The Minefield of Combating Corruption in Yemen

The Sana’a Center Editorial

Among the less prominent, but no less crucial, aspects of the Riyadh Agreement, signed November 5 by Yemen’s internationally recognized government and the Southern Transitional Council (STC), are its commitments to combating corruption. Many in Aden and across the south blame the lack of public services and constant electricity blackouts there on crooked government practices. Raging against such garnered the STC popular support in its rivalry against the Yemeni government, and helped fuel southern aspirations to secede from the rest of Yemen. 

The Riyadh Agreement – brokered by Saudi Arabia to incorporate the STC within the Yemeni government, military and security forces – explicitly states that all public spending should be subject to parliamentary oversight and that the Supreme National Anti-Corruption Commission, the Central Organization for Control and Auditing, and the Supreme Economic Council will be reformed, restaffed and re-empowered. In the absence of these entities during the conflict, corruption cases have gone directly to the president’s office – effectively facilitating, rather than mitigating, the problem. Yemeni Prime Minister Maeen Abdelmalek recently has been using this anti-corruption mandate to take aim specifically at graft surrounding fuel imports into southern Yemen – one of the largest expenses on the government’s books – and the results of his efforts will likely be a harbinger for the success of any further reform efforts. 

Currently, fuel imports in the south are essentially the purview of one man, Ahmed al-Essi, a business tycoon and close confidant to Yemeni President Abdo Rabbu Mansour Hadi, and the most likely spoiler of Abdelmalek’s plans. Al-Essi has associated himself with Hadi since the latter was defense minister in the mid-1990s. When Hadi assumed the presidency in 2012, Al-Essi became one of his economic advisors. In February 2015, when Hadi fled from the Houthis in Sana’a for the safety of Aden, Al-Essi provided the cash-strapped president a financial cushion to land on. In April 2016, when Hadi suddenly fired Khaled Bahah as prime minister and an angry Riyadh retaliated by suspending its financial support for Hadi, Al-Essi again stepped in with cash to keep the president afloat. Today, Al-Essi is officially Hadi’s deputy director of the Presidential Office for Economic Affairs.    

Al-Essi’s business empire is vast and opaque. He faced accusations of smuggling oil in East Africa in the late 1990s, while during the ongoing Yemeni conflict he has run logistics contracting for coalition-led forces in Yemen and partnered with Hadi’s son Jalal to establish Queen Bilqis Airways. He’s even the president of the Yemen Football Association. Perhaps most importantly, however, Al-Essi is the owner and chairman of the Alessi Group conglomerate, part of which is the Overseas Shipping and Stevedoring Company which specializes in marine transport of fuel and oil.  

In 2015, when the Yemeni government was struggling to secure fuel imports for southern Yemen, Al-Essi arranged for deliveries – on credit – to the Aden Refinery Company (ARC), the only authorized fuel import entity in Aden. Today the outstanding debt to Al-Essi remains in the range of US$200 million. Al-Essi also appears to hold sway over figures within ARC, which has helped him dominate fuel imports to southern Yemen. An example of how this has worked came in August this year when the ARC issued a tender for fuel imports – the tender was not made public and though three companies applied, all were owned by Al-Essi. His monopoly also allows him to charge well above market rates for the fuel, according to senior government officials who spoke with the Sana’a Center.

The prime minister, Abdelmalek, has recently been signaling that he intends to make future fuel import tenders for Aden public and allow real competition in how they are awarded. This would constitute a direct threat to Al-Essi’s income and he has threatened retaliation, according to senior government officials who spoke with the Sana’a Center, including disrupting fuel imports to southern Yemen to spur public protests against the government. His close connection with Hadi and the president’s inner circle also places him in a strong position to lobby for the prime minister’s replacement when the government and STC finally agree on a new cabinet. Working against Abdelmalek is that he is a technocrat with little political backing to protect his position. Whether he remains prime minister in the cabinet-to-be could signal whether the Yemeni government is turning over a new leaf of transparency, or continuing to carry on with the dirty-business-as-usual.

 


This editorial appeared in Negotiation and Deescalation – The Yemen Review, November 2019.

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