US embassy cable - 05SANAA573

UNCLAS SECTION 01 OF 02 SANAA 000573 
 
SIPDIS 
 
ABU DHABI PLEASE PASS TO FOREIGN COMMERCIAL OFFICE 
RIYADH PLEASE PASS TO FOREIGN COMMERCIAL OFFICE 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, ECON, YM, ECON/COM 
SUBJECT: TAIZ: THE FORGOTTEN CITY 
 
1.  This is an Action Request for Riyadh Foreign Commercial 
Office. Please see Para 4. 
 
2. Summary: In a two day trip to the Taiz Governorate March 
3-4, CDA explored opportunities to expand the mission's 
relationship with Yemen's third largest city.  Deputy 
Governor AbdulMalik al-Hiagem sought vocational and technical 
training for education.  Business leaders echoed water 
complaints, while Civil Society representatives sought to 
expand USG interaction with their organizations.  Local 
council representatives expressed frustration with increasing 
poverty and neglect from central authorities and western 
embassies.  Taiz has the potential for tourism and commercial 
ventures, but business executives and government officials 
have to work harder to fully explore that potential. 
Possibilities should be explored for U.S.-Yemeni private 
sector partnerships.  End Summary. 
 
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Deputy Governor Hopeful for USG Water Grant 
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3.  Deputy Governor Mohammed AbdulMalik al-Hiagem told CDA 
the Taiz governorate has a population of over 2 million and 
over 1,000 schools.  Noting that the Governor, who was called 
to Sanaa at the last minute, was pleased with U.S. 
cooperation on a water study, Hiagem underscored extreme 
water problems in Taiz.  Economically, Taiz depends on 
industry, agriculture, and fishing for revenue, although 
according to Hiagem they are now focusing on ways to expand 
tourism.  Despite the diverse economy, Taiz is still a poor 
governorate and the Deputy Governor asked for technical 
assistance to expand vocational education opportunities. 
Hiagem closed the meeting by noting that the first USAID 
project in Taiz began during the Kennedy Administration, and 
hoped that cooperation would resume. 
 
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Business Community Dominated 
by Hayel Saeed Conglomerate 
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4.  Showki Hayel Saeed, a local council member, member of the 
Chamber of Commerce, and unofficial spokesman for the Hayel 
Saeed Group (HSG), said business is going well but 
opportunities existed for more American investment.  CDA 
raised the possibility of a catalogue show at the Chamber of 
Commerce to help local businessmen explore potential 
partnerships with U.S. firms.  The Chamber President, who 
said the Chamber is looking to invest in tourism promotion 
welcomed the suggestion of a catalogue show and promised to 
follow up with Post on implementing the idea.  Water issues 
predominate even in business life and officials noted the 
necessity to secure private sources of water and truck it in 
to maintain business operations.  Saeed also noted plans to 
make Taiz the cultural capital of Yemen.  Post requests 
assistance from the Riyadh Foreign Commercial Office in 
arranging a catalogue show.  End Action Request. 
 
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Civil Society Active, But Seeking More Recognition 
--------------------------------------------- ----- 
 
5.  CDA hosted a reception with 40 civil society 
representatives from the Taiz area.  Azz al-Deed Saed 
al-Asbahi, General Director of the Human Rights Information 
Center, requested more visits from emboffs and noted that the 
Taiz civil society has remained strong since the 1960s when 
Taiz was the capital of the South.  Souad Ata al-Gedsi of the 
Women's Forum Research and Training Center called Taiz the 
"forgotten" city, and noted that since 1991 poverty has 
increased rapidly while the middle class has shrunk.  The 
majority of the 1.2 million Yemeni guest workers deported 
from Gulf countries during the 1991 Gulf War were from the 
Taiz area.  Since their return, she said, the area has never 
been the same.  Executive Director of the Alaweal Company for 
Microfinance which is under the auspices of the United 
Nations Development Program, Anisa al-Bahar, told CDA that 
her organization has provided over 100,000 loans and boasts a 
96.7 percent repayment rate.  Loans to women, she said, range 
between 6,000 and 15,000 Riyals (32-80 USD).  Bahar said much 
more needs to be done, however, especially in expanding the 
program to reach women in rural areas. 
 
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Local Councils 
-------------- 
 
6.  CDA visited the Makbana local council, approximately 60 
km southwest of Taiz.  The rural district has roughly 100,000 
people with each of the 23 members representing 3,500 - 5,000 
residents.  Representatives complained of little control over 
resources, leaving them unable to manage but a few public 
services such as maintaining schools and roads.  Money for 
new projects, however, must be obligated by central 
authorities.  One representative noted that the council only 
received 1.5 million Riyals for yearly projects (roughly 
8,000 USD).  Several council members expressed the need for 
additional resources to carry out their newly drafted 
five-year plan for the area. 
 
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Taiz University President 
------------------------- 
 
7.  During a visit with Taiz University President, Dr. 
Abdullah Mohammed al-Sofi, CDA and Dr. al-Sofi discussed 
undertakings and achievements of the university.  Dr. al-Sofi 
told CDA his university has about thirty thousand students, 
one-third of whom are women.  In 2005, the university will 
graduate its first class of medical students.  Shortcomings, 
however, include the lack of a placement office for 
graduates.  The university has developed relationships with 
local businesses for some placements, but public and private 
partnerships could be greater.  CDA noted his satisfaction 
with the university's achievements and noted his desire to 
increase visits to the institution by emboffs to hold 
academic forums, to discuss current issues of common interest 
to the US and Yemen and to encourage linkages between the 
university and universities in the US. 
 
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Comment 
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8.  Nestled in the mountains, the former capital is mostly 
defined by the presence of the Hayel Saeed Corporation and 
its severe water shortages.  Without the large business, Taiz 
would grow poorer, and the middle class even thinner than it 
is currently.  Taiz has the potential to be a mountain resort 
and a magnet for tourism.  Investment, both domestic and 
foreign, holds the key. Post will explore catalogue shows and 
marketing seminars with the local chamber of commerce to help 
push thinking in this direction. End comment. 
Krajeski