VZCZCXYZ0000
OO RUEHWEB

DE RUEHRH #0225/01 0551442
ZNY SSSSS ZZH
O 241442Z FEB 10
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2543
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE IMMEDIATE
RUEHRL/AMEMBASSY BERLIN IMMEDIATE 0191
RUEHLO/AMEMBASSY LONDON IMMEDIATE 2967
RUEHTC/AMEMBASSY THE HAGUE IMMEDIATE 0217

S E C R E T RIYADH 000225 
 
SIPDIS 
 
E.O. 12958: DECL: 02/28/2030 
TAGS: EAID EFIN PREL SA
SUBJECT: GCC WANTS TO FOCUS ON TECHNICAL IMPEDIMENTS TO 
YEMEN ASSISTANCE AT UPCOMING CONFERENCE 
 
REF: (A) SANAA 380 (B) KUWAIT 160 
 
Classified By: Ambassador James B. Smith, reasons 1.4 (b and d). 
 
¶1. (C) Summary: The Gulf Cooperation Council (GCC) is looking 
forward to the February 27-28 meeting on technical aspects of 
assistance to Yemen, which it hopes will identify the main 
impediments to more effective aid programs on the ground. 
This is the latest in a series of meetings the GCC has held 
with Yemen, and supports the GCC's engagement with Yemen's 
national development plan.  The GCC is concerned that Yemen 
is trying to turn a technical meeting into a more political 
meeting. The President of Yemen raised this meeting with King 
Abdullah during his February 23 audience, and subsequently 
announced it was sending a Deputy Prime Minister, which 
prompted a flurry of calls among GCC members to try to up the 
level of attendees.  The GCC would prefer that this meeting 
set up a subsequent ministerial level meeting, perhaps on the 
margins of the late March GCC-Yemen ministerial, on specific 
steps to improve disbursements.  The GCC welcomes greater 
donor involvement and coordination, which it hopes can 
address the need for greater Yemeni capacity in the Ministry 
of Planning to coordinate between line ministries and donors. 
 The GCC also hopes that the February meeting can begin to 
sketch out ways to harmonize the existing donor programs with 
the Friends of Yemen process, about which some GCC member 
states still have some concerns.  End Summary. 
 
Yemen Shines Spotlight on February Technical Meeting: 
- - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶2. (C) Dr. Abdel Aziz Aluwaisheg, Gulf Cooperation Council 
(GCC) Director General of Economic Relations, told EconCouns 
February 24 that the February 27-28 technical assistance 
meeting in Riyadh has suddenly received a lot of high level 
attention, thanks in part to Yemeni President Saleh's 
February 23 visit to Saudi Arabia (septel).  Saleh told King 
Abdullah about the meeting, and expressed Yemen's hopes that 
it would result in some specific decisions to accelerate 
funding for Yemen.  Yemen subsequently informed the GCC that 
it is expanding its delegation to 13, and has raised its 
level, with the Deputy Prime Minister now leading a group 
that will include the Minister of Finance, and 
Undersecretaries and Directors General from the Ministries of 
Planning and Economic Forecasting.  Yemen also plans on 
bringing the Executive Director of the Saada Reconstruction 
Organization, even though the GCC has already informed Yemen 
that they are unlikely to be able to accommodate a specific 
item on the already crowded agenda.  As a result of the 
Yemeni decision and the meeting with the King, Saudi FM Saud 
Al-Faisal called the GCC and asked that they request all GCC 
states upgrade their attendance; apparently, no ministers 
were available on such short notice, but a couple of Deputy 
Ministers may attend. 
 
GCC Goals for the Meeting: 
- - - - - - - - - - - - - - 
 
¶3. (C) Aluwaisheg explained that the GCC had hoped to keep 
this meeting very much at the technical level, with a focus 
on identifying the technical problems that are slowing 
disbursements.  The meeting was never intended to make 
significant policy decisions.  Rather, it was intended to 
identify a clear problem set, and perhaps some potential 
remedies, and tee up a discussion of ministers, tentatively 
envisioned to take place in March, which could usefully 
sketch out the way forward.  It will certainly feed into 
preparations for the next GCC-Yemen ministerial meeting on 
assistance, which will take place at the end of March. 
Depending on the advice of the delegates to the February 
27-28 meeting, that GCC-Yemen meeting may also include other 
donors. 
 
¶4. (C) Aluwaisheg also stressed that this is not the first 
technical meeting between GCC donors and Yemen.  They have 
been meeting for several years to discuss how best to design 
and implement the GCC member assistance programs.  Aluwaisheg 
said the GCC had hoped that this session would be primarily a 
brainstorming session to forge consensus on what the main 
impediments are to higher disbursements and more effective 
programs. The meeting is also interested in developing more 
effective tools to measure progress in Yemen, following up on 
discussions in London in January. 
 
Deconflicting with Friends of Yemen: 
- - - - - - - - - - - - - - - - - - - 
 
¶5. (C) This GCC meeting will also provide a useful forum to 
discuss how best to merge the pre-existing bilateral aid 
 
programs, like those of the GCC, with the Friends of Yemen 
(FOY) process, which Aluwaisheg said most GCC countries 
regard as primarily political.  Aluwaisheg personally hoped 
that the FOY process could help provide greater political 
will to address the problems that have slowed disbursements, 
both on the Yemeni and on the GCC members' sides. 
 
