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Cablegate: Aden Showing Signs of Life

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

UNCLAS SECTION 01 OF 02 SANAA 001959

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON ETRD PGOV YM ECON COM DEMOCRATIC REFORM
SUBJECT: ADEN SHOWING SIGNS OF LIFE

1. (SBU) Summary/Comment: On an 8/4-8/6 introductory visit to
Aden, CDA met Deputy Governor Shaif, representatives of
political parties, businessmen, security and Coast Guard
officials and members of civil society. The recent firing of
a corrupt official running the Aden Free Zone, some increase
in transshipment rates through the Free Port, and new
investment opportunities bring renewed hope for Aden's
future. However, expats and local businessmen expressed
continued frustration over corruption and bureaucratic delays
at the Free Zone and Port. Opposition party representatives
underscored downward trends in democratic development and
press freedom, but noted clear improvements in Aden's
infrastructure and economic development. The ROYG's new
attention to long-standing management issues at the Aden Free
Zone and Free Port indicate that the ROYG may now be taking
Aden's significance to continued long-term economic stability
seriously. A visit to the independent daily "al-Ayyam"
provided an opportunity to reinforce Mission message on USG
policy goals in Yemen. End summary/comment.

-----------------------------------------
Aden: Still Recovering from 1994 Civil War
-----------------------------------------

2. (U) On 8/4 Deputy Governor of Aden and General People's
Congress Party Chairman Abdulkarim Shaif described to CDA
Aden's infrastructure development projects, including
improvements to roads, electricity and telecommunication
networks. Rebuilding after the 1994 civil war, Shaif said,
was a great challenge and the local government is working to
alleviate several remaining problems, including the issue of
19,000 families living in nationalized houses whose owners
want to return.

--------------------------------------------- --
New Management for Aden Free Zone and Free Port
--------------------------------------------- --

3. (U) After the 2002 attack on the French tanker Limburg,
shipping traffic through the Aden Free Port decreased by 75%
to roughly 12,000 Twenty-foot Equivalent Units (TEUs) per
month as a result of a 300% increase in insurance rates for
transshipment. In June 2003, the ROYG struck a deal to
reduce insurance prices and shipping is slowly returning to
Aden. Today, an estimated 24,000 TEUs per month pass through
the Aden Free Port, roughly 35% of the pre-Limburg rate of
60,000 TEUs per month. In early 2004, the ROYG bought out
the Singapore operator of the Free Port and separated the
management of the Free Port from the Free Zone. A Dutch
company, under contract by the ROYG, will soon be issuing an
international tender for the running of the port.

4. (U) Shaif referred to the 7/20 firing of the notoriously
corrupt former Director of the Aden Free Zone General Dirham
Noman as a positive step and explained that Governor Shu'aibi
is now temporarily in charge of the Free Zone. Shaif
continued that the Port faced stiff competition from Dubai
and Oman, but was confident that Aden's prime location would
soon win back companies and trade would expand. Shuaibi is
presently writing a report on the Free Zone's future and will
submit his recommendation to the Prime Minister and
President.

5. (U) General Manager of Aden International Marine
Corporation Mohammed Assara, who operates a factory in the
Aden Free Zone, said the Free Zone "is not what was
expected." Assara added that he now employs only 180
persons, but had originally planned for 500. Complaining
that there was no central customs organization for the Free
Zone, Assara said he continuously looses 3-5 days in his
shipping time working through needless bureaucratic hassles.
While several Yemeni businessmen and members of civil society
expressed optimism over the changes to the Free Port and Free
Zone, expats were adopting a "wait and see attitude." A PSI
Shipping Agent told Pol/Econoff that while shipping rates
seem to be higher, he expects them to drop significantly next
month. He was pessimistic that management changes at the Free
Port and Free Zone would alleviate long-standing problems.

-------------------------------------
Mixed Reviews on Democratic Progress;
NGOs Seek Enhanced USG Support
-------------------------------------

6. (U) Islah Political Party Deputy Chairman Dr. Jamal
al-Lawzi and Yemen Socialist Party Chief Ali Munnasar
expressed concern over what they viewed as a downward trend
in democratic development in Yemen. Noting that the joint
working party between Islah and the Socialist was "a work in
progress," both pointed to what they viewed as an increased
concentration of power by the GPC. Pointing to GPC
interference with counting procedures during the 2003
parliamentary elections, Lawzi and Munnassar saw the GPC as
the main source of corruption in Yemen. In a separate
meeting with Aden based NGOs, representatives described
their agendas to CDA, including poverty alleviation and
empowerment of women. CDA expressed willingness to work with
members of civil society to encourage reforms and encouraged
NGO leaders to form internal and regional networks in order
to make better use of capacity-building training programs.

--------------------------------------------- ---------
Al-Ayyam Editor Concerned over Shrinking Press Freedom
--------------------------------------------- ---------

7. (U) On 8/6 Basha Basharheel, editor-in-chief of Aden based
al-Ayyam newspaper, interviewed CDA on a wide range of
bilateral and regional subjects. The interview allowed CDA
to reinforce Mission message on political and economic
reforms as well as on U.S.- Iraq policy. In an earlier
conversation, Basharheel said press freedom is "shrinking
considerably" and that self-censorship is practiced daily in
editorial meetings. In some cases, Basharheel added,
Al-Ayyam has received a call from the President's office
informing al-Ayyam that it is unacceptable to report on an
issue, as in the case of the al-Honeish islands dispute.
Other matters, such as Ali Muhsen Al-Ahmar's and Zindani's
roles in cultivating religious extremism prior to the 1994
civil war, Basharheel said, are simply understood as off
limits. Turning to Aden's overall development, Basharheel
observed that many people have lost confidence in local
councils because there is no visible accomplishment.
However, Basharheel affirmed that Governor Shu'aibi is making
progress in Aden and that his efforts to build infrastructure
were widely praised.
KHOURY

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