[Senate Prints 111-38]
[From the U.S. Government Publishing Office]
111th Congress } { S. Prt.
1st Session } COMMITTEE PRINT { 111-38 _______________________________________________________________________
FOLLOWING THE MONEY
IN YEMEN AND LEBANON:
MAXIMIZING THE EFFECTIVENESS
OF U.S. SECURITY ASSISTANCE
AND INTERNATIONAL FINANCIAL
INSTITUTION LENDING
__________
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
One Hundred Eleventh Congress
First Session
January 5, 2010
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Washington, DC 20402-0001
COMMITTEE ON FOREIGN RELATIONS
JOHN F. KERRY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut RICHARD G. LUGAR, Indiana
RUSSELL D. FEINGOLD, Wisconsin BOB CORKER, Tennessee
BARBARA BOXER, California JOHNNY ISAKSON, Georgia
ROBERT MENENDEZ, New Jersey JAMES E. RISCH, Idaho
BENJAMIN L. CARDIN, Maryland JIM DeMINT, South Carolina
ROBERT P. CASEY, Jr., Pennsylvania JOHN BARRASSO, Wyoming
JIM WEBB, Virginia ROGER F. WICKER, Mississippi
JEANNE SHAHEEN, New Hampshire JAMES M. INHOFE, Oklahoma
EDWARD E. KAUFMAN, Delaware
KIRSTEN E. GILLIBRAND, New York
David McKean, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director
(ii)
C O N T E N T S
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Page
Letter of Transmittal............................................ v
Executive Summary................................................ 1
Introduction..................................................... 5
Yemen............................................................ 5
Background................................................... 5
U.S. Security Assistance to Yemen............................ 7
IFI Lending.................................................. 15
Lebanon.......................................................... 18
Background................................................... 18
Red Flags.................................................... 19
U.S. Security Assistance to Lebanon.......................... 20
IFI Lending.................................................. 26
Appendixes
Appendix I.--Interlocutors in Yemen.............................. 29
Appendix II.--Interlocutors in Lebanon........................... 30
Appendix III.--Acronyms.......................................... 31
(iii)
LETTER OF TRANSMITTAL
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United States Senate,
Committee on Foreign Relations,
Washington, DC, January 5, 2010.
Dear colleague: In the Fall of 2009, I directed my Senior
Professional Staff Member for the Middle East, Dorothy Shea, to
visit Yemen and Lebanon to gather information for two
forthcoming committee reports. The first concerns security
assistance, and is in follow up to the committee's 2006 report,
``Embassies as Command Posts in the Anti-Terror Campaign.'' \1\
The second report is the last in a series my staff have
produced on lending by International Financial Institutions
(IFIs). Although the circumstances facing Yemen and Lebanon
differ greatly, I selected these two countries because they
have both been major recipients of U.S. security assistance,
particularly under Section 1206 of the National Defense
Authorization Act. In addition, while both countries have
received substantial IFI lending, significant structural
reforms are urgently needed to tackle long-term development
challenges.
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\1\ The report can be found on the Government Printing Office's
web-site--http://www.gpo.gov/fdsys/search/home.action insert "S. Prt.
109-52" in the search line.
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The stakes in both countries are quite high. As this report
was going to press, we learned about the magnitude of the
threat posed by al-Qaeda in Yemen: on December 25, 2009, Umar
Farouk Abdulmutallab, a Nigerian national who is believed to
have received training, indoctrination, and explosives in
Yemen, attempted to blow up a Detroit-bound Northwest Airlines
flight. On January 3, 2010, the U.S. and British Embassies in
Sanaa, followed by several other Western embassies, temporarily
closed due to credible threats of planned suicide attacks by
al-Qaeda operatives. Separately, Anwar al-Awlaqi, the Yemeni-
American radical cleric, has been linked to numerous terrorism
suspects, including Nidal Malik Hasan, charged with the
November 2009 Fort Hood massacre. Many analysts assess that al-
Qaeda in the Arabian Peninsula has taken advantage of the
Yemeni government's preoccupation with an insurgency in the
north and a secessionist movement in the south to exploit the
country's large swaths of ungoverned spaces in an effort to
consolidate and build capacity to launch terrorist operations.
In addition to its multiple security challenges, Yemen,
already the poorest country in the Arab world, faces daunting
socio-economic crises, such as the depletion of its oil and
water resources. The literacy rate is a little over 50 percent
and unemployment was last estimated at 35 percent. Yemen's
security and socio-economic challenges are inter-related, a
reality that U.S. assistance programs must address urgently,
creatively, and with unity of effort within the U.S. government
and with like-minded donors.
Lebanon, meanwhile, is still recovering from the 2006 war
between Israel and Hizballah, as well as the 2007 fighting
between Lebanese Armed Forces (LAF) and Fatah al-Islam at the
Nahr al-Barid Palestinian refugee camp. The United States has a
strong interest in helping to further the professionalization
of the Lebanese security services and their ability to counter
terrorist threats. We have made substantial investments toward
this end, but the work is far from over. We must also work to
ensure the sustainability of U.S. assistance. In addition, the
international donor community needs to do a better job of
encouraging the kinds of structural reforms that will be
necessary to overcome the country's long-standing economic
challenges, such as the massive public debt.
While the key findings of this report will be incorporated
as case studies in the broader committee reports, I wanted to
share with you the entire staff trip report, which I believe
provides useful insight into key issues underpinning the myriad
challenges these two countries face and which U.S. security
assistance, as well as IFI lending, is designed to help
address. As the Congress and the Administration debate the
issue of foreign assistance reform in general, and the role of
security assistance in particular, as well as U.S. strategy to
combat al-Qaeda in the Arabian Peninsula, I hope that you will
find this information helpful.
I look forward to continuing to work with you on these
issues and welcome any comments you may have on this report.
Sincerely,
Richard G. Lugar,
Ranking Member.
FOLLOWING THE MONEY IN YEMEN
AND LEBANON: MAXIMIZING THE
EFFECTIVENESS OF U.S. SECURITY
ASSISTANCE AND INTERNATIONAL
FINANCIAL INSTITUTION LENDING
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EXECUTIVE SUMMARY
During a September 27-October 2, 2009, Senate Foreign
Relations Committee minority staff visit to Yemen and Lebanon,
staff gathered information to contribute to two forthcoming
committee reports, one on security assistance, and the other on
lending by International Financial Institutions (IFIs).
Although the circumstances facing Yemen and Lebanon differ
greatly, the two countries were chosen because the security
threats facing both have been serious; hence, they have both
been major recipients of U.S. security assistance, particularly
under Section 1206 of the National Defense Authorization Act.
In addition, while both countries have received substantial IFI
lending, significant structural reforms are urgently needed to
tackle long-term development challenges.
In both Yemen and Lebanon, although some problems persist
in the management of the security assistance portfolios, the
country teams have made a conscious effort to learn from past
mistakes, and the U.S. Chiefs of Mission were exercising
appropriate leadership over U.S. security assistance efforts.
