This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 09 SANAA 001559 
 
SIPDIS 
 
STATE FOR NEA/RA; NEA PPD; NEA/ARP 
STATE PASS TO USAID FOR ANE/DAA 
 
E.O. 12958: N/A 
TAGS: BEXP ETRD PGOV PHUM SCUL SOCI KPAO EAID YM DEMOCRATIC REFORM ECON COM
SUBJECT: YEMEN'S MEPI STRATEGY 
 
REF A) STATE 126550; B) SANAA 166 
 
¶1. (U)Summary: Embassy Sanaa presents the MEPI Strategy 
2003/04 at para 2,  prepared by the Embassy Development Team 
that includes Pol/Econ, PD and USAID. This strategy reflects 
Embassy Sanaa's long-term goals for MEPI.  Embassy Sanaa 
believes MEPI will become a substantive part of our 
engagement with the ROYG, and looks forward to substantial 
programs in the MEPI pillars of Education, Democracy and 
Economic Reform. End Summary. 
 
¶2. (U) BEGIN MEPI STRATEGY TEXT: 
 
-------------------------- 
Introduction and Overview 
-------------------------- 
 
In the past two years, the U.S.-Yemeni relationship made 
great strides: Yemen is a key partner in the war on 
terrorism, a USAID office re-opened, and recent 
Parliamentary elections demonstrate that Yemen is making 
solid democratic progress.   However, internal instabilities 
are threatening the country's move towards greater democracy 
and economic freedom, which could possibly weaken the U.S.- 
Yemen partnership against terrorism. Extreme poverty, an 
uneducated populace, inexperienced civil society, and 
traditional tribal order all threaten Yemen's ability to 
move forward. 
 
Over the next five years, Embassy Sanaa's MEPI goals are 
aimed at giving Yemen an opportunity to provide its citizens 
with more educational opportunities, stronger democratic 
institutions, and improved economic conditions.  MEPI 
initiatives will expand choices in education, government, 
and economics to empower all Yemenis, including the 
traditionally marginalized categories of the poor, women, 
and children, to become active participants in all aspects 
of Yemeni society. 
 
Specifically, we expect Yemen to have made great strides in 
its security situation, buttressed by significant progress 
in democracy. A diversified economy will provide jobs for a 
growing population.  In education, we envision greater 
access to schools for both girls and boys, and more 
education choices that lead toward jobs in the private 
sector. 
 
Specifically, Embassy Sanaa requests MEPI funding for: 
 
Education Reform 
  1)   Expanding basic education and literacy; 
2)   Increasing English language training; 
3)   Improving technical training; and 
  4) Expanding U.S.- Yemeni Education and Research 
  Cooperation 
 
Political Reform 
  1)   Strengthening democratic institutions 
2)   Improving electoral processes 
3)   Reforming the judiciary 
4)   Increasing the professionalism of media organizations 
and journalists 
 
Economic Reform 
  1)   Increasing trade and investment 
2)   Expanding employment and business opportunities at the 
local level 
3)   Enhancing policy reform and program development 
 
Each pillar strategy is comprehensive and includes an 
analysis of the need for reform along with achievable and 
measurable results. The entire MEPI strategy corresponds to 
our 2005 MPP plan, including Goal 3: Democratic Systems and 
Practices; Goal 4: Economic Growth and Development; and Goal 
5: International Public Opinion.  Based on this strategy, 
Embassy Sanaa looks forward to working closely with MEPI and 
USAID personnel to develop specific activities and Request 
for Grant Proposals. 
 
 
--------- 
Education 
--------- 
 
The quality of education and training helps determine 
economic development and social progress in Yemen. 
Therefore, Embassy Sanaa will focus on raising education 
standards and providing the training needed to meet the 
demands of the modern business environment and increased 
trade. Higher education standards will also create an 
improved climate for development goals.   Corresponding with 
Post's MPP Economic Growth and Development and International 
Public Opinion goals, the MEPI Education strategy includes 
support for:  1) Expanding basic education and literacy; 2) 
Increasing English language training; 3) Improving technical 
training; and 4) Expanding US-Yemeni education and research 
cooperation. 
 
