Yemen: Learning From Past Mistakes

Since the signing of the GCC supported agreement that ended the political crisis in 2011, Yemen embarked on a political transition that was applauded by many of the regional and international powers. Above all, it saved Yemen from a terrible civil war. The transition included the resignation of the former President Saleh, the formation of a national reconciliation government, election of the Vice President as the new head of the state, and the undertaking of a comprehensive national dialogue to discuss and agree on a political road map to resolve Yemen’s long term political problems.

The National Dialogue was concluded successfully in January 2014. The spirit of the nation was high. Yemenis had chosen the path of dialogue over violence, a model few others in the Arab World have managed to adopt.   The National Dialogue included the different colors of the political spectrum: the youth, women, academia, and civil society.

What happened in Sana’a over the last few weeks surprised everyone, even those who keep a close eye on the political landscape. I will not comment on the underlying political reasons or implications of recent events. Rather, I would like to address the economic factors that in part led to them and what the new government should do to increase the likelihood of its success and keep the transition on track.

For more than a year now, I have repeatedly said that the success of the political transition in Yemen will be judged by ordinary people in the streets and not in the Movenpick Hotel or the corridors of the presidential palace. People want a government that is responsive to their needs, a cleaner government that is free of corruption, and a government that delivers improved services, creates jobs and improves living conditions. I have also said on several occasions that the government should do more to fight corruption.  Increasingly, the general public perception in Yemen is that corruption under the outgoing transition government was not much different than that of the former Saleh Regime.  The government faced serious fiscal challenges resulting mainly from the frequent attacks on the oil and gas pipeline, which undermined the main source of government exports and the hard currency it earned. As a result, the government faced two very difficult choices: one was to reform the subsidy regime on diesel and gasoline and the other to allow the devaluation of the currency. Most economists, including us, advised the government to implement the first option as the consequences of the second option would be much worse on the economy and the people of Yemen. The government took the big decision to fully liberalize fuel prices, but, failed on several fronts: firstly, the government should have done this in the context of a broader reform program that includes fighting corruption, elimination of double dippers and ghost workers from civil service and military, and reforming various sectors in the economy to generate some savings to accompany the subsidy reform. Secondly, senior government officials should have explained the rationale for the fuel subsidy reform to the people, the challenges the government was facing,  the options they had before them, and their reasons for choosing to lift subsidies. Thirdly, the government should’ve directed part of the savings from lifting subsidies to help the poorest of the poor who are most affected by the increased fuel prices.

The events of the last few weeks have brought Yemen to a significant crossroads: one direction could lead to a corrective revolution to achieve the main goals of the youth revolution of 2011, which the unity government failed to deliver; and the other direction could lead to a serious, protracted and devastating civil war.  

While everyone is concerned and unclear about the future of Yemen, I’m one of those few who are still optimistic… I believe and trust in the wisdom of the Yemeni people: “ Al Hikma Al Yamania”. On many occasions, the Yemenis have surprised everyone and stepped back from the brink of an all-out civil war.

We see what is happening around us in the region. Wars are raging in many of our beloved Arab World countries, resulting in so many deaths and injuries, millions homeless, and the emergence of radical groups. Although, on a positive note, the monopoly on political power has ended. No one will be able to exercise unchallenged and complete control of society and the institutions of the state. The genie is out of the box, as the old cliché goes, and no one will be able to put it back. Political pluralism that draws on the region’s diversity and vast potential is the only way forward for the region. Yemen has an opportunity to show that it is different and once again succeed in the face of enormous challenges. It can draw on the creativity and energy of young and educated population.
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As for the new Yemeni government, they should learn from past mistakes. Here are some suggestions for the next phase that could increase the likelihood of success (or reduce the chances of failure).

1. The new government should be given the freedom to distance itself from all political parties and act as one team focusing solely on the interests of the nation.
2. The cabinet should focus on developing and implementing a comprehensive economic reform program to improve government services, improve security, create jobs and fight corruption. The parameters of these reforms are included in the Economic Transition Plan and the Mutual Accountability Framework (MAF) that were developed at the beginning of the transition, but, unfortunately, the bulk of which were never implemented..
3. The new government needs to re-program pledges to accelerate the flow of aid and implementation of donor-funded projects. This includes the –re-programming of funds attached to  some of the mega projects that are not expected to start in the coming two years, to fast disbursing programs such as the Social Fund for Development and the Public Works Project. These programs will deliver thousands of badly needed projects to remote and deprived communities all over the country. This will improve services, generate jobs and provide new hope for millions of Yemenis.
4. While the national dialogue and its recommendations should be the main road map for completing the political transition, the sequencing of how the recommendations are implemented should be reconsidered. The new government should be quick to implement key aspects of the National Dialogue even before the constitution is drafted or approved.
5. The new government should transfer powers quickly to localities (i.e. to cities, districts and provinces), including the transfer of local security arrangements to local governments, including traffic police and crime control. The government should also consider local elections as the first set of elections after the constitution is approved. This will ensure that government is brought closer to the people and will anchor decentralization at the local level to ensure services are functioning during the major process of establishing the federal structure of the state.

  Clearly, a smooth and stable political process and improved security will be determining factors in the future direction of the country.. However, as the last two years have shown, these alone will not be enough... As I said earlier, the people in the streets are the ones who will judge the success of the transition, and without jobs or improved services, they will not be convinced.