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Cablegate: Yemen Budget Transparency for Section 7086(C)

VZCZCXYZ0000
RR RUEHWEB

DE RUEHYN #0106 0201420
ZNR UUUUU ZZH
R 201420Z JAN 10
FM AMEMBASSY SANAA
TO RUEHC/SECSTATE WASHDC 3578
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SANAA 000106

SIPDIS
SENSITIVE

DEPT FOR NEA/ARP AMACDONALD AND EEB/IFD/OMA BSAUNDERS

E.O. 12958: N/A
TAGS: EAID ECON PREL PGOV EFIN YM
SUBJECT: YEMEN BUDGET TRANSPARENCY FOR SECTION 7086(C)
COMPLIANCE

REF: A. STATE 1923
B. 09 SANAA 1528

1. (U) The ROYG is currently receiving U.S. bilateral
assistance using FY 10 funds, including development,
counterterrorism, and military assistance. The non-military
portion of the annual expenditures of the central government
is publicly available on the Ministry of Finance's website
(www.mof.gov.ye/files/budget/2010/fainalbook. pdf) and in
print through the Ministry of Finance and the Central Bank of
Yemen (CBY). Government revenues are detailed in the CBY's
annual report and are divided into oil and gas revenues and
non-oil revenues.

2. (SBU) The Parliament passed the 2010 national budget on
December 23, 2009, a copy of which the Finance Committee
Chairman provided to EconOff. The 87-page publication
includes both revenues and expenditures. As per REF A
request, there were no national events in 2009 that adversely
affected budget transparency. CBY Sub-governor Ibrahim
al-Nahari told EconOff in mid-December 2009 that the Ministry
of Finance and CBY is now providing greater detail, including
specific budget amounts for new ROYG initiatives and expenses
broken down by governorate, in the online version of the
national budget following our August 2009 demarche on
increasing fiscal transparency (REF B).

3. (SBU) It is difficult to assess fully the accuracy of ROYG
reports on government revenues and expenditures, due to a
lack of independent analytical organizations and the absence
of any freedom of information laws. The lack of
record-keeping among many Yemeni businesses, coupled with
widespread corruption in the oil sector and the Tax and
Customs Authorities, makes accurate budget information hard
to come by for the government itself. World Bank
representatives in Yemen tell us that different ROYG
ministries and organizations publish widely varying budget
figures and there is no information on how data, especially
revenue figures, is derived.

COMMENT
-------

4. (SBU) Post believes that Yemen is in compliance with
Section 7086(c)(1) of the Department of State Foreign
Operations and Related Programs Appropriations Act (SFOAA),
but would benefit greatly from capacity-building assistance
targeting the Central Statistical Organization (CSO), the Tax
Authority, and the Ministry of Finance. Training ROYG
accountants, statisticians, and economists in best practices
would go a long way in improving survey methods, budget
analysis, and transparency. End Comment.
SECHE

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