In both Yemen and Lebanon, U.S. security assistance has had a
qualitative impact on the ability of the armed forces of the
respective countries to counter terrorist threats. At the same
time, in both countries, the United States and other
international donors must guard against inappropriate uses of
assistance. In Yemen, for example, the government may be
tempted to divert U.S.-provided counter-terrorism assistance
for use in the Houthi conflict in the North; in Lebanon,
foreign aid donors must be mindful that without proper
safeguards and transparency, local perceptions of favoritism in
the apportionment of development assistance could exacerbate
sectarian tensions. Finally, both Yemen and Lebanon are
believed to receive substantial off-budget financial infusions
from Saudi Arabia. While such cash transfers may help meet
short-term needs, over the long term the lack of transparency
surrounding them is unhealthy. Moreover, they may enable the
perpetuation of poor governance practices, such as patronage.
Among the key findings and recommendations are the
following:
Yemen
Yemen is in turmoil. Recent terrorist plots emanating from
Yemen against the United States and Western interests
have underscored that the threats emanating from a
resurgent al-Qaeda in the Arabian Peninsula (AQAP) pose
a direct danger to U.S. national security. Yemen is
simultaneously facing this and other security threats,
as well as impending natural resource debacles, such as
the depletion of its oil and water resources, and the
fundamental economic development challenges of a least
developed country. While the purpose of this staff
visit was not to find solutions to these myriad
problems, two things were clear:
1) The challenges facing Yemen are inter-
related and cannot be addressed in isolation.
However dangerous and immediate the country's
security threats, they need to be dealt with in
the context of the country's deteriorating
socio-economic situation and persistent
governance challenges; and
2) The United States lacks the leverage to
resolve all of the problems facing Yemen on its
own. It must work with the international
community, including the IFIs, in addition to
the Republic of Yemen Government (ROYG) and
Yemeni civil society groups to urgently address
these challenges before they spin out of
control.
The United States and the ROYG have different priorities
with respect to the myriad security threats that Yemen
confronts. While the USG is focused on preventing al-
Qaeda from making use of the country's ungoverned
spaces to recruit terrorists and launch terrorist
operations, President Saleh's top priority has been to
defeat the Houthi insurgency in the north. December
2009 saw a potential turning point, with Yemeni forces,
supported by the United States, escalating their
operations against al-Qaeda. Military airstrikes on
December 17 and 24, 2009 are said to have killed scores
of al-Qaeda operatives, including, reportedly, some
suicide bombers who were planning attacks against
Western interests in Sanaa. Prior to this campaign, the
ROYG was likely diverting U.S. counter-terrorism
assistance for use in the war against the Houthis, and
that temptation will persist. Sustaining ROYG
commitment to the fight against al-Qaeda will be
critical.
This potential misuse of security assistance underscores
the importance of enhancing the current end-use
monitoring regime for U.S.-provided equipment. Indeed,
the existing end-use monitoring protocols in place have
revealed discrepancies between U.S. records of security
assistance and those that are in the possession of
Yemeni defense forces. The Defense Security Cooperation
Agency (DSCA), the Department of State, and Embassy's
Office of Military Cooperation (OMC) should work to
reconcile these differences.\1\ In addition, they
should conduct a thorough review of physical security
and accountability procedures at the Yemeni Special
Operations Forces (YSOF) compound.
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\1\ For background on the respective roles and responsibilities of
the various actors, see the December 4, 2009, Congressional Research
Service (CRS) report prepared by Specialist in International Affairs,
Nina M. Serafino: ``Security Assistance Reform: Section 1206 Background
and Issues for Congress,'' which explains that major foreign military
assistance programs have traditionally been carried out under State
Department authority, oversight and guidance, while the Defense
Security Cooperation Agency (DSCA) has been responsible for
implementation.
Civilian-military coordination at Embassy Sanaa is now
excellent, with the Ambassador exercising Chief of
Mission authority, as appropriate, over military local
engagement efforts. Past problems resulting from a lack
of coordination underscore the importance of unity of
effort among all U.S. agencies. Making the most of a
situation in which the military has been given a bigger
role than is the norm in carrying out development
work--under the banner of countering extremism--the
USAID Mission in Yemen deserves credit for integrating
military counterparts into its efforts, investing
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heavily in training and mentoring them, as appropriate.
The Mission made the case that it would be well-served if
some of the reservists deployed to Yemen for short
(usually 6 months) tours could be re-deployed there for
follow-on deployments. Considering the substantial
investment the Mission makes in training these
reservists, and the limited tours of duty for which
they typically serve, this proposal is worthy of
consideration.
Lebanon
Lebanon is still recovering from the 2006 war between
Israel and Hizballah, which inflicted great damage
around Beirut, much of southern Lebanon, and other
parts of the country. The 2007 fighting between
Lebanese Armed Forces and Fatah al-Islam at the Nahr
al-Barid Palestinian refugee camp led to further
casualties and damage. These circumstances necessitated
a marked increase in U.S. assistance to Lebanon,
particularly in the realm of security assistance,
totaling several hundreds of millions of dollars.
Because of these massive infusions of aid, U.S. security
assistance programs in Lebanon have already come under
substantial oversight. Previous oversight reports have
recognized the concrete and measurable benefits that
this quick-impact assistance had on the ground. They
also identified some problems, many of them logistical
in nature, particularly from the early days of
implementation of assistance under Section 1206 of the
National Defense Authorization Act. While not all of
the problems have been eradicated, staff found that
U.S. officials had taken steps to learn from past
mistakes and avoid their duplication.
Having received large sums of Section 1206 assistance over
the past several years, the U.S. security assistance
program for Lebanon is now relying on Foreign Military
Financing (FMF) for the longer-term sustainment needs,
with no 1206 assistance requested for FY 2010. This is
in keeping with the Congressional intent that the 1206
program be limited to helping partner nations confront
urgent and emerging counter-terrorism threats.
The problem of official corruption was a recurring theme
during this visit, with several interlocutors pointing
to an overall lack of transparency, fueled by a lack of
accountability in the Government of Lebanon's budget
process, including off-budget revenues and
expenditures. In addition, many observers perceived an
unhealthy influence of the country's confessional
political system on the apportionment of state
resources. The U.S. Government, the IFIs and major
Western donors all have procedures in place to guard
against the misuse of foreign assistance. However, in
the face of real or perceived confessional biases in
the allocation of foreign assistance, donors should
encourage still greater transparency.
One interlocutor argued that, in the face of a succession
of crises, the Government of Lebanon has become a
master at manipulating international donors, relying on
hand-outs rather than taking on much-needed structural
reforms. Without minimizing the seriousness of the
crises that Lebanon has confronted in recent years,
international donors should guard against the pitfalls
associated with a crisis-driven approach. Rather,
against the backdrop of Lebanon's recent political and
economic difficulties, international donors should
press for structural reforms to address imbalances,
including, importantly, Lebanon's crippling official
debt.