¶1. Expanding Basic Education and Literacy 
 
Problem: Only half of all Yemeni children aged 6 to 11 
enroll in school and gender disparity is pronounced, 
especially in rural areas where only 30% of girls attend 
school and two-thirds drop out before completing their 
primary education.  In the rural areas where three-fourths 
of Yemenis live, 68% of men and 94% of women have had no 
formal education or have failed to complete primary school. 
Nearly all (91%) never-married rural women are illiterate. 
Only 60 percent of teachers have a basic education, or at 
most, one to two years of secondary school.  The majority of 
children in grades 4-6 have difficulty relating what they 
learn in schools to their daily lives. Most pupils have 
limited ability to read, write or solve problems.  There are 
shortages of teachers and teaching materials.  Constraints 
also include severe overcrowding, insufficient numbers of 
schools and inadequate school buildings. 
 
In Yemen, girls are more likely to enroll and stay in school 
if they have female teachers, but only a fifth of Yemeni 
teachers are women and only 8% of those women teachers work 
in the rural areas.  Only 56% of schools have any toilet 
facilities and few have separate facilities for girls. 
Overcrowded co-educational classrooms also deter girls' 
enrollment and retention because families feel uncomfortable 
with the close physical proximity of male and female 
students. 
 
MEPI Strategy: 
 
The USG education strategy in Yemen focuses on basic 
education (grades 1-6), improved literacy, especially for 
women and girls, and education reform.  To carry out these 
goals, Embassy Sanaa seeks MEPI funding in the following 
areas: 1) Enhancing access to quality primary education in 
the public sector; 2) Increasing literacy and numeracy for 
adults and out-of-school youth at the community level; and, 
3) Improving the environment for public education. 
 
¶1. Enhancing access to quality primary education in the 
public sector: 
 
     -- Build, renovate and equip elementary schools in 
     partnership with community organizations. Special 
     attention will be paid to physical constraints to 
     girls' participation (e.g. separate latrines) 
 
     -- Train teachers (especially female teachers) with a 
     focus on improved students' ability to think abstractly 
     and solve problems 
 
     -- Train administrators to better manage limited 
     resources and increase engagement with the community 
 
¶2. Increasing literacy and numeracy for adults and out-of- 
school youth at the community level: 
 
     -- Create opportunities for illiterate men, women and 
     children in rural communities to learn to read, write 
     and do basic math in programs related to their needs. 
     Community-based activities may include 
     radio/video/internet distance-learning and parents' and 
     women's education circles 
 
¶3.  Improving the environment for public education 
 
     -- Develop district and governorate education plans 
     with community participation; Increase citizen input by 
     providing education planning and program grants 
     -- Promote new teaching approaches, i.e., interactive 
     and inquiry-based learning 
     -- Develop policies to increase girls' enrollment and 
     retention in school 
     -- Structure outreach programs to educate adults and 
     out-of-school youth 
     -- Provide technical assistance to the Ministry of 
     Education and the district and governorate education 
     offices to implement the ROYG decentralization 
     objectives and the ROYG Basic Education Strategy 
     -- Provide technical assistance to the ROYG at all 
     levels to collect and use education data for planning 
     and management 
     -- Develop IT applications that can be used with solar 
     and satellite technology 
     -- Develop programs to improve public attitudes 
     regarding the value of education, especially for girls 
 
Expected Results: 
 
     -- Increased number of teachers trained in interactive, 
     inquiry-based, teaching methods 
     -- Increased number of administrators trained, with a 
     focus on maximizing limited resources 
     -- Education facilities improved 
     -- Increased average number of days teachers spend in 
     the classroom 
     -- Increased enrollment and retention of girls in 
     school 
     -- Increased numbers of adults and out-of-school youth 
     with improved basic literacy and numeracy skills 
     -- Expanded communities receiving education outreach 
     services 
     -- Community-based education organizations formed or 
     strengthened 
     -- District and governorate education plans and 
     resource allocation budgets prepared with community 
     participation 
     -- District and governorate education offices with data- 
     based planning capacity; District education offices 
     that plan and share budget information with the 
     community 
 
¶2.  Increasing English Language Training 
 
Problem: English language instruction is uneven throughout 
the Republic of Yemen.  In Sanaa, English has become a 
"second language," where it is routinely used in business, 
educational and diplomatic endeavors.  The Yemen America 
Language Institute (YALI)'s high enrollment figures 
(approximately 1,350 students per term), the number of new 
language institutes, and the number of professional job 
vacancies requiring English proficiency all point to a clear 
demand for quality English language instruction. 
 
