROMOTES DONOR HARMONIZATION AND 
INVESTMENT CLIMATE AND SUBMITS MCC-THRESHOLD CONCEPT PAPER 
 
REF: SANAA 106 
 
1. (SBU) Summary.  On January 30, Ambassador joined key 
donors and Deputy Prime Minister and Minister of Planning and 
International Cooperation Ahmed Sofan in signing a 
declaration on their intent to enhance donor coordination in 
Yemen.  In a follow-on meeting with Sofan, Ambassador raised 
Socotra development and underscored continuing concerns over 
the Port of Aden tendering process.  USAID/Yemen Director 
accepted the ROYG's concept paper for the MCC Threshold 
program.  End summary. 
 
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Ambassador Signs Harmonization Declaration 
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2. (SBU) Chiefs of Missions from the major Yemen donors (UK, 
Japan, France, Germany, Italy, EC, UNDP, Netherlands, World 
Bank and the U.S.) and DPM Sofan signed a declaration 
signaling their commitment to enhance donor coordination on 
January 30 (email copy sent to NEA/ARPI).  Cosponsored by the 
Ministry of Planning and the Netherlands, the text of the 
declaration is based on the 2003 Rome Declaration on Donor 
Harmonization.  Sofan touted bi-annual donor meetings and an 
upcoming action plan as a path to a more coordinated donor 
approach to Yemen.  In a letter to DPM Sofan, Ambassador 
echoed U.S. statements made at the Rome conference 
underscoring USG policy that we will comply with the 
declaration as long as it is consistent with our national 
policies and interests.  On the margins of the signing 
ceremony, an E.C. rep told Pol/Econ Deputy that their 
organization was dubious about the actual meaning of the 
document, but the E.C. wanted to be seen as a supporter and 
not a hindrance to increased donor cooperation.  The Japanese 
Ambassador also expressed similar reservations to Ambassador. 
 
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Sofan Agrees to Redirect Money to Socotra 
Island Conservation 
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3. (U) Following the Ambassador's January 17-19 visit to 
Socotra Island, he requested that 250,000 USD of 03 PL-480 
money be reallocated to the Socotra Conservation Fund.  Sofan 
agreed and underscored the importance of developing 
eco-tourism, social and economic development and preserving 
the island's unique biological diversity. 
 
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MCC Threshold Concept Paper Delivered 
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4. (U) Characterizing Yemen's MCC-Threshold Concept Paper as 
a "starting document" Sofan formally handed it over to USAID 
Director.  The paper focuses on improving Yemen's investment 
climate and proposes a number of steps to look at commercial 
courts, land registration and anti-corruption measures in two 
years.  Ambassador thanked the DPM for his efforts on the 
paper, but stressed that the real work is just beginning as 
the concrete steps Yemen will take on serious reform must be 
further articulated. 
 
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Sofan Offers Assurances on Soundness of Aden Port Tender 
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5. (U) Ambassador raised concerns with the DPM over the 
integrity of the Aden Port tender (reftel).  Pointing to 
"mistakes" made at the Ministry of Transportation and by the 
consultants regarding the tendering process, Sofan said that 
to correct the problem, the High Tendering Committee agreed 
to allow the widest competition for the Port, i.e. all nine 
companies will submit bids to manage the port.  Sofan agreed 
to Ambassador's suggestion that a representative of the 
international community independently observe the process. 
Sofan said he would ask the World Bank to place someone on 
the committee and noted the tenders would be submitted on 
March 2.  (Note: Previously, the ROYG rejected World Bank's 
advice on matters concerning the Port of Aden. End Note). 
Sofan claimed that the process was sound and that it would 
exemplify the ROYG's new focus on improving its investment 
climate. 
Krajeski