INTRODUCTION
On September 27-October 2, 2009, Senate Foreign Relations
Committee minority staff visited Yemen and Lebanon to gather
information to contribute to two committee reports. The first
concerns security assistance, and is in follow up to the 2006
report, ``Embassies as Command Posts in the Anti-terror
Campaign.'' The second is the last in a series on lending by
international financial institutions (IFIs). Although the
circumstances facing Yemen and Lebanon differ greatly, the two
countries were chosen for this visit because they have both
been confronted with serious security threats requiring
substantial amounts of U.S. security assistance, particularly
under Section 1206 of the National Defense Authorization
Act.\2\ In addition, both countries will likely remain
flashpoints in the foreseeable future, necessitating a long-
term, sustainable, security assistance strategy. In addition,
both countries have received substantial IFI lending, but
significant structural reforms are urgently needed to tackle
long-term development challenges.
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\2\ Ibid. This report provides a thorough review of the evolution
of Section 1206 authority. Because Lebanon and Yemen are the second and
third largest recipients of Section 1206 funding to date, totaling
$105.5 million and $97.3 million, respectively, the report goes into a
fair amount of detail about the composition of the respective
assistance packages.
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With respect to Yemen, the purpose of the visit was not to
find solutions to the myriad and urgent challenges facing that
country, or the particular threat posed by al-Qaeda there,
which has claimed responsibility for the December 25, 2009
attempted bombing of a Detroit-bound airplane. Background on
these issues is offered below, however, to provide context for
the observations and recommendations for U.S. engagement.
Lebanon, meanwhile, is still recovering from the 2006 war
between Hizballah and Israel, and has since been subject to
prolonged periods of political gridlock. Indeed, the visit took
place against the backdrop of lengthy negotiations to form a
government of national unity following that country's June 7
elections. Therefore, the report offers background on the
Lebanese political climate, including the sectarian politics
behind these national unity talks, to provide context for staff
observations on security assistance and IFI lending. In
addition to key findings on those subjects, the report has
sections on ``red flags'' that warrant further attention.
Recommendations are in italics.
YEMEN
Background
Yemen is in turmoil; many analysts have characterized it as
a ``failing'' or failed state. Its weak central government is
led by President Ali Abdullah Saleh, who has been in power
since the 1990 merger between North Yemen and South Yemen (and
who was President of North Yemen from 1978 to 1990). There is
no clear successor. Outside of the capital, the central
government enjoys little legitimacy, resulting in large swaths
of ungoverned spaces. The President relies on patronage to
perpetuate his influence.
Socio-economic Challenges: The poorest country in the Arab
world, Yemen faces daunting economic development challenges,
coupled with serious security threats. On the economic front,
Yemen is quickly depleting its oil, which has generated over 75
percent of its income. Water resources are also running out,
largely as a result of poor resource management and a growing
popular addiction to the mild narcotic qat, a water-intensive
crop, the cultivation of which absorbs approximately one-third
of the country's water. In addition, as a result of government
subsidies, cultivation of qat has displaced that of other
agricultural products, increasing the country's food
insecurity.\3\ Demographic trends are only intensifying these
problems: population growth exceeds 3.4 percent per year, and
more than two-thirds of the population is under the age of 24.
The unemployment rate was last officially estimated (in 2003)
at 35 percent, and is probably higher. Literacy rates are about
50 percent.\4\
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\3\ According to State Department, only 3% of Yemen's land is
arable. The country has long been a food importer. In 2009 the World
Food Programme provided $55 million in assistance to 1.6 million
beneficiaries in Yemen.
\4\ Statistics in this paragraph are widely cited in such reports
as the State Department's Background Notes (http://www.state.gov/r/pa/
ei/bgn/35836.htm); the CIA World Factbook (https://www.cia.gov/library/
publications/the-world-factbook/geos/ym.html); and the reports of
numerous non-governmental organizations.
Security Threats: The security situation is extremely
worrying. The Republic of Yemen Government (ROYG) is engaged in
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several ongoing conflicts:
Al-Qaeda has long been active in Yemen, as evidenced by the
numerous attacks against Western targets for which it
has claimed responsibility, going back to the October
2000 attack on the USS Cole. As this report was going
to press, al-Qaeda claimed responsibility for the
December 25, 2009 attempted bombing of Northwest
Airlines flight 253 by the Nigerian-born, Yemeni-
trained Umar Farouk Abdulmutallab; and on January 3,
2010, the U.S., British, and several other Western
Embassies in Sanaa temporarily closed, due to credible
threats of planned suicide attacks by al-Qaeda
operatives. Al-Qaeda twice launched attacks on the U.S.
Embassy in September 2008; the second of which resulted
16 dead, including the 6 attackers. In January 2009,
al-Qaeda affiliates in Yemen and Saudi Arabia merged to
form al-Qaeda in the Arabian Peninsula (AQAP). AQAP was
likely responsible for the June 2009 kidnapping and
murder/mutilation of nine foreign aid workers, as well
as the botched suicide bombing that targeted Saudi
Assistant Interior Minister Prince Mohammed bin Nayef
in August 2009. Yemen is the ancestral home of Osama
bin Laden, and a disproportionate number of foreign
fighters in Iraq and Afghanistan are said to have been
of Yemeni origin. Hundreds of these veterans may now be
returning to Yemen, as al-Qaeda seeks to exploit the
country's ungoverned spaces to plan and launch attacks.
Since 2004, there have been several rounds of civil war
between al-Houthi guerrillas of the Shi'a Zaidi sect in
the North and ROYG forces. Fighting erupted again in
August, 2009 and has resulted in thousands of
casualties, and 150,000 displaced persons. The ROYG's
use of aerial bombardment and artillery has contributed
to the high toll of civilian casualties.
Simmering resentment over perceived, and real,
disenfranchisement by residents of the South has
perpetuated unrest and irredentism. The latter half of
2009 has seen an uptick in clashes between southerners
and the now exclusively northern soldiers deployed in
the South. Recent calls for secession by former Saleh
ally Sheikh Tariq al-Fadhli raise the specter of civil
war.
Finally, Yemen faces the increasing phenomenon of piracy
off the Somali coast. According to a report published
by the Carnegie Endowment for International Peace, 130
piracy incidents occurred in the Gulf of Aden in the
first half of 2009, compared to 111 in all of 2008.\5\
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\5\ Christopher Boucek, Yemen: Avoiding a Downward Spiral, Carnegie
Papers, Carnegie Endowment for International Peace Middle East Program
Number 102: September 2009, p. 16.
What is the United States Government doing to help the ROYG
confront these challenges, and how do we prioritize among them
to best target our assistance? No doubt, the threat posed by
AQAP is the most critical to U.S. national security interests,
and the USG must do everything in its power to neutralize that
threat. As Christopher Boucek argues in the above-mentioned
Carnegie report, however, it would be a mistake to focus
foreign aid--and the attention of policymakers--inordinately on
seeking a military solution to Yemen's manifold problems. There
is a clear linkage between Yemen's economic and social
development challenges and its security threats. Indeed, the
perceived--and real--lack of prospects for the future may be
contributing to the appeal of Islamic extremism. As one Yemeni
interlocutor put it: ``Either we give our young people hope, or
someone else will give them an illusion.''