Outside of Sanaa, however, a far lower percentage of the 
population has any working knowledge of English.  Moreover, 
there are few venues to learn English outside of Yemeni 
schools and universities in the major cities.  Even where 
English is taught, the quality of language teaching is 
mediocre.   Without increased opportunities to learn 
English, Yemen's development options will continue to be 
limited along with the American-Yemeni political, economic, 
and cultural relations. 
 
MEPI Strategy: 
 
To improve the quality of English language training in Yemen 
and to expand access to English instruction, Embassy Sanaa 
seeks MEPI funding to: 
 
     -- Expand English language instruction in rural Yemen 
     -- Provide training in technical and specialty topics 
     (e.g. medical, auxiliary health services, public 
     administration, engineering, business, trade, finance) 
     -- Offer stipends (tuition, fees, materials, 
     transportation and living expenses) for students and in- 
     service training 
     -- Train English teachers in improved methodology and 
     curriculum 
     -- Supply instructional materials to expand English in 
     public sector classrooms 
 
Expected Results: 
     -- Increased numbers of schools and language centers 
     teaching English 
     -- Expanded pool of teachers able to teach English 
     -- More Yemenis able to communicate and work in English 
 
¶3. Expanding Technical Training: 
 
Problem: There are too few job opportunities for Yemen's 
growing population.  For those who have a high school 
education, finding work is difficult because their skills 
often do not match the needs in the public and private 
sectors.  Adults also do not have the skills now demanded by 
the labor market and must be retrained.  Furthermore, those 
who have academic degrees often lack the practical skills 
required by employers. 
 
MEPI Strategy: 
 
To provide appropriate training suitable for the job market 
in Yemen and to enhance education opportunities for Yemenis, 
the Embassy seeks to use MEPI funding to: 
 
     -- Train teachers at technical universities in updated 
     teaching methodology 
     -- Strengthen Community College management and their 
     ability to provide practical, job-related training 
     -- Promote workforce development centers with the 
     private and public sectors 
     -- Develop curricula in basic technical areas such as: 
     computer skills, laboratory technicians, medical 
     equipment operators and repair technicians, 
     electronics, management, accounting, building 
     management, construction management, hotel and tourism 
     administration 
     -- Offer scholarships to enable students to attend 
     technical training (tuition, fees, materials, 
     transportation and living expenses) 
 
Expected Results: 
     -- Increased enrollment at technical institutes 
     -- Strengthened community college system, including 
     increased enrollment 
     -- Workforce development centers established in 
     partnership with the private and public sectors 
     -- New curricula and teaching materials developed and 
     used by teachers 
     -- Expanded number of students trained and placed in 
     jobs 
 
 
¶4.  Expanding US/Yemeni Education and Research Cooperation: 
 
Problem: American researchers who wish to visit Yemen lack a 
permanent home from where to base their research. Presently, 
the American Institute of Yemeni Studies (AYIS), the premier 
institute of its kind in Sanaa, has been operating out of 
ill-equipped, leased quarters.  As a result, AIYS is unable 
to expand its cultural outreach activities that promote 
deeper understanding between Yemen and America. 
 
MEPI Strategy: Post seeks funding to acquire a facility for 
AIYS. 
 
Expected Results: 
     -- Enhanced U.S.- Yemen cooperation in research and 
     cultural exchanges 
     -- Establishment of a permanent home for the American 
     Institute of Yemeni Studies 
 
---------------- 
Political Reform 
---------------- 
 
Despite a weak economy, nascent democratic development, and 
few examples to draw from in the Middle East, Yemen has 
moved towards significant political reform since 1990. 
Yemen has universal suffrage, a multi-party system, elected 
national and local representatives, and an active, if still- 
developing, civil society sector.  However, recent April 
2003 parliamentary elections exposed the considerable 
weaknesses that remain in Yemen's political reform efforts, 
including allegations of fraud, a lack of support for women 
candidates, and a judicial and media system that favored the 
ruling party. 
 
