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

C O N F I D E N T I A L SECTION 01 OF 02 SANAA 000342 
 
SIPDIS 
 
E.O. 12958: DECL: 02/12/2016 
TAGS: PREL PGOV YM DOMESTIC POLITICS
SUBJECT: CABINET SHAKE-UP:  IS REAL REFORM ON ITS WAY? 
 
REF: A. SANAA 272 
 
     ¶B. SANAA 330 
     ¶C. 2001 SANAA 1919 
 
Classified By: AMBASSADOR THOMAS C. KRAJESKI, FOR REASONS 1.4 (B) AND ( 
D). 
 
 ¶1.  (C) Summary and Comment.  On February 11, President 
Saleh announced a dramatic reshuffling of his 34-member 
cabinet, including replacing the Ministers of Defense, 
Finance, Oil, and Planning.  Saleh's new cabinet, still led 
by Prime Minister Bajammal, includes 15 new ministers and two 
women.  ROYG officials said the move was in response to 
international and domestic pressure to fight corruption and 
implement real economic and political reform.  The shake-up 
also comes after the ROYG's international embarrassment over 
the escape of 23 imprisoned Al Qa'ida operatives from a 
Political Security Organization jail (ref A). 
 
¶2. (C)  Summary and Comment continued:  In a promising move 
for economic reform, Saleh replaced the notoriously corrupt 
Finance Minister and the Minister for International Planning 
and Cooperation with experienced and well-respected 
technocrats.  On the security front, Saleh expanded Interior 
Minister Rashad Alimi's duties to include the post of Deputy 
Prime Minister, but replaced Minister of Defense Abdullah Ali 
Alewa with a relatively unknown officer.  While it is too 
early to gauge the new cabinet's real impact on reform 
efforts, Saleh is clearly trying to allay donor fears and 
opposition criticism that the ROYG is not doing enough to 
combat corruption and implement economic reform.  End Summary 
and Comment. 
 
--------------------------------------------- ----------- 
Mounting Pressure from All Sides:  Donors and the HAMAS 
Effect 
--------------------------------------------- ----------- 
 
¶3.  (C) Saleh's announcement came just days after a meeting 
with ambassadors of donor countries, including the American 
Ambassador, who urged the President to take concrete and 
immediate steps to combat corruption and improve good 
governance (septel).  Without such efforts to demonstrate the 
ROYG's commitment to reform, the ambassadors warned, Saleh 
could not count on continued support from donors. 
 
¶4.  (C)  On the domestic front, opposition parties have 
become increasingly  vocal during the run-up to the September 
presidential and local council elections.  Opposition 
accusations that the ROYG has done little to combat rampant 
corruption have escalated, including the publishing of 
several newspaper reports implicating corrupt officials, 
including the Minister of Oil who lost his job in the 
reshuffle.  Opposition parliamentarians are also beginning to 
show a still relatively small but growing willingness to 
challenge presidential power (ref B).  While few believe 
Saleh will lose his re-election bid, the opposition hopes to 
make gains in local council elections.  Given HAMAS's success 
at capitalizing on popular discontent with the Palestinian 
Authority, the opposition is eager to make corruption a key 
election issue. 
 
------------------------------ 
Corruption out, Technocrats in 
------------------------------ 
 
¶5.  (C)  The biggest loser in the cabinet re-shuffle is 
Minister of Finance Salami, who has been a powerful political 
player for more than 20 years.  Salami carved out a veritable 
mini-empire by maintaining tight control on allocations to 
government agencies and local government.  In addition to 
being well-known for corruption, he also played a key role in 
blocking donor efforts to decentralize public finance and 
create a transparent budget system.  Salami's replacement is 
Dr. Seif Mahyoub Al-Asali, an economics professor at Sanaa 
University and former Deputy Minister for Revenues. 
 
¶6.  (C)  Another minister who is apparently on the outs is 
former Minister of Planning and International Cooperation 
(MOPIC) Ahmed Sofan.  MOPIC, as the main interlocutor for 
donors and international organizations and the main 
implementing agency for development projects, has come under 
heavy criticism recently for failing to maintain donor 
confidence.  A smart and congenial official, Sofan presided 
over a period during which the World Bank cut its assistance 
to Yemen by more than 30 percent, and Yemen failed to qualify 
for the Millennium Challenge Account Threshold Country 
Program -- both major blows to Yemen's development 
assistance. 
 
¶7. (C)  Sofan has been replaced by Abdulkarim Al-Arhabi, the 
outgoing Minister of Social Affairs and Labor, a position he 
held concurrently with the Executive Directorate of the 
Social Fund for Development (SFD).  As MOPIC's star has 
fallen over the past several years, SFD's has risen -- 
largely due to confidence among donors in Arhabi's relatively 
clean, accountable, no-nonsense management style.  Arhabi was 
a frequent critic of MOPIC's performance as a 
"super-ministry," particularly that ministry's practice of 
assigning development projects in a top-down manner and then 
withholding full funding from implementing agencies. 
 
 
¶8.  (C)  Perhaps the biggest winner in the re-shuffle was 
Interior Minister Alimi who was promoted to Deputy Prime 
Minister.  Alimi will also continue in his current position, 
where he has proven himself to be a capable and professional 
leader by overseeing the establishment and development of 
Yemen's most capable security forces - the Coast Guard and 
the Central Security Force's  Counter Terrorism Unit - with 
USG assistance.  Defense Minister Alewa, however, lost his 
job to a relatively unknown military officer, Staff Brigadier 
Mohammad Naser Ahmed Ali, who is expected to challenge Chief 
of Staff MG Mohammed Ali Qassimi even less than did his 
predecessor. 
 
¶9.  (C)  Foreign Minister Abubakr Qirbi kept his job and 
assumed the portfolio of expatriates, formerly held by Abdo 
Ali Qubati.  Qirbi has a reputation for being a reliable and 
reasoned, if not always effective, interlocutor. 
 
------- 
Comment 
------- 
 
¶10.  (C) Saleh's sudden cabinet re-shuffle is, at this point, 
a symbolic victory for economic reform in Yemen.  The change 
in the cabinet is not merely cosmetic -- the ROYG has shed 
itself of several of its heavyweights.  By elevating the most 
capable leaders, and by replacing the most corrupt and 
well-connected individuals with newcomers and technocrats, 
Saleh is making a statement against mounting criticism that 
the ROYG has not demonstrated the political will necessary to 
combat corruption and implement real reform.  The ROYG likely 
took the donor ambassadors' message -- and HAMAS's victory -- 
to heart and is taking real steps to improve his government's 
public image before the September elections. 
 
¶11.  (C)  Despite a clear step in the right direction, 
however, it is too early to judge what real impact the new 
cabinet will have on economic and political reform, 
especially with the powerful and corrupt Prime Minister Abdul 
Kader Bajammal retaining his post.  Post greeted the last 
major re-shuffle in April 2001 with optimism that Salami and 
Sofan would usher in a new era of economic reform -- hopes 
that were never realized (ref C).  The hope is that this new 
crop of experienced technocrats at key posts responsible for 
economic development and financial management will be more 
successful in reducing corruption and improving the lives of 
the Yemeni people.  They face a tough challenge, however, in 
the form of entrenched interests within the bureaucracy and 
private sector that are beneficiaries of the status quo. 
Sustained political will from President Saleh and support 
from the donors will be key to overcoming these obstacles in 
the critical period ahead. 
 
¶12.  (U) Post will provide a complete list of the new cabinet 
and biographies septel. 
Krajeski