The United States lacks the leverage to resolve the
problems facing Yemen on its own. It must work urgently with
ROYG and with partner civil society organizations in Yemen, and
with like-minded partners in the international community,
including the IFIs, and those with the most influence in Yemen,
such as Saudi Arabia, urgently to address these challenges
before they spin out of control.
U.S. Security Assistance to Yemen
Trends in U.S. Assistance to Yemen
U.S. security assistance to the ROYG has increased
dramatically in the past decade, as illustrated in the below
table. Since the 2006 creation of Section 1206 authority in the
National Defense Authorization Act, U.S. security assistance
has been more heavily weighted to military- rather than
civilian-funded programs: In FY 2006, Yemen received $4.3
million in Section 1206; in FY 2007, it received $26 million.
In FY 2009, that figure jumped to $66.8 million. Levels of
Foreign Military Financing (FMF), administered by the State
Department, have been more volatile. After zero funding in this
category in FY 2001, Yemen benefited from a $20 million spike
in FY 2002, with significant variations in following years.
Economic development assistance, meanwhile, has seen a
steady upward trajectory. USAID-funded development assistance
has grown from zero in fiscal years 2001-2003 to $4.9 million
in FY 2008; $11.2 million in FY 2009. USAID has also funded
Global Health programs in Yemen since FY 2008 at about $3
million/year. Economic Support Funds (ESF) have also steadily
increased, from zero in FY 2001 to $15.2 million in FY 2007.
After a temporary decrease in FY 2008 to $1.5 million, ESF shot
back up to almost $20 million in FY 2009.
In FY 2009, Yemen received just over $117 million in U.S.
assistance, of which roughly $73 million (or 62 percent) was in
the security domain. The balance went to ESF, Development
Assistance (DA), Section 1207 Stabilization Programs, and
Global Health. Some analysts have criticized this relative
proportion of security assistance as indicative of a
``misallocation of priorities'' in Yemen.\6\ The reality is
more complex. In fact, the U.S. military is also supporting
economic development and good governance. For example, the
Special Operations Command/Central Command (SOCCENT) has been
engaged in rural development programs in Yemen's tribal areas.
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\6\ Boucek, p. 22.
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Red Flags
Different Priorities: The United States and the ROYG have
different priorities vis-a-vis Yemen's security threats. While
the USG is focused on preventing al-Qaeda from launching
further terrorist attacks from Yemen, and has provided counter-
terrorism assistance to the ROYG for this purpose, President
Saleh's top priority has been defeating the Houthi rebellion in
the north. As a result of this difference in focus, there are
serious concerns that U.S. counter-terrorism assistance,
provided to assist the ROYG in combating al-Qaeda, has been
diverted for use in the war against the Houthis.\7\ December
2009 may mark a potential turning point in the convergence of
priorities, when Yemeni forces, supported by the United States,
escalated their operations against al-Qaeda. Military
airstrikes on December 17 and 24, 2009 are said to have killed
scores of al-Qaeda operatives, including, reportedly, some
suicide bombers who were planning attacks against Western
interests in Sanaa. Even so, the temptation to divert U.S.
counter-terrorism assistance for use in the war against the
Houthis will persist. Sustaining ROYG commitment to the fight
against al-Qaeda will be critical.
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\7\ Although the ROYG often seeks to portray the war in the north
as ``counterterrorist'' in nature and alleges that Iran is supporting
and supplying weapons to the Houthis, these allegations have not been
substantiated.
The reported use of night-time raids in Saada raises
questions about whether the 1206-funded night-vision
equipment has been used in these raids.\8\
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\8\ It is not possible to establish whether these night-time raids
were enabled by U.S.-provided NVGs. The Yemeni armed Forces have also
purchased night vision equipment from Russia and other sources.
Likewise, concerned about the possibility of the Yemeni Air
Force using propellant activated devices in aerial
campaign in the North, the Embassy has put a hold on
the provision of this equipment to the Yemeni Armed
Forces.
U.S. Assistance to Yemen (In Millions of Historic Dollars) \9\
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2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 Request
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Development Assistance.................................... 0 0 0 2.0 0 0 1.5 4.9 11.2 35
Food Aid.................................................. 38.5 0.6 29.6 38.4 0 11.5 0 2.2 0 0
Economic Support Funds.................................... 0 2.0 8.0 16.7 7.8 20.8 15.2 1.5 19.8 0
Foreign Military Financing................................ 0 20 1.9 14.9 10.4 8.4 9.7 4.0 2.8 10.0
International Military Education Training................. 0.2 0.5 0.6 0.9 1.0 0.9 1.0 0.9 1.0 1.1
Nonproliferation, Antiterrorism, Demining and Related 1.2 0.8 0.8 0.5 1.9 0.2 2.3 2.5 2.5 3.6
Programs.................................................
International Narcotics Control and Law Enforcement....... 0 0 0 0 0 0 0 0.5 0 1.0
NDAA Section 1206......................................... 0 0 0 0 0 4.3 26.0 0 67 0
NDAA Section 1207......................................... 0 0 0 0 0 10 0 10 10 0
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\9\ To best reflect how much money was spent (not just planned for), where possible data reflects obligations, per fiscal year. Because of different
U.S. Government accounting practices, however, this is not always possible. Therefore, data for Sections 1206 and 1207 reflects allocations, with data
provided by the State Department's Office of the Coordinator for Foreign Assistance and the Congressional Research Service (CRS). All other data
reflects obligations per fiscal year, with data through 2007 per the U.S. Agency for International Development's Greenbook (http://
gbk.eads.usaidallnet.gov/). Data since that time comes from CRS.
During the visit, the Embassy's FMF Officer expressed
uncertainty about whether there was a clear U.S. policy
prohibiting the use of U.S. security assistance in the
Houthi conflict, and, if so, how this policy was being
communicated to the ROYG. When staff mentioned this
officer's apparent need for guidance to Ambassador
Seche, he said the policy was clear, and that the OMC
Chief was aware of it, as was the Yemeni government.
But, he undertook to clarify to all OMC staff that U.S.
assistance should not be used against the Houthis. The
Ambassador also reviewed several instances in which
U.S. policy against using U.S.-provided security
assistance in the Houthi conflict had been conveyed to
top Yemeni leaders.
Need for Improved End-Use Monitoring: OMC engages in end-
use monitoring, with an inspection of night-vision equipment
provided to the Counter-terrorism Unit and the Yemeni Special
Operations Forces (YSOF) conducted as recently as June, and
July, 2009, respectively. Several USG interlocutors expressed
the view that the existing system of biannual monitoring is
insufficient to determine with precision how U.S. assistance is
being used, however. Moreover, in the most recent round of
inspections, the FMF officer found that much equipment was
unaccounted for. There were also significant discrepancies
between DSCA's data on the quantity that had been provided and
that which was in the Yemeni forces' inventories.
