How Saleh bled Yemen dry

Published — Monday 16 March 2015

On Feb. 20, the United Nations panel of experts on Yemen issued its long-awaited full report on those who obstruct the peaceful transition in Yemen; most prominently among them is former President Ali Abdullah Saleh. The report documents in detail how he sapped Yemen’s natural, commercial and financial resources and later used them after his ouster to destabilize the country in collaboration with the Houthi militias. 
The 54-page report reveals important details about Saleh that were instrumental in passing the UNSC Resolution of Nov. 7, 2014, imposing sanctions on Saleh under Chapter 7 of the UN Charter. That those sanctions were passed under Chapter 7 means that the UNSC considers his actions to be a threat to international peace and security. As such, the resolution is binding on all nations, including Yemen and the 20 nations named in the resolution where Saleh’s wealth is stashed away.
To prove the charges against Saleh, it took the panel almost a year to gather evidence of his obstruction in Yemen’s political transition and frustration of the efforts made by his successor (President Hadi) to restore peace and stability.
Politically, Saleh used his influence in the former ruling party (General People’s Congress) and its parliamentary majority to block attempts by President Hadi, who succeeded Saleh in February 2012 to pass legislation necessary to give effect to National Dialogue outcomes, including laws needed to retrieve stolen real estate and other assets taken illegally in the southern part of Yemen. He also obstructed the passage of laws related to the newly-adopted federal system and anti-corruption legislation.
Saleh then refused to surrender military camps and equipment to the new government. He encouraged his loyalists to disobey orders from the new government and instead encouraged them to cooperate with Houthi militias in conducting joint operations. He also plundered military hardware such as missiles, missile launchers and tanks and amassed them in his hometown (Sanhan).
In a purely Machiavellian manner, Saleh cooperated with two sworn enemies — Al-Qaeda and the Houthis, according to the report. Perhaps money was the most effective weapon Saleh used to sow chaos in Yemen. He accumulated between $32 and $60 billion during his 33-year-long rule, at a rate of $1and $2 billion a year. That wealth consists of real estate, gold, cash and securities, most of which is stored outside Yemen, spread among some 20 countries and hidden in different forms under different names. Some prominent businessmen helped Saleh hide and launder that ill-gotten wealth.
From interviews with Saleh and his close associates, as well as testimony from his former top officials, the panel reports many ways in which Saleh and his cronies diverted public funds that should have gone to economic and social development to their own pockets, bleeding the public treasury dry and depriving the government of funds sorely needed to care for Yemen’s impoverished population. 
Sources of Saleh’s wealth are varied, but all relate to abuse of his position as Yemen’s president during 1978-2011. He manipulated oil and gas contracts, making huge amounts of money in exchange for concessions to foreign companies. More money came from manipulating fuel subsidies, which constituted about one-fourth of Yemen’s public budget. Funds were also skimmed from foreign assistance Yemen received from friends and allies.
If the figures in the report were accurate, as they seem to be, they would make Saleh the fifth richest man in the world, after Bill Gates, Carlos Helu, Warren Buffett and Amancio Ortega.
It is especially appalling that this huge wealth was stolen from one of the poorest nations in the world. In 2013, the UN ranked Yemen 152 in per capita income, among 193 nations. That status is combined with low education and health indicators, where half of the population lives in abject poverty.
Yemen’s experience with Saleh points to the need to establish transparency and accountability mechanisms for natural resources management, where it is easy to collude with foreign companies at the nation’s expense. The Initiative for Transparency in Extractive Industries, which Yemen endorsed after it was almost too late, aims at making it difficult for such manipulations to pass.
Another lesson relates to foreign aid. “Paris Principles,” “Accra Principles”, and similar codes encourage donors to provide aid directly to recipient governments. The idea is to strengthen existing government institutions without creating alternative structures. 
Yemen’s experience calls for a different approach to foreign aid delivery: Donors should make sure that their aid reaches its intended population and contributes to the improvement of their livelihoods.

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