US embassy cable - 05SANAA461

C O N F I D E N T I A L SECTION 01 OF 02 SANAA 000461 
 
SIPDIS 
 
PLEASE PASS TO MCC, G/NICOLE BIBBINS SEDACA 
 
E.O. 12958: DECL: 03/04/2015 
TAGS: PREL, PGOV, PHUM, KMPI, KDEM, EAID, ECON, EFIN, YM, ECON/COM 
SUBJECT: U/S DOBRIANSKY'S MEETING WITH MINISTER OF PLANNING 
AND INTERNATIONAL COOPERATION SOFAN 
 
 
Classified By: DCM Nabeel Khoury for reasons 1.4 (b) and (d). 
 
1. (C) Summary. On February 24, Under Secretary for Global 
Affairs Paula Dobriansky urged Deputy Prime Minister and 
Minister for Planning and International Cooperation Ahmed 
Sofan to use the MCC threshold process to Yemen's full 
advantage and implement serious anti-corruption measures. 
Sofan replied that Yemen faces serious developmental 
constraints and suffers from an unjustified reputation as a 
result of its support for Iraq in the 1991 Gulf War.  U/S 
impressed upon Sofan that in order to achieve the jump for 
threshold to MCC status, the ROYG must muster the political 
will to address Yemen's pervasive corruption problems.  End 
summary. 
 
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MCC -- Do Not Waste the Threshold Years 
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2. (C) Under Secretary for Global Affairs Paula Dobriansky 
met with Deputy Prime Minister and Minister for Planning and 
International Cooperation (MOPIC) Ahmed Sofan on 
February 24.  Calling the MCC process a tremendous 
opportunity for Yemen to move forward on much needed economic 
and democratic reforms, she congratulated Sofan on his 
Ministry's successful submission of Yemen's MCC threshold 
proposal.  U/S emphasized that the time is now to institute 
pressing reforms -- particularly on corruption. 
 
3. (C) Using his standard retort, Sofan said that Yemen has 
paid a price for its democratic stance and blamed Yemen's 
poor economy on the refusal of its (less democratic) Gulf 
neighbors to invest in Yemen.  "They think we are trying to 
expose them," 
complained Sofan, "and so they penalized us for our 
democratic values."  Not stopping with what he considers the 
external impediment to reforms, Sofan also pointed a finger 
at opposition political party Islah.  "Internally we have a 
lot of opposition to our economic reform program.  Fighting 
corruption is a critical part of our action plan, 
but the opposition is blocking us in Parliament."  Touting a 
MOPIC effort to require ROYG officials to publicly disclose 
their assets, Sofan claimed Parliament and the Islah party 
were standing it its way.  (Comment:  Islah's small minority 
could not solely be responsible for the bill's non-passage. 
A lukewarm GPC party endorsement allowing members to act on 
behalf of their own interests is likely the real culprit. 
End comment). 
 
4. (C) "We are encouraged by the MCC process," Sofan told 
U/S, but Yemen needs "more money" to maintain the reform 
momentum.  Development assistance would go much farther, 
suggested U/S, if the ROYG implemented anti-corruption 
measures.  Development is a partnership, explained U/S, but 
Yemen needs to move forward on much needed economic and 
democratic reforms.  She closed the subject by saying, "It is 
in your hands." 
 
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Improving the Investment Climate 
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5. (C) Turning to the Trade Investment Framework Agreement 
(TIFA) process, Sofan described his meetings last fall with 
USTR in Washington as a good first step to WTO succession. 
Suggesting that Yemen's slow accession at the WTO was due to 
member country opposition, Sofan asked for increased 
political support from the U.S. to help the ROYG defeat 
these naysayers.  "What we really want," exclaimed Sofan, "is 
a Free Trade Agreement." (Comment: The only thing hindering 
WTO accession is Yemen's lack of trade expertise, slow 
movement on legal reforms and poor investment climate. End 
comment).  Sofan requested that U/S explore a "fast track" 
FTA for Yemen.  U/S said she would take this message back to 
Washington. 
 
6. (C) Due to Yemen's opposition to the 1991 Gulf War, Sofan 
theorized Yemen was "labeled" and given a bad reputation for 
investment.  His solution, "we need guaranteed credits from 
the EXIM bank and to work with the Oversees Private 
Investment Cooperation.  U/S replied that President Saleh's 
trip to Sea Island and the ROYG's participation with the G-8 
in the BMENA Dialogue for Democracy has improved Yemen's 
global standing. 
 
7. (C) Comment: Sofan's position that Yemen's problems are 
others' fault (and responsibility) is beginning to wear thin. 
 Washington visitors and mission representatives continue to 
raise outstanding concerns on corruption and the investment 
climate, but rarely does Sofan accept any responsibility on 
behalf of the ROYG.  The real test of whether our message is 
getting through to Sofan will be Yemen's implementation of 
its threshold proposal for the Millennium Challenge Account. 
End comment. 
Khoury