Recommendation:
In light of the above concerns about the Yemeni Armed
Forces' use of U.S. security assistance against the
Houthis, the USG should develop a more robust end-use
monitoring regime for Yemen, and for any other country
where there is ongoing armed conflict in which U.S.-
provided CT resources could be diverted.\10\
---------------------------------------------------------------------------
\10\ Ambassador Seche told staff on October 20, 2009 that he had
already directed OMC to develop a much more rigorous system. On
November 11, 2009, State Department officials confirmed that such a
system is being developed.
In addition, in accordance with OMC's
recommendations, DSCA, the Department of State, and OMC
should conduct a thorough review of physical security
and accountability procedures at the YSOF compound,
making improvements a condition for further U.S.
military assistance. A DSCA-appointed and -funded team
---------------------------------------------------------------------------
should be sent to Yemen TDY to assist in this review.
DSCA-OMC Process Problems: OMC reported numerous
breakdowns in communications with DSCA. As OMC representatives
put it, ``DSCA needs to be revamped. It needs to be more
accountable to Embassies.'' This observation tracks with
findings in a recent report issued jointly by the Inspectors-
General of the Departments of State and Defense on Section 1206
assistance, which pointed to numerous instances of problems in
information flow between DSCA and those who are responsible for
security assistance at foreign embassies. Such problems
concerned the status of assistance actually delivered, and even
the quantity of materiel agreed in contracts.\11\
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\11\ See the Interagency Evaluation of the 1206 Global Train and
Equip Program, Inspectors General of the U.S. Department of Defense
(Report No. ID-2009-007) and U.S. Department of State (Report No. ISP-
I-09-69), August 31, 2009, in particular Appendix H: Lebanon Case
Study, pp. 64-66.
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Pros and Cons of Increasing the Military Involvement in Foreign
Assistance
Asked for his views about the foreign policy implications
of the growing military role in foreign assistance, Ambassador
Seche expressed concerns about potential pitfalls if Chief of
Mission authority in coordinating and overseeing such programs
is circumvented. For example, the above-mentioned SOCCENT rural
development program reportedly got off to a rocky start due to
misperceptions on the part of tribal leaders about what the
USG's intentions were. Fortunately, an embarrassing
international incident was avoided. As a result of this
incident, the Ambassador has more firmly asserted his primacy
as Chief of Mission in approving such operations. In addition,
the SOCCENT team learned some important lessons about the need
to fully integrate its efforts with the Embassy's broader
vision, and to take advantage of the regional expertise and
cultural knowledge of their State Department and USAID
colleagues.
Asked about the pros and cons of using military resources
to conduct the kinds of economic development activity that
traditionally has been the purview of civilian agencies,
Embassy staff indicated that while USAID has the comparative
advantage with respect to conceptualizing, implementing, and
overseeing development assistance, in Yemen at least, the
Mission has had to learn to live with a bigger military role in
this field. Many Embassy officers have chosen to embrace this
reality, pointing out the advantages of being able to draw on
the U.S. Military's vast personnel and financial resources. In
addition, because these military officers operate under the
authority of their respective commands, as opposed to under
Chief of Mission authority, they are allowed to travel to some
areas of the country that are off-limits to civilian personnel.
Due to Embassy travel restrictions for civilian employees,
USAID officers have not been out to visit some USAID-funded
projects in many years.
Civ-Mil Coordination Within the Embassy
The need for better civilian-military coordination within
the Embassy was identified in the 2006 ``Embassies as Command
Posts'' report. Ambassador Seche clearly takes seriously the
exercise of Chief of Mission authority in these matters. He
chairs bi-weekly meetings of the Embassy's inter-agency
Counter-terrorism Working Group. Indeed, the military
assistance program in Yemen has improved, thanks to this
coordination between the military and civilian sides of the
Embassy. Asked to characterize internal Embassy coordination,
one military officer said it was ``phenomenal.'' The USAID
Mission Director agreed, praising the ``unity of purpose''
pursued by the different actors on the country team.
As evidence of the military's full integration, the USAID
Mission Director pointed to the fact that military
representatives had been invited to, and participated
constructively in, USAID's strategic planning conference in
Cairo, at which the Mission's new three-year strategy was
developed. The SOCCENT Forward Lt. Col. in country said his
team ``wouldn't think of doing anything that had not been fully
coordinated with the country team.'' Staff found this
commitment to coordination and unity of purpose exemplary. No
doubt, the personalities of the Embassy's leaders have
contributed to this seamlessness, but staff found that the
structures are in place to sustain it.
Regional Expertise and Continuity of Effort
Another of the areas of potential pitfall identified in the
``Embassies as Command Posts'' report was the deployment of
military personnel with limited regional or linguistic
expertise for short (usually six-month) tours. This phenomenon
continues to be a problem in Yemen. The USAID Mission Director
said he and his team make a substantial investment in training
new military arrivals with whom they must work closely in
carrying out joint programs. He emphasized that USAID is
prepared to make this investment. He would like to see the
Mission get more return on this investment, however. He
suggested that reservists who are activated for six-month tours
in Yemen as Civilian Affairs Officers or with the Military
Information Support Team (MIST) return to their country of
assignment for a follow-on deployment.
Recommendation:
In Yemen, where USAID has invested heavily in
training these reservists in development policy
management and local culture, it is understandable that
the Mission would want to improve returns on this
investment. Such follow-on re-deployments also merit
consideration more broadly.
USAID/Sanaa is actively seeking the redeployment of two
such MIST team members, whose work has been quite well
received. SOCCENT has also learned that in a country/region
where local culture is built on relationships, episodic
engagements will not succeed in delivering results. It has
therefore embedded teams of trainers with the host government
counterpart groups.
FMF vs. 1206
Of the host government officials with whom staff spoke,
there was little to no understanding of the differences between
FMF and Section 1206-funded assistance. They did not
distinguish at all between military-administered or civilian-
administered programs. Their focus, understandably, was on the
end result, i.e., what kind of materiel and training assistance
could be provided, and how quickly.
When asked about the relative advantages of 1206, as
opposed to FMF, representatives from the Office of Military
Cooperation (OMC) expressed understanding for the relative
slowness of the FMF process, from the Letter of Approval phase
to actual delivery of materiel. Because FMF is meant for long-
term sustainment, they said, long lead times (i.e., as much as
three years of advance planning) can be built into the planning
process. Section 1206 funds, while meant to have a quicker
impact to deal with urgent needs, also suffer from delays,
however, since a ``pseudo-FMF'' process is followed once the
funds have been approved.
To help speed up the 1206 process, Embassy Sanaa's OMC team
offered the suggestion that some of the steps in the approval
process should be allowed to be pursued simultaneously, rather
than sequentially. In addition, to mitigate the sometimes long
lead times in procurement, one OMC officer suggested that the
Section 1206 authority be amended to allow for disbursement for
approved projects over a two-year period.\12\ Finally, to avoid
situations in which Posts invest significant resources in
developing proposals that end up not being approved, the
Combatant Commands, with input from the State Department,
should provide Embassies with a sense of the likelihood that
their Section 1206 proposals would receive funding before the
Embassies spend too much time in proposal development phase.