With local council and presidential elections scheduled for 
2006 providing an important opportunity, the MEPI goals of 
strengthening democratic processes, promoting the rule of 
law and accountable, effective government institutions, and 
strengthening the role of media in society will help 
strengthen citizens' participation in democratic life and 
foster a society in which adherence to the rule of law is 
the norm.  Corresponding with Post's MPP Democratic Systems 
and Practices goal, the Embassy Sanaa strategy for MEPI 
political reform support includes the following categories: 
1) Strengthening democratic institutions; 2) Improving 
electoral processes; 3) Reforming the judiciary; and, 4) 
Increasing the professionalism of media organizations and 
journalists. 
 
¶1.  Strengthening Democratic Institutions 
 
Problem:  Yemen's democratic institutions remain fragile, 
which reduces the avenues by which strong democratic reform 
can take root, particularly regarding the inclusion of women 
and other underrepresented groups.  Local councils, elected 
in 2001, represent an arm of government close to the 
citizens where women and opposition parties stand a much 
better chance to take advantage of political life. However, 
local councils lack the resources, skills, and knowledge of 
their power to function properly.  ROYG Ministry offices at 
the district and governorate levels lack the ability, 
resources, and experience to implement ROYG decentralization 
policy, and engage effectively with elected officials and 
citizens. 
The Parliament also remains weak and is not effective in 
providing oversight of the executive branch of ROYG, 
drafting legislation, or representing constituents.   While 
Yemen enjoys an active multi-party system, the ruling party 
dominates the political scene and all parties lack a clear 
long-term strategy, a membership base that represents 
citizens, and a democratic internal structure.  Strong 
political parties that effectively represent Yemenis are 
needed to consolidate democratic progress.  In a similar 
way, most non-governmental organizations (NGOs) suffer from 
poor organization, little experience, and unfocused goals 
that reduce their ability to advocate effectively on behalf 
of the community, particularly outside of urban areas. 
 
MEPI Strategy: 
 
To strengthen democratic institutions, Embassy Sanaa seeks 
MEPI funding for long-term multi-year programs for 
activities in the following areas: 1) Increasing democratic 
participation; 2) Encouraging decentralization; and, 3) 
developing the NGO sector and civil society. 
 
¶1. Increasing Democratic Participation 
 
     -- Local council governance program to assist members 
     to better represent their constituents and act as more 
     effective officials through training on their legally 
     mandated roles and responsibilities, including 
     integrating traditional tribal culture into democratic 
     political culture.  (FY O2 MEPI funds have funded the 
     first-phase of this project via the National Democratic 
     Institute (NDI) through March 04.) 
     -- Parliamentary strengthening program to build the 
     institutional capacity and increase the ability of 
     parliament to act as an independent entity through 
     training new members, fostering communication between 
     democratic institutions and improving constituency 
     relations 
     -- Political party strengthening program to consolidate 
     party representation of citizens and strong multi-party 
     competition 
     -- Women in politics program to improve the skills and 
     knowledge of women office holders and increase the 
     number and efficacy of future women candidates for 
     public office as a complement and follow-on program to 
     the regional campaign training schools program that 
     began in November 2002 and ongoing NDI programming. 
 
¶2.   Encouraging Decentralization: 
 
    -- Pilot decentralization projects in selected 
    governorates to train and equip local councils to 
    manage resources and provide services to constituents 
    -- Pilot decentralization projects in selected 
    governorates to train and equip local offices of ROYG 
    Ministries to engage effectively with local councils 
    and citizens to plan and implement sectoral programs 
 
¶3.   Developing the NGO sector and Civil Society: 
 
    -- Enable the NGO sector and civil society to 
    effectively participate in community and human rights 
    development through training interventions and 
    establishing an NGO support center 
 
Expected Results: 
     -- Increased numbers of local councils that represent 
     citizens effectively, obtain and allocate resources 
     wisely, provide needed services to the community, 
     integrate tribal culture and offer avenues for women 
     and other disadvantaged groups to participate in 
     democratic life 
     -- Increased number of times Parliament challenges 
     government initiatives or amends legislation 
     -- Increased number of Members of Parliament (MPs) who 
     represent constituents effectively 
     -- Increased use of strategic planning and internal 
     democratic processes by political parties 
     -- Increased party membership base representing 
     citizens across Yemen 
     -- Increased multi-party competition resulting in a 
     more balanced political spectrum 
     -- Increased numbers of women in elected office 
     -- Increased numbers of elected women and men with the 
     ability to advocate effectively on issues 
     -- Increased efficacy and number of NGOs that 
     effectively advocate on behalf of citizens 
     -- Increased number of district and governorate offices 
     of ROYG Ministries that engage substantively with local 
     councils and citizens in program planning and resource 
     allocation 
¶2.  Improving Electoral Processes 
 
