Yemen’s Interim Government: Now What?

Published on 10 May 2012 in Report: Yemen Times
Sama’a Al-Hamdani (author)

In February 2012, Yemen held presidential elections with Abdu Rabuh Mansour Hadi as the sole candidate. The aim of post-revolution Yemen is to be more democratic after being ruled by the same man for the past 33 years. Thus, the new system must be inclusive and engage seriously in negotiations with a broad set of stakeholders. 

Furthermore, the new government must remain committed to the understanding that it is a government by the people, and for the people. Hadi’s elections have been followed by some gradual s reforms; the new cabinet, known as the unity government, includes members from various political parties and the former president’s allies in the military are slowly being replaced. 

Unfortunately, every day brings news about how unstable the situation in Yemen is.  So far, the country has proved tenacious against all odds—but how long can it last if the situation persists as it is?

The current interim government is considered to be in the first phase of three phases of post conflict governance to be undertaken. In most transitional governments, this period is usually about three years long, however Hadi is slated to step down in February of 2014. Overall, the interim government will need about 10 years for full recovery. 

This first phase is considered the most crucial because it is a period of stabilization where social inclusion and capacity development need to be established in order to avoid a relapse into instability or, worse, full-fledged war. 

In Yemen’s case, the government will need to measure its needs carefully in order to determine how best to proceed. So far, many people are criticizing the new government as ineffective; however, Hadi and his government are contending with formidable challenges and have thus far held the country from falling into state failure. 

The biggest political challenge of this interim government is gaining legitimacy, and the longer the country is at a standstill, the less trust there is. Politically, the country has its hands full with constitutional reforms, inter-party cooperation and anti-corruption efforts. The government must also face the reality of near-constant intrusions of spoilers in the South as well as loyalists of the former government found all over the country

No development without security

First and foremost, security is paramount as it is the foundation of the other two facets mentioned earlier. A Yemeni government official once said, “You cannot provide development without security and you cannot provide security without development.” Without security, the nation will continue to be unstable and donors will be afraid to invest their wealth in the country. 

From a positive perspective, enhanced security would not only help Yemen attract foreign capital, it would also bring about a reduction in the flight of Yemeni capital.

Yet, in order for change to be realized in the long run, the people of Yemen need to stop being “leader-centric,” with people supporting personalities rather than political programs, so the country can avoid repeating the dilemma of its recent decades.

Moreover, civil society can play a major role in overcoming dictatorship as it fills the gap left by the lack of a strong government. In Yemen, as in all other countries, civil society is heterogeneous, with any group that is not a state actor able to participate. While these groups can work on rule of law, justice, civic education and promotion of democratic values, they can also act as covers for politicians without a party, or can be hijacked by the elite in efforts to gain monetary support. Therefore, it is ideal for the populace of Yemen to rely on the current interim government.

Civil Society involvement

Having said that, the government must practice a good deal of self-reflection in this process because this interim period will function as Yemen’s new foundation. Also, the government must not amplify the pressure placed on the country by international actors who are impatient and do not fully trust the current process. Administratively, the country must seek sovereignty, and share power based on electoral results. Definitively, the country should never settle for “good-enough” governance where functionality is back to normal but not improved. The new government will continue to be limited by its tribal and traditional practices as well as economic conditions, but the trick lies in working inside the box in order to build outside of it.

The international community seems not completely convinced of the stability of the current government although they publicly support it. For example, during the revolution US foreign aid was decreased from $134 million to $64 million. Hadi’s policy must decide which is more important: gaining domestic or international legitimacy? If things go as planned, in the long run, both objectives will be realized, but for now there is a need for a strategic approach.

Economic revival

Economic reconstruction that is felt by Yemenis on the ground is the best immediate way forward. Yemen’s economy is no longer determined by the usual laws of supply and demand. It is rather determined by a monopoly of the revolution. The people of Yemen will not support the country knowing that the current policies are designed for the servitude of the people since 2 percent of Yemen’s population holds 80 percent of the wealth. 

For starters, economic reconstruction can mean many different things to different people, but in Yemen’s case, it must not resemble a “face-lift” — it requires a complete overhaul. Rebuilding Yemen’s economy as it was before would be hazardous because the previous system was not stable. Reconstructing the economy in the 21st century and especially in 2012 is very different than doing it in 1998. 

Just last January, the Ministry of Planning and International Cooperation declared that the country will need approximately $15 billion to stabilize.

