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Donors pledge $4 billion aid to Qaeda-hit Yemen

RIYADH (Reuters) - Saudi Arabia and Western and Gulf states pledged more than $4 billion in aid to Yemen at a Riyadh conference two days after more than 90 Yemeni soldiers were killed in a suicide attack, deepening concerns about al Qaeda’s presence in the country.

In a statement issued in London, seven aid agencies called for urgent food and other aid to head off a humanitarian disaster. They said almost a half of Yemen’s population did not have enough to eat

At the Riyadh conference, Saudi Arabia, the world’s top oil exporter, pledged $3.25 billion of a total $4 billion in aid.

Riyadh, which already provides oil and military aid to its impoverished neighbor, convened Western and Arab Gulf nations in a lavish new hotel hung with crystal chandeliers to see how they can help Yemen push ahead with reforms and tackle its poverty and lawlessness.

“I assert one more time our support to Yemen to back all the phases of the political initiative to help achieve security, stability and prosperity in facing the threats of extremism and terrorism,” Saudi Foreign Minister Prince Saud al-Faisal told envoys.

The donor group, which is co-chaired by Britain, was discussing political developments since President Ali Abdullah Saleh stepped down in February, ending his three-decade rule in the Arabian Peninsula state after nearly a year of mass protests.

Another meeting, specifically directed at aid pledges, will be held in Riyadh in late June, with a ministerial meeting to follow on the side-lines of the United Nations General Assembly in September.

“The future for Yemen is not about one-off donations. The future for Yemen is about the process that’s already been set in train for the transition of that country,” said British Foreign Office Minister Alistair Burt after the meeting.

Burt said Britain had pledged an additional $44 million on top of its existing aid to Yemen.

“More than $4 billion was pledged today. But the significance of today was it was important to reconfirm the support of such a large group of countries for Yemen,” Burt said.

Monday’s attack on a military parade was the latest violent incident in a country wracked by political turmoil, where the army has split into rival factions and much of the south has fallen under the control of an Islamist militia allied to al Qaeda’s local wing.

Saudi Arabia and Western countries have watched with mounting alarm as al Qaeda in the Arabian Peninsula, known as AQAP, has taken advantage of the lawlessness to set up a base capable of planning sophisticated international attacks.

“This (aid) shows the Yemeni-Saudi relationship is quite strong and Saudi Arabia is cognizant that the stability of Saudi Arabia depends on that of Yemen,” said Yemeni Foreign Minister Abubakr al-Qirbi.

In early May, Washington said Western and Arab intelligence agencies had foiled a bomb plot aimed at a passenger airplane. In October 2010, AQAP had tried to send bomb-laden parcels to the United States and in 2009, a bomber from Yemen was caught trying to ignite explosives on a U.S.-bound flight.

In London, Penny Lawrence, international director at Oxfam, said donors were being short-sighted by focusing solely on politics and security in the country.

“Failure to respond adequately to the humanitarian needs now will put more lives at risk, further entrench poverty and could undermine political transition in the country,” she said.


Wednesday’s Riyadh donor meeting was aimed at strengthening the Yemeni state and returning a semblance of economic stability to a country where 40 percent of the population lives on less than $2 a day.

Yemen’s modest oil exports that were a source of foreign exchange were hit by repeated attacks on pipelines last year. Yemen is rapidly depleting the water in its aquifers, and by some estimates the capital Sanaa may run out of water in the coming decade or sooner.

The planning and international cooperation minister told the conference his country needed an initial $2.17 billion to help stabilize the country, fight militant attacks and ease a humanitarian crisis.

It required a further $5.8 billion in future to develop the economy and national infrastructure, with $3.7 billion needed by 2014, he added.

As the meeting began, Yemeni Finance Minister Sakhr al-Wajih told reporters he would be happy if his country achieved economic growth of 1 percent in 2012, and that even this modest goal relied on foreign generosity.

Yemen is likely to run a $2.5 billion budget deficit this year, he added. But he was unable to say by how much the economy had contracted during the political turmoil of 2011.

“The (Saudi) contribution will support development projects agreed upon,” Prince Saud said, without giving details on how the money would be disbursed.

Some $3 billion of aid pledged by the Friends of Yemen group when it first met in 2006 has still not been delivered, the government said in February.

Yemen’s deputy finance minister, Jalal Yaqoub, told Reuters: “Saudi Arabia has shown great generosity... Yemen has to increase its capacity to absorb these funds efficiently. This money must be translated into projects that citizens can actually feel.”

Countries from the Gulf Cooperation Council, which includes Saudi Arabia, Kuwait, Qatar, Bahrain, the United Arab Emirates and Oman, attended the meeting, as did the United States, the European Union, France, Egypt and Russia, the International Monetary Fund and the World Bank.

In April the IMF resumed lending to Yemen, approving the payment of a $93.7 million loan to help it address a balance of payments deficit that worsened during the political turmoil.

Additional reporting by Tom Finn in Sanaa and Amena Bakr and Layla Maghrebi in Dubai; Editing by Tim Pearce