Problem: The April 2003 parliamentary elections marked an 
improvement in Yemen's electoral process, but significant 
flaws show that much more work is needed to build confidence 
in the electoral process.  With local council and 
presidential elections scheduled for 2006, problems with the 
voter registry (caused by a lack of civil registry 
documenting citizens accurately that allowed significant 
underage voting), election administration, political party 
fraud, and citizen confidence in the election must be 
addressed. 
 
MEPI Strategy: 
To improve the electoral process, Embassy Sanaa seeks 
support for the following long-term programs: 
 
     -- Continue to assist to the Supreme Committee for 
     Elections and Referenda (SCER) to professionalize its 
     operations and to administer the 2006 elections in an 
     effective, independent and confidence-building manner 
     -- Assist the ROYG and SCER to develop a modern, cost- 
     effective, accurate and comprehensive civil registry 
     -- Support and train Yemeni civil society groups to 
     monitor the elections to help ensure confidence in the 
     election and to foster political party confidence in 
     the SCER and election administration 
 
Expected Results: 
 
     -- Increased professionalism in the SCER resulting in 
     effective management of and confidence in the electoral 
     process 
     -- The first-ever civil registry in Yemen and 
     government identification cards for all Yemenis 
     -- Improved accuracy in voter registration and other 
     benefits, including citizen access to basic services 
     and more effective counter-terrorism measures 
     -- Increased confidence in election results through 
     monitoring and effective adjudication of citizen, NGO 
     and political party concerns 
 
¶3.  Reforming the Judiciary 
 
Problem: Yemen's judicial system needs comprehensive reform, 
including reconciling differing pre-unification laws, de- 
politicizing judges, strengthening the application and 
implementation of law, training more effective and fair 
judges, and effectively responding to human rights concerns. 
The absence of effective rule of law affects all aspects of 
Yemeni society negatively, including undermining the 
stability of land tenure, fostering a reliance on tribal 
adjudication outside the political system, and negative 
impacts on expanded trade and investment. 
 
MEPI Strategy: 
 
Participate in the MidEast Regional Judicial Reform program 
and design effective follow-up programming within the Yemeni 
judicial system by training judges, assisting in the reform 
and effective implementation of key laws, and encouraging 
the non-politicization of judges. 
 
Expected Results: 
 
     -- Improved information sharing of best practices in 
     judicial reform across the region 
     -- Increased number of judges that are impartial and 
     give fair judgments 
     -- Increased number of needed laws that are implemented 
     effectively 
     -- Increased confidence and transparency in the 
     judicial system, lessening the reliance on traditional 
     tribal justice 
 
¶4.  Increasing the Professionalism of Media Organizations 
and Journalists 
 
Problem:  While Yemen has a fairly active government and 
opposition written press compared to other countries in the 
Middle East, it suffers from ruling-party dominated 
broadcast media, government oppression of journalists, and a 
lack of professional journalists trained in investigative 
and factual reporting. 
 
MEPI Strategy: 
 
To increase the professionalism of media organizations and 
journalists, Embassy Sanaa seeks funding to establish a 
Media Training Center to: 
     -- Provide working journalists with best practices and 
     methods of journalism, including investigative and 
     factual reporting 
     -- Offer training and support to foster a more 
     effective media sector 
     -- Work to reduce government oppression of the media 
 
Expected Results: 
     -- Increased professionalism of journalists resulting 
     in more effective reporting and decreased oppression of 
     journalists 
 
--------------- 
Economic Growth 
------------------ 
 
One of the 25 poorest and least developed countries in the 
world, Yemen's real GDP per capita is approximately US$300. 
According to the World Bank, GDP growth for 2002 was 2.9 %, 
which does not match population growth of 3.5% a year. 
Unemployment is estimated to be 25-35%, and oil resources, 
which account for one third of the gross national product 
and 70% of government revenues, are expected to decline 
significantly during the next decade.  Despite these 
negative indicators, many international donors praised 
Yemen's fiscal policy and progress in economic reform 
throughout the last five years. 
 