¶6. (S) There are some sensitivities within GCC member states 
about the FOY process.  Oman objected to GCC officials 
earlier in February to the characterization of Yemen as a 
failed state.  Oman also reportedly cited concerns that the 
west, particularly the U.S., may seek to use the FOY process 
to highlight concerns about Iranian involvement in Yemen, 
which may raise regional tensions further.  Separately, the 
Kuwaiti, Abu Dhabi and Saudi Development Funds have all 
disagreed with GCC suggestions to accelerate disbursements, 
citing concerns about lack of Yemeni priorities, ability to 
execute programs and corruption. 
 
GCC Suggestions for Ways Forward: 
- - - - - - - - - - - - - - - - - 
 
¶7. (C) Aluwaisheg said that the GCC feels a little bit caught 
in the middle, as it believes it is important to use the 
upcoming meeting to focus on key impediments to improve 
specific conditions on the ground in Yemen.  The GCC is 
frustrated with lack of Yemeni progress on a number of 
fronts, but also believes that Yemen has made some progress, 
and is convinced that waiting until the government has proven 
its ability to solve major issues will allow problems to 
mushroom. 
 
¶8. (C) Aluwaisheg identified the lack of capacity of the 
Yemeni Ministry of Planning to coordinate donor programs with 
ministry efforts as the single biggest problem.  He 
characterized the Ministry of Planning as the "gateway" to 
all aid in Yemen.  He noted that the EU has funded between 10 
and 15 coordination staff for its $750 million program in 
Yemen; as a result, EU donors have better contact with line 
ministries and have made greater progress in disbursing 
assistance.  By contrast, Yemen has assigned only one 
official to coordinate the $3.7 billion in combined GCC 
programs.  As a result, GCC donors cannot even get reports on 
time, let alone undertake the coordination they need with 
line ministries.  Aluwaisheg believes that outside funding of 
a few more technical experts in the ministry of planning 
would significantly improve the effectiveness of programs in 
Yemen. He suggested it would make a lot more sense to 
organize experts thematically, rather than segregate them by 
donor.  He invited the U.S. to consider funding this kind of 
program as a key gap between existing donor programs.  In a 
similar vein, Aluwaisheg said that it would be useful to have 
greater leadership among the donors, particularly on the 
ground, which would help make sure that implementation of 
programs took place, and could offer a way to integrate the 
FOY process with donor programs.  He said that UN and World 
Bank efforts to promote greater integration have not been as 
successful as the GCC had hoped. 
 
Labor a Non-Starter: 
- - - - - - - - - - 
 
¶9. (C) Aluwaisheg said that Yemen was likely to suggest at 
the February 27-28 meeting that the GCC states allow more 
Yemeni expat laborers to enter their markets.  Aluwaisheg 
said that the GCC has been working with Yemen on this issue 
for at least two years.  The problem is that GCC labor 
markets are already open to Yemeni laborers.  Aluwaisheg said 
that the Yemeni request effectively translates into an appeal 
to direct GCC employers to hire Yemenis at the expense of 
other nationalities.  Given that most GCC states have not 
succeeded with similar programs over the last decades to 
convince local employers to hire GCC nationals, he doubted 
that any such directive would be effective in the case of 
Yemen.  He also said it was totally impractical to ask GCC 
states to consider letting in Yemenis without visas, given 
abundant recent security concerns.  Aluwaisheg noted that 
Yemen had pushed this issue hard in 2007-8, and had raised it 
at the June 2009 ministerial meeting, after which it was 
referred to the GCC Labor Council (of which Yemen is a 
member).  Yemen has apparently not pursued the issue in that 
forum. 
 
¶10. (C) The GCC has tried proactively to increase the skills 
of Yemenis to make them more competitive both at home and 
abroad by promoting technical schools and education.  GCC 
member states have built several dozen schools already, and 
have coordinated with the UK and the Netherlands to solicit 
support for operating costs.  The GCC is also trying to help 
 
Yemen address a serious identity problem, which would improve 
the ability to legitimate Yemeni workers to get jobs abroad, 
by setting up a central Yemeni database (the UAE has already 
contributed $63 million to set up this center).  Aluwaisheg 
said that this might be an area where a relatively new donor, 
such as the U.S., might help coordinate existing programs 
and/or fill in gaps.  Aluwaisheg concluded by recognizing 
that finding jobs for Yemenis is a serious issue, but 
expressing considerable frustration that the Yemeni 
Government is not doing more to work with donors to address 
the underlying problems.  He expects Yemen will raise this 
issue again at the upcoming meeting, which will only 
frustrate GCC member state delegations.  Aluwaisheg said it 
would be very unhelpful for foreign delegations to suggest 
greater GCC flexibility for Yemeni expats, particularly given 
recent increased restrictions on travelers from the Arabian 
Peninsula to Europe and the U.S. (apparently, the EU 
suggested they considered raising this on behalf of Yemen, 
but decided against it after learning more of the background). 
 
Comment: 
- - - - - 
 
¶11. (C) The GCC is very pleased that U.S. experts on Yemen 
assistance will attend the meeting.  They welcome the 
tangible sign of interest in coordinating to support 
assistance in Yemen.  They also believe that the U.S. has a 
unique ability to plug some existing holes in donor programs, 
such as offering to improve the capacity of the Ministry of 
Planning.  Perhaps more importantly, GCC officials also 
believe that U.S. participation in this meeting will help 
persuade other donors to improve coordination.  In that 
regard, the apparent attempt by Saleh to increase the profile 
of this upcoming technical meeting may backfire to the extent 
that it may convince some important decision makers in GCC 
member states that Yemen is trying to embarrass them into 
cutting bigger checks without resolving underlying capacity 
issues. 
 
SMITH