---------------------------------------------------------------------------
\12\ In fact, in the FY 2009 Defense Authorization Act, the
Congress provided authority for Section 1206 funds to be used in
consecutive fiscal years, i.e., funds for a program that begins in one
fiscal year may be used for that program in the next fiscal year. It is
not likely that 1206 authorities would be expanded further for multi-
year funding. Although the idea may warrant consideration from the
perspective of logistical effectiveness, the notion of multi-year
programming may run counter to Congressional intent in creating the
1206 mechanism to help partner nations combat urgent and emerging
terrorist threats. See the above-referenced CRS report on ``Security
Assistance Reform: Section 1206 Background and Issues for Congress''
for a review of the legislative history and evolution of Section 1206
legislation.
---------------------------------------------------------------------------
Recommendation:
These suggestions have the potential to improve
effectiveness of the 1206 program and warrant further
study.
Constructive Criticism from Host Government End Users
The Chairman of the Yemeni Coast Guard (YCG) expressed
gratitude for the significant materiel support and training
that the USG has provided the Yemeni Coast Guard. Specifically,
the initial tranche of 44-foot motorized lifeboats allowed the
YCG to start operating. Asked for constructive criticism about
the program, the YCG requested additional assistance, more
timely delivery, and in one case, easier-to-maintain motors:
A second tranche of Section 1206-funded boats, some 7-
meters and some 13-meters, boosted the YCG's ability in
the realm of protection, search and rescue, and
training. These boats have limited endurance in the
sea, however. The YCG now seeks to acquire medium-sized
boats to conduct anti-piracy, anti-smuggling, and anti-
terror missions. Without these boats, the YCG is unable
to respond to Coalition Forces' warnings about Somali
pirates in international shipping lanes. (The USG will
provide two 87-foot boats funded under Section 1206,
but delivery is not expected in 2011.)
The Mercury outboard motors provided in some of the boats
were deemed ``too sophisticated'' (with their advanced
electronic systems) for the YCG to maintain. The YCG
expressed preference for Yamaha equivalents, which is
better understood by local mechanics and for which
spare parts are more easily accessible. (U.S. Marines
were able to repair two out of four of these motors on
a recent training exercise.)
Approximately two years ago, the Army Corps of Engineers
agreed to build a pier at the Gulf of Aden. This FMF-
funded contract was opened for bidding, but no U.S.
companies bid, either because of the security situation
in Yemen or the relatively small size of the project.
The YCG fulfilled its part of the agreement by
preparing the infrastructure. The Coast Guard was
concerned about the length of time that had lapsed
without U.S. fulfillment of its commitment.
Specific areas for improvement cited by the Yemeni Air
Force Colonel in charge of international cooperation include:
Provision of English language labs: Through a mix-up at the
port of entry, equipment and materials to create
English language instruction labs, which had been
designated to go to the Air Force, ended up being
redirected to the YCG.
Difficulties in Parts Repair Process: The Air Force has run
into repeated problems when it sends parts back to the
United States for repair. Many contractors erroneously
believe that Yemen is not eligible to receive military
assistance, so they disallow third-party transfers.
A couple years ago, Yemen requested Excess Aerospace Ground
Equipment (AGE). The equipment was based in Europe.
Unfortunately, a contract was never let for the
refurbishment of this equipment, since it was unclear
which of the services would be responsible for funding
it. According to OMC, DSCA recently instructed the Air
Force to take responsibility for this project.
An Avoidable Problem in Provision of Excess Defense Articles (EDA)
Yemen benefited from Excess Defense Articles amounting, on
paper at least, to $36.3 million in FY 2007. According to OMC
representatives, this number is artificially inflated, as Yemen
is eligible to purchase EDA at drastically discounted prices.
The EDA provided consisted of medical supplies, uniforms, and
personal equipment. Unfortunately, the Ministry of Defense
subsequently rejected some of the medical equipment provided,
probably because some of it was Israeli-origin.\13\ Because
most products in the EDA catalogue are not accompanied by
descriptive photographs (which in this case would have shown
Hebrew writing), the origin of the equipment was not known at
the time of order.
---------------------------------------------------------------------------
\13\ Of course, the United States actively opposes the Arab League
boycott of Israel. While some Arab states do not observe the boycott,
Yemen does.
---------------------------------------------------------------------------
1206: Consultations with Host Government vs. Managing Expectations
Noting the recommendation in the August 31, 2009 joint
report by the Inspectors General of State and Defense, OMC
officials said it would not be helpful to engage in
consultations with Yemeni military authorities in the 1206
proposal development phase. They expressed the opinion that the
partnership is not mature enough to allow consultations prior
to approval. To do so would risk raising expectations on the
part of their Yemeni counterparts. OMC representatives
explained that they make judgments based on their knowledge of
the Yemeni military's needs.
IFI Lending
Overview of Development Issues and International Donor Assistance
Yemen is beset by extreme poverty, economic stagnation,
explosive population growth, deficient health and education
systems, and rapidly depleting natural resources, all made
worse by weak governance and endemic corruption. The country
ranks 153rd on the Human Development Index. Yemen was already
falling behind in its efforts to reach most Millennium
Development Goals; the global economic crisis has compounded
its economic woes, both from falling oil revenues and decreased
remittances from Yemenis working abroad. The UN Development
Program considers Yemen a least developed country (LDC), and
the country's socio-economic indicators bear this out. The $16
in per capita donor assistance it receives is well below
international averages for LDCs, however. (By comparison, Benin
receives $36, and Mozambique $51, respectively, in per capita
assistance.)
Since its recent pledge of $83 million per year in
development assistance for the next five years, the United
Kingdom has become Yemen's largest bilateral donor. At a
November 2006 donors conference in Paris, international donors
pledged $5 billion for the period 2007-2010. Donors included:
Saudi Arabia, the Arab Fund for Socio-Economic Development,
Qatar, the United Arab Emirates, the World Bank Group, the Arab
monetary Fund, the Islamic Development Bank, Kuwait,
Netherlands, Germany, the European Union, and the United
States. For a number of reasons, many of the funds pledged at
Paris have not yet materialized however. First, Yemen has not
met some of the reform conditions some donors tie to their aid.
In addition, implementation of projects is often constrained by
Yemen's absorptive and capacity issues. That said, it should
also be taken into consideration that Yemen is believed to
receive substantial and regular off-budget financial infusions
from Saudi Arabia. Many commentators view such cash transfers
as deleterious, contributing to a lack of transparency and
enabling the perpetuation of poor governance practices, such as
patronage.
The World Bank's Program
Yemen has experienced periods of steep decline in
international donor assistance, following the 1991 Gulf War,
when Yemen supported Saddam Hussein; and following its own
civil war in 1994. Since this latter period, Yemen has been
gradually rebuilding its relationships with development
partners, and in recent years a number of donors have increased
their involvement in Yemen, including beyond formerly project-
based assistance.