Inclusiveness

Policies regarding the economy need to memorialize a compromise; meaning that they need to gain the acceptance of all parties involved. Furthermore, Yemen’s instability is at risk of intra-state conflict rather than interstate. Many of the previous economic reconstruction policies focus on the latter. 

Furthermore, in today’s globalized world, non-state actors play a major role in development. Therefore, the country must map out an accurate and in-depth economic analysis of the conditions since the start of the revolution in order to determine the exact needs of the country. For example, only one in ten Yemenis describe local economic conditions as good, while 42 percent said that they experienced extreme difficulty buying food for their families. 

The new government working together will determine Yemen’s future, and while this trust is placed on everyone, extra efforts will be placed on the shoulders of Murshed Al-’Arashani (Minister of Justice), Mohamed Al-Saadi (Minister of Planning and International Cooperation), Sakhr Al-Wajeeh (Minister of Finance), Amat Razaq Humad (Minister of Social Affairs and Labor), and Sa’ad Aldin Ben Talib (Minister of Trade and Industry) for immediate recovery. 

These Ministers must take Yemen through the first steps of reform. As a matter of priority, these institutions must promote accountability and transferability. Without functioning courts, nothing else can function. The country must develop a strong and independent judiciary. The people and the government must know that there are consequences for not obeying the law.

Institutionalization

While most economists emphasize the role of the private sector, efforts at present must focus on building public sector institutions, as they are considered investments in Yemen’s future rather than expenditures. Many villages in Yemen do not have access to clean water, hospitals or electricity. Improving these areas not only improves the lives of Yemenis but it helps decrease the high and rising unemployment rates. 

If these plans are not in process within the next two years, then the people of Yemen have the right to believe that the government is useless.

At present the country’s economy is on life-support, which is not surprising given what the country has been through. For the first six months (through August 2012) the main needs of the government are to provide food, clothing, shelter, fuel and medical services to affected individuals. 

By the end of Hadi’s rule (by February 2013) the country needs to rely less on humanitarian aid and transition towards sustainable development in domestic resources. 

This vision needs to shift from the macro-level to the micro-level. With respect to the latter,   it is essential that the country does not privatize things too quickly after the revolution, as the people who have the most financial capability right now are the ones who benefited illegally from Yemen’s deteriorating conditions. Furthermore, the government must all agree on the needs of the country so that the objectives of international and national NGOs can be aligned with domestic goals.

Economic self-dependence 

Ultimately, Yemen will only be able to take responsibility for it once the economy is empowered by the domestic sector. Additionally, the country cannot survive for long if its reliance on foreign aid for humanitarian needs lasts for more than the initial period. First, the money would not be in the hands of the government, making the government less accountable and legitimate, while also risking another collapse. 

Yemen cannot control the timing at which these funds are released, the amount of aid, and the gap between pledge and delivery. Raymond Gilpin, Director of the Center for Sustainable Economies at the United States Institute for Peace explains that “the relationship between donor countries and conflict-affected countries is like a bad marriage, where both parties know that the other is cheating but no one wants a divorce.”  Also, at times when funds are released rapidly, the country’s institutions may not be able to absorb the funds or spend it prudently. It might be a better idea to use money to stabilize the currency rather than use it for expenditure.

On top of that, there needs to be a clear tax system. Of course, the people will object to this, but the people of Rwanda, to take one example, were convinced to pay taxes because they trusted the government and felt that it was their national duty to help rebuild their country.

Collecting taxes this year or the next is not an option, but a plan needs to be developed for the future. A tax administration must be carefully selected and all of the government’s institutions need to be 100 percent transparent in order for this process to be accurate. 

More importantly, the tax base needs to be broad, and the tax burden needs to be shared if it is to be sustainable. For the meantime, Yemen can increase revenues through indirect taxation. Besides, the unity government should not be afraid of deficits because, at times, a deficit is a reflection of an investment in the future.

The new country should not be afraid to engage the youth. The government should be transparent about its plans and offer the youth a chance to participate in this process. This includes listening to their ideas about innovative ways of re-building society. After all, the torch will only be passed on to them. The efforts of the unity government need to focus on goals that can be achieved in 10 to 15 years so that Yemen does not have to go through this process again while expecting different results. It is all about practicality — if Yemen doesn’t invest correctly and generously in the short term, there may be no long term.

Without the right steps forward, these people do not stand a chance alone. All Yemenis should work together to make this a best case scenario where Business Monitor International explains it as a period with “some potential for a resumption of growth in 2012. Backed up by inflows of foreign aid from the Gulf Cooperation Council and elsewhere, a new government would likely have the resources to be able to increase spending and protect the economy’s export infrastructure.”