Bush Proposes Doubling US Aid to Yemen
“Throw money at it” seems to be the universal thinking of Yemen’s donors who are increasingly nervous about the deteriorating situation. And if the reform programs worked, it would be great. But statistically, most donor funds (aid and loans) are stolen, wasted or unspent.
In 2005, $14.8 million was budgeted for aid to Yemen. In 2006, USAID funding fell to $9 million after Yemen lost its standing as an applicant for Millennium Challenge Account (MCA) aid. This took place because of repression of journalists and failure to tackle corruption. In addition to the drop in USAID funds, Yemen lost $30 million in MCA support requested for 2007 as well as more than $100 million in World Bank aid.
PRESIDENT’S BUDGET REQUEST FOR FISCAL YEAR 2009: DEMOCRACY, GOVERNANCE, AND HUMAN RIGHTS IN THE MIDDLE EAST 30
Yemen
The FY09 request for assistance to Yemen nearly doubles the total amount granted in FY08, from $17.6 million to $33.8 million, surpassing the highest previous amount of funding granted to Yemen, $29.1 million in FY 2005. The request also represents a restructuring of the assistance package to Yemen which appears in several ways to be modeled on the existing aid package for Morocco. This includes significant requests for funding for civil society and political competition and consensus-building, none of which received any funds under the FY08 appropriations. In addition, funding for the Good Governance program area sees a proposed 64% increase, which would bring the total requested funding for the Governing Justly and Democratically objective to a ninefold increase, from $913 thousand in FY08 to $7 million in the current request.
Yemen also receives assistance through the Millennium Challenge Corporation, in the form of a two-year, $20.6 million threshold compact signed in September 2007, though the funds have not yet been given to Yemen pending a further review of grant proposals. The agreement designates funds for programs
to decrease public sector corruption, increase capacity in the judicial sector, enhance
election processes and participation, and enhance the investment climate through tax reform, domestic debt management, procurement reform, and customs modernization.
Threshold agreements are made available to countries that do not yet meet the requirements in terms of indicators for political and economic reform, but meet less stringent requirements and are eligible for smaller, shorter-term agreements pending progress on indicators.
Yemen was initially declared eligible for an MCC threshold agreement in 2004, but the MCC Board announced the suspension of Yemen’s eligibility in November 2005 due to deterioration in its performance on the selection criteria, particularly levels of government
corruption.38 Yemen’s threshold eligibility was restored in February 2007, with the MCC Board praising an “aggressive reform effort” kicked off by President Ali Abdallah
Saleh in February 2006 with a Cabinet shuffle, and which included presidential elections deemed reasonably free and fair in September 2006.
The request calls for overall economic/development
assistance to exceed the peak levels
38 See David Finkel’s three-part Washington Post series, “Yemen: Exporting Democracy,” December 18-20, 2005. In particular, part three, “In the End, a Painful Choice,” December 20, 2005, describes U.S. government disappointment in Yemeni reform and anticorruption efforts at that time, leading to the suspension of the MCC agreement as well as reduction of World Bank assistance.
Yemen: Total FY09 Request by AccountChild Survival& Health16%Governing Justly & Democratically (GJD)21%Military Assistance22% Other Development Assistance (DA) 41%012345678Civil SocietyPolitical Competition &Consensus BuildingGood GovernanceFY09RequestFY08EstimateFY07ActualFY06ActualYemen: GJD Funding, FY06-09Millions of Dollars
31 THE PRESIDENT’S BUDGET REQUEST FOR FISCAL YEAR 2009: DEMOCRACY, GOVERNANCE, AND HUMAN RIGHTS IN THE MIDDLE EAST
of FY05 and for considerable expansion of funding for democracy and governance programs.
However, Congress has been reluctant
to grant the President’s requested funds for Yemen, and does not consider Yemen to be a top priority in the region. Consequently, it seems likely that the President’s request will not be fully granted in this case.