According to the World Bank Resident Representative, the
Bank has about $1 billion in existing projects in Yemen, some
of which have been ongoing for 4-5 years. The Bank's annual
lending is between $120-130 million. For the past two years,
Yemen has benefited from International Development Association
(IDA) grants; previously World Bank assistance took the form of
credits. The Bank's assistance pledged at the 2006 Consultative
Group (CG) meeting on Yemen account for about 8 percent of
total pledges (compared to about 50 percent prior to the CG).
The International Monetary Fund (IMF) does not have a permanent
presence in Yemen but provides advisory services via the
Article IV process. The last Article IV consultations took
place from October 21 to November 3, 2008 in Sanaa.
The Bank's objective in Yemen is to facilitate Yemen's
further progress toward the Millennium Development Goals. These
goals, in turn, are in sync with the ROYG's stated goals, as
articulated in the National Reform Agenda, the focus of which
is on human development, including education and health; water
resource management; and good governance. The Bank measures the
effectiveness of its programs in accordance with institutional
standards, i.e., it produces Project Completion Reports when a
project closes. The Bank brings out a new team not involved in
the planning or implementation of the project to assess the
World Bank's role and the government's role and solicits
government comments. Before the report is made public, it is
subject to review by the Independent Evaluation Department at
the World Bank in Washington.
Need for Private Sector Investment
Increased foreign direct investment (FDI), as well as
domestic investment, will be critical if Yemen is to create
needed jobs--and hope for the future--among its increasing
population of young job seekers. According to the 2009 report
of the UN Conference on Trade and Development, Yemen is
experiencing a downward trend in FDI inflows. Gross domestic
investment as a percentage of GDP has also declined for the
past two years. In the face of falling oil revenues and its
rapidly depleting oil sector, the ROYG had been putting its
hopes in the development of the liquefied natural gas (LNG)
sector. As the Country Director for the International Finance
Corporation put it, however, the slump in the international
market for LNG renders this strategy no longer viable. He made
the case that, ``If Yemen's economic development prospects are
to have any success, it will be as the result of very time-
consuming, hard-slogging micro-financing.'' There are no quick
fixes. Right now, he said, there is no coordination among
donors on private sector development--a reality he intended to
change. Nor were there any micro-finance banks based in Yemen,
although one--al-Amal--has announced plans to open there.
Recommendation:
To the extent that micro-finance banks need to be
induced to enter the Yemeni market, international
donors should provide incentives. Similarly, the
international donor community in Yemen and the ROYG
itself should focus more attention--and resources--on
private sector development. The IFC has thus far
provided business education training to 26,000
graduates, many of whom will become trainers
themselves. Such activities should be expanded and
built upon.
World Bank Investigative Panel: Oversight Run Amuck
On June 18, 2009, the World Bank issued a 167-page World
Bank Inspection Panel Report on an Institutional Reform
Development Policy Grant, in which a poorly documented
complaint on the part of a Yemen-based non-governmental
organization was scrutinized in minute detail.\14\ Asked about
how many staff hours had been spent on reviewing and explaining
the Bank's actions in response to the group's ill-conceived
accusations, the Bank's Resident Director admitted that an
inordinate amount of staff time and effort, including at the
executive level, had gone into this process. He explained that
there had been political pressure in Washington to look into
this case, since it was the first complaint ever received from
the Middle East/North African region.
---------------------------------------------------------------------------
\14\ The Inspection Panel: Report No. 48995-YE Report and
Recommendation: Yemen: Institutional Reform Development Policy Grant
(Grant No. H336-YEM), June 18, 2009.
---------------------------------------------------------------------------
Recommendation:
This case was not worthy of the substantial staff
time and resources that the Bank expended in responding
to it. The U.S. Executive Director to the World Bank
should weigh in with Bank leadership to ensure that
some threshold of credibility is established prior to
commitment of Bank resources in investigative panels.
Parliamentary Oversight
While the Yemeni Parliament does not challenge the
Executive Branch in exercising its oversight prerogatives, it
has been more vigorous with respect to reviewing World Bank
lending. In some cases, this has led to delays in project
implementation, in one recent case, a 24-month delay.
Nonetheless, the World Bank Resident Representative welcomed
the Parliamentary role as ``healthy.''
Empowering Reform From Within
Unhappy with the slow pace and uneven results of Yemen's
reform efforts, a small group of largely Western-educated and
well-connected intellectuals and technocrats, under the
auspices of the President's son, developed a targeted action
plan to focus the government's short- to medium-term reform
efforts. This group took into consideration the Government's
Third Five-Year Plan for Poverty Reduction, as well as other
existing plans and strategies, but determined that these
various plans sought to take on too many challenges at once.
They therefore developed 10 priorities on which the ROYG should
focus for the next year. Indeed, when staff asked the Vice
Minister of Planning and International Cooperation to describe
the ROYG's development strategy, he said that this 10-point
plan was now the operating document. The 10 points are not
perfect; they do not address head on the need to eliminate
government subsidies for diesel, for example, relying instead
on a strategy of seeking lower prices on the international
market to reduce costs. That said, because this plan is
``locally owned,'' in the words of one of its drafters, it
stands a greater chance of success than reforms mandated by
foreign donors.
Recommendation:
The international donor community should work to
empower and support such locally owned reform
processes.
LEBANON
Background
Lebanon and the United States have traditionally enjoyed
close relations, reflecting the countries' cultural and
political ties, as well as the bonds cultivated by a large
Lebanese-American community. Lebanon is a democracy, but the
country's democratic processes and institutions reflect
entrenched confessional political affiliations. By agreement
since independence in 1943, and affirmed in the 1989 Ta'if
Agreement, the country's top three constitutional positions are
reserved for citizens from specific religious groups: the
President is Maronite Christian; the Prime Minister is Sunni
Muslim; and the Speaker of Parliament is Shi'a Muslim.
Confessional politics can be messy, as was seen in the lengthy
period of negotiations to form a national unity government
following the June 7th elections. The result was five months of
inertia, as the caretaker government was not empowered to make
significant decisions, including on security assistance and
international financial institution lending.
Further complicating matters, the Parliament has not passed
a budget for the past five years. Official guidance allows
Ministries to spend 1/12 of the previous year's expenditures
each month, but a widening deficit suggests that more is being
spent. Moreover, the substantial off-budget aid that the GOL is
believed to receive from Saudi Arabia is not accounted for,
contributing to a general lack of fiscal accountability.\15\
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\15\ For a general discussion on the need for fiscal transparency
in Lebanon, see the 2009 report on Lebanon by the e-Standards Forum of
the Financial Standards Foundation: http://estandardsforum.org/lebanon/
standards/code-of-good-practices-on-transparency-in-fiscal-policy.
