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Cablegate: Transparency of Military Spending in Yemen

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

UNCLAS SANAA 002940

SIPDIS

SENSITIVE

PLEASE PASS TO TREASURY OASIA/MDM JFRANCO, STATE EB/IFD/OMA
LGALLAGHER

E.O. 12958: N/A
TAGS: EFIN EAID YM
SUBJECT: TRANSPARENCY OF MILITARY SPENDING IN YEMEN

REF: STATE 239929

1. (SBU) Summary. According to the standards defined by the
1997 Omnibus Consolidated Appropriations Act, the military
budgets in Yemen is not transparent. The MOD is not
accountable to any civilian auditing authority, and has only
limited control over revenues and expenditures within
branches of its own administration. Yemen faces significant
security challenges which necessitate military spending. End
Summary.

---------------------------------------
General Overview of Auditing Procedures
---------------------------------------

2. (SBU) The Ministry of Defense presents a budget annually
to the Ministry of Finance for approval. MOF reviews the
budget, as it does for all ministries, and allocates
resources on a six-month basis. Differences arising between
ministries are resolved by the President's office. Military
expenditures are not subject to external audit. Spending in
each section of the MOD is monitored ad hoc by deputy
ministers, and monitoring and enforcement falls to military
intelligence. Ultimately, responsibility for military
spending resides with the MOD.

3. (SBU) There is no legislation or official policy
regarding audits of military expenditure. The MOD is
fiercely independent, and not subject to the same auditing
rules as other ministries. In some instances, the weak
central government is unable to monitor military spending
within its ranks, especially in remote regions, due to
limited capacity. In the case of the official budget, the
absence of an auditing process is intentional. Criticism of
MOD spending is considered crossing a political red line.

--------------------------------------------- -
On-Budget and Off-Budget Revenues and Expenses
--------------------------------------------- -

4. (SBU) Yemen's defense budget does not include all ROYG
security forces, some of which are located outside the MOD.
There are considerable off-budget military receipts, which
are not audited.

5. (SBU) Comment: The ROYG faces considerable challenges
in both development and security. There is cooperation
between government ministries and donors to prioritize
development objectives, with an understanding that security
is fundamental to success in this effort. Substantial
military investment is necessary to provide the stability
needed for broader growth. Yemen is a partner in the Global
War on Terrorism. End Comment
KRAJESKI

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