MEPI goals encouraging foreign direct investment and 
developing revenue and employment growth will help diversify 
and strengthen the Yemeni economy by providing jobs, 
expanding the economic base, and, in the long term, lessen 
Yemen's dependence on oil.  Corresponding to its MPP 
Economic Growth and Development goal, the Embassy Sanaa 
strategy for MEPI economic reform support has three goals: 
1) Increasing trade and investment; 2) Expanding employment 
and business opportunities at the local level; and, 3) 
Enhancing policy reform and program development. 
 
¶1.  Increasing Trade and Investment 
 
Problem: Yemen is considered by the World Bank to be among 
the most open and trade liberalized countries in the MENA 
region. However, oil exports represented more than 95 
percent of total merchandise exports in 2000. Of the 
remaining 5 percent, products such as fish, coffee, fruits, 
and vegetables are low value added. This fact made economic 
growth in Yemen vulnerable to volatility in price and 
demand. 
 
Obstacles constraining the growth potential and development 
of export-potential sectors are: 
 
     -- Weak institutional and organizational structures 
     that fail to uphold competition and prevent monopoly, 
     ensure good quality products and protect intellectual 
     property rights 
     -- Limited infrastructure necessary to enhance 
     exporting activities 
     -- Limited-quality economic, population and trade data 
     -- Limited information about markets and demand for 
     products 
     -- Informal activities that dominate the private sector 
     -- Lack of technical know-how, product quality and 
     trade experience resulting in the inability to meet 
     international standards 
 
Similar constraints also restrict the ability of Yemeni 
producers to contribute to internal economic growth and 
employment creation by exporting their products to markets 
within Yemen. 
 
Foreign investors are discouraged from investing in Yemen 
because the commercial legal system is ill-equipped to 
adjudicate disputes. Judges are often unfamiliar with 
commercial law, and since unification, conflicting laws 
remain on the books.  Courts are burdened with large 
caseloads and, often, a case may take years to be heard and 
then stagnates in the appellate process.   If a commercial 
ruling is won, it is rarely enforced.  Without a clear land- 
titling system, limited ability to collateralize against 
property, and courts' reluctance to enforce default 
judgments against property collateral, domestic investors 
are also reluctant to invest their money into new 
businesses. 
 
MEPI Strategy: 
 
The MEPI strategy for trade assistance will work to enhance 
the export climate and to reform commercial law to establish 
the appropriate export and investment environment in Yemen. 
MEPI goals will be coordinated with and assist in Yemen's 
active participation in the proposed U.S.-Middle East Free 
Trade Area.  Embassy Sanaa will also integrate commercial 
law reform with the MidEast Regional Judicial Reform Program 
and subsequent follow-up activities. Embassy Sanaa seeks 
MEPI funding to: 
 
¶1. Enhance the Export Climate 
     -- Identify trade opportunities.  Targeted research in 
     selected sectors will identify opportunities to expand 
     exports and increase investment in new businesses 
     -- Develop the country's overall export potential 
     through an improved legal, regulatory, and 
     institutional environment for international trade 
     -- Improve the quality of data needed for expanded 
     trade and investment 
     -- Provide exporters with the training and technical 
     expertise required to meet international standards 
     -- Support selected elements of the WTO Integrated 
     Framework 
     -- Increase economic growth and jobs 
 
¶2.  Reform Commercial law 
 
     -- Train judges and lawyers in commercial law 
     -- Embark on a program to deconflict old laws remaining 
     on the books since unification 
     -- Expand existing alternative dispute resolution 
     mechanisms to lessen reliance on the over burdened 
     court system 
     -- Develop programs to train ROYG courts to enforce 
     commercial rulings 
     -- Identify participants for the Mideast Regional 
     Judicial Reform Program 
 
Expected Results: 
 
Export Climate: 
 
