April 28, 2014 / 5:05 PM / 5 years ago

Donor funds hampered by Yemen political turmoil, insecurity: official

SANAA (Reuters) - Political turmoil is preventing Yemen and donor countries from channeling billions of dollars in foreign aid intended to rebuild the impoverished Arab country, a Yemeni official said on Monday.

Amat al-Alim Alsoswa, managing director of a government body set up last year to help Yemen absorb some $8 billion in pledged assistance, also told Reuters that Yemen was in dire need of reforms to ensure the country can meet its financial obligations.

Only a small amount of the funds, meant to be used for major infrastructure projects like building roads, power stations or health facilities, have been delivered to Yemen, where attacks by al Qaeda militants or armed tribesmen make it hard for any work to commence.

“Due to the political changes which the government suffered from, and which also affected the performance of donor countries since the 2011 revolution, all of that resulted in a slowing down of the implementation of the pledges,” Soswa, a former assistant secretary general of the United Nations, told Reuters in an interview ahead of a donors’ meeting in London on Tuesday.

“But since 2012, and after the so-called mutual accountability framework accord went into effect, it was announced that the focus must be on major projects, which both the Yemeni government and the donors acknowledge cannot be implemented due to these political and security reasons,” she said.

Stability in Yemen, which shares a long border with the world’s top oil exporter Saudi Arabia, is an international concern.

Yemen’s economy nearly collapsed during the year-long revolt that toppled ruler Ali Abdullah Saleh in 2012. Mass protests against his rule brought the country to a standstill, tipping it into lawlessness that saw al Qaeda militants seize and occupy entire towns for several months.

The country of 25 million is also grappling with a challenge by southern separatists seeking to restore the Marxist state that merged with North Yemen in 1990 and a sectarian struggle in the north between Shi’ite Muslim rebels and Sunni Muslim rivals.

The Friends of Yemen group, which consists of Western powers and Gulf Arab states, pledged around $7.9 billion in aid in 2012, but most of the funds have been delayed because of technical issues and lagging approvals by donor heads of state, a Yemeni government minister previously told Reuters.

The Arabian Peninsula state has also yet to receive $3 billion promised by donors in 2006.

This aid has been delayed due to disagreements over which projects should receive funding and because some Gulf states were holding money back for political reasons, according to Yemeni officials.

Donor countries also asked that Yemen set up a body to coordinate between them and Yemen to facilitate the transfer of funds, which was established late last year.

Soswa, who was appointed to head the newly created Executive Bureau this month, also said that Yemen needed to work on reforming all aspects of its finances, including fiscal management, the civil service and fighting corruption.

“Without reforming the financial situation, the state budget cannot cope with its commitments, even salaries of civil servants or military personnel,” she said.

Reporting by Mohammed Ghobari, writing by Sami Aboudi; Editing by William Maclean and Susan Fenton

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