     -- New trade opportunities identified 
     -- Expanded investment in export sectors 
     -- Improved legal and regulatory environment 
     -- Increased international, regional and internal 
     trade; Enhanced trade links between Yemen and regional 
     trading partners 
     -- Level of non-oil exports increased 
     -- Improved quality and transparency in commercial and 
     population data 
     -- Selected elements of the WTO Integrated Framework 
     supported 
     -- Increased economic growth and jobs at the sub- 
     regional level through increased trade within Yemen 
 
Commercial law: 
 
     -- Increased numbers of judges and lawyers with 
     appropriate commercial training 
     -- Expanded use of alternative dispute resolution, if 
     proven more effective, for commercial cases 
     -- Evidence of enforcement of commercial dispute 
     decisions 
 
¶2.  Expanding employment and business opportunities at the 
local level 
 
Problem: With unequal access to government, credit and 
markets, the growth in number, size, and productivity of 
small to medium-sized enterprises (SMEs) stagnated over the 
last decade. Because SMEs comprise 96 percent of the private 
sector, their lack of growth is stalling the Yemen economy 
and helping to increase the poverty level. 
 
The underserved governorates of Marib, Al-Jawf, Shabwa, 
Saada, and Amran, in particular, have vast, unrealized 
potential in the agriculture, mining, and light 
manufacturing sectors. Enterprises cannot take advantage of 
these resources and potential because they lack financial, 
business, and marketing services and know-how. Virtually no 
opportunities exist for entrepreneurs to access capital, to 
expand or start enterprises or to receive business 
development support (e.g. marketing, business planning). 
 
MEPI Strategy: 
 
The focus will be placed on providing small and medium-sized 
enterprises with greater and reliable access to sustainable 
financial and business services:  1) Enhance microfinance 
and SME finance institutional development; 2) create SME 
business development services; and, 3) Expand SME 
association development. This program element will pay 
particular attention to expanded business and employment 
opportunities for women. 
 
¶1. Enhance Microfinance and SME Finance Institutional 
Development 
 
     -- Create and enhance institutional entities that are 
     able to offer finance to small lenders in Marib, Al- 
     Jawf, Shabwa, Amran, and Saada Governorates 
¶2. Create SME Business Development Services (BDS) 
     -- Develop access to non-financial services for micro 
     and small entrepreneurs to receive training and 
     technical assistance, technology transfer, product and 
     services marketing assistance, general management 
     assistance, and business mentoring 
 
¶3. Expand SME Association Development 
 
     -- Develop associations that integrate producers, 
     processors and vendors into a single organization 
     focused on developing different sub-sectors and 
     enhancing the prospects of economic success 
 
Expected Results: 
 
     -- SME finance providers developed and offering 
     services in the five target governorates 
     -- SME finance providers reach sustainability (meeting 
     100% of their operational and financial costs) and 
     offer services to capable SMEs 
     -- Technical assistance and training programs for SMEs 
     developed 
     -- Business development services available for specific 
     SME sectors, such as agriculture, food processing, 
     transport, handicraft and tourism, mining, and light 
     manufacturing 
     -- Increase in business linkages between SMEs and 
     economic drivers 
     -- Associations developed, coordinating and networking 
     -- New business opportunities identified 
     -- Increase in income and employment generating- 
     activities 
 
¶3. Enhancing Policy Reform and Program Development 
 
Problem: Economic development in Yemen is constrained by 
limited institutional support by the ROYG and the private 
sector. 
 
MEPI Strategy: 
 
To enhance the Republic of Yemen's policy reform and program 
development, Embassy Sanaa will seek funding to: 
 
     -- Expand and improve the higher education and research 
     institute systems' to support economic growth in trade, 
     investment and SMEs 
     -- Expand the ability of the ROYG Ministry of Industry 
     and Trade to produce and share business abstracts and 
     reports 
     -- Develop comprehensive district and governorate 
     economic and development growth plans 
     -- Establish economic development offices and/or 
     authorities at the local level 
     -- Expand business education and training in high 
     schools, community colleges and universities 
     -- Establish public/private sector fora to identify 
     obstacles to expanded business and employment 
     opportunities 
 
Expected Results: 
 
     -- Increased access to information 
     -- Improved laws, regulations and policies 
     -- Economic growth integrated into local level planning 
     -- Increased numbers of Yemenis with business-related 
     skills 
     -- Improved partnerships between the public and private 
     sector 
 
     (END TEXT OF MEPI STRATEGY)