---------------------------------------------------------------------------
It must also be taken into consideration that Lebanon is
still recovering from the 2006 war between Israel and
Hizballah, which left much of southern Lebanon and other parts
of the country in ruins. The 2007 fighting between Lebanese
Armed Forces and Fatah al-Islam at the Nahr al-Barid
Palestinian refugee camp led to further casualties and damage.
According to the State Department, over $3.7 billion in
civilian infrastructure was destroyed in both conflicts and
thousands were displaced. Postwar donors' conferences in
Stockholm in August 2006 and Paris in 2007 resulted in about $8
billion in pledges of mostly in-kind assistance, much of which
was conditioned on economic reforms. U.S. assistance to Lebanon
increased markedly after the 2006 war and even more so in the
aftermath of the Nahr al-Barid conflict.
Finally, no study of the impact of U.S. programs or
assistance in Lebanon would be complete without taking into
consideration the constraints imposed by the security situation
there. Specifically, all U.S. Direct Hire employees must live
on the Embassy compound. The Embassy's current facility is
operating at full capacity with only very limited options for
expansion. Employees' movements outside the compound must take
place in armored vehicles with bodyguard protection, for which
there are finite resources. In the words of the Deputy Chief of
Mission, this reality ``effects everything we do--it limits
everything we do.'' For example, the USAID Mission is comprised
of two US Direct Hires, but programs comparable in magnitude to
the $100 million it will soon be managing would be staffed by
many more in other countries. All too often, requests for
official visits to Lebanon end up being denied, simply because
there is not sufficient space to house the visitors. The
Embassy is currently engaged in negotiations to purchase a
property on which to build a new Embassy compound (NEC) that
would be able to meet anticipated security and infrastructure
needs, and the State Department has identified funding for this
construction starting in 2011.
Recommendation:
Given the importance of U.S. interests in Lebanon and
the constraints placed on pursuing those interests by
the current infrastructure limitations, the Department
should, within existing budgetary resources, make the
acquisition of land and building of a NEC a high
priority, applying diplomatic pressure on those in a
position to influence this outcome, as appropriate.
Red Flags
The problem of official corruption was a recurring theme
during this visit, with several interlocutors pointing
to an overall lack of transparency, fueled by a lack of
accountability in the official budget process, as well
as off-budget revenues and expenditures. Many observers
also perceive an unhealthy influence of the country's
confessional political system on the apportionment of
state resources. Speaking to the specific problems of
corruption in the management of international donor
assistance, one official charged that, ``The entire
system is corrupt and inefficient.'' He cited as
examples cases in which waste water treatment plants
were built with no connection to houses; roads were
built before plumbing had been installed, requiring the
newly constructed roads to be torn up and re-
constructed. He attributed some of these problems to a
``shopping list approach'' to foreign aid, and the
absence of national priorities or a commitment to
exploiting synergies.
Manipulation of Crises: One interlocutor argued that, in
the face of a succession of crises, the GOL has become
a master at manipulating international donors, relying
on hand-outs rather than taking on much-needed
structural reforms. ``The whole international community
has been blackmailed for ages. We don't need more
money. We need to change the rules of the game. We need
to change the structure. We need to break our
dependence on foreign aid.''
Recommendation:
Without minimizing the seriousness of the crises that
Lebanon has confronted in recent years, the United
States Government and other international donors should
guard against this phenomenon. Moreover, it should be
kept in mind that, while crises can be used an excuse
for inaction, they can also be catalysts for addressing
difficult issues.
U.S. Security Assistance to Lebanon
Trends in U.S. Assistance
As documented in the chart below, U.S. assistance to
Lebanon has mushroomed in recent years. As recently as FY 2004,
the United States provided Lebanon with little security
assistance. There was no Foreign Military Financing (FMF)
program, and funds for International Military Education and
Training (IMET) were limited to $800,000. The events of 2006
changed that. Hizballah acted as an independent militia in
provoking and conducting war with Israel in the summer; it
later sought to topple Lebanon's elected government. Thus, the
United States vastly increased its security assistance to
Lebanon to help enhance the effectiveness of its armed forces
and their ability to rein in Hizballah. This assistance has
taken the form of FMF, which has increased dramatically; and
IMET, which has increased only moderately; in addition to
significant infusions of assistance under Sections 1206, of
which Lebanon has been one of the biggest beneficiaries; and
1207 of the Defense Authorization Act. In addition, in recent
years Lebanon has benefited from over $60 million in
International Narcotics Control and Law Enforcement Assistance
(INCLE) and about $19 million in Nonproliferation, Anti-
terrorism, Demining, and related programs (NADR).
Economic Support Funds (ESF) have also increased
appreciably. From a baseline of $33.2 million in ESF in FY
2004, the figure jumped to $61.9 million in FY 2006 and $137.4
million in FY 2007. ESF in FY 2008 and 2009 was also
substantial, but less than the 2007 peak figure. Most USAID
funding in Lebanon has been provided through the Office of
Transition Initiatives, which went from zero in FY 2005 for
$39.7 million in FY 2006, and $25.7 million in FY 2007. Food
aid also spiked during FY 2006.
Continuing Oversight Leads to Improved Operations
Because Lebanon has been a major recipient of security
assistance, it has already come under substantial
oversight.\19\ These efforts have recognized the timeliness and
effectiveness of U.S. security assistance, pointing to tactical
data, such as the number of M-113 tanks that were made mission-
capable as a result of Section 1206 assistance, and the number
of bombing raids and medical evacuation flights flown with UH-
1's in the Nahr al-Barid conflict. In addition, the Lebanese
Armed Forces (LAF) earned high marks for following up on the
1206 program with FMF and FMS investment to make 1206-funded
capabilities sustainable over the long term. Not surprisingly,
the reports also identified problems, particularly from the
early days of Section 1206 implementation. The purpose of this
report is not to re-hash previously published findings.
However, staff did ask interlocutors in Lebanon about the
extent to which they have made progress in resolving the more
serious problems identified in these reports. For example:
---------------------------------------------------------------------------
\19\ In addition to the committee's own Embassies as Command Posts
in the Anti-Terror Campaign: A Report to Members of the Committee on
Foreign Relations, United States Senate, of December 15, 2006, see
Interagency Evaluation of the 1206 Global Train and Equip Program,
Inspectors General of the U.S. Department of Defense and U.S.
Department of State, August 31, 2009; as well as Assessments of the
Impact of 1206-Funded Projects in Selected Countries: Lebanon,
Pakistan, Yemen, Sao Tome and Principe, by Eric Thompson and Patricio
Asfura-Heim for CNA Analysis and Solutions, July 2008. The Government
Accountability Office is also currently undertaking a review of Section
1206, at the conclusion of which it will publish its findings.
The DOD and State Inspectors General (IGs) identified a
``lack of cost management'' in one case in which the
USG paid $779,000 in fees to deliver spare parts for
UH-IH helicopters valued at $598,000. In addition, the
IGs determined that over $4 million in Section 1206
assistance had not been obligated prior to the end of
the fiscal year--``a lost opportunity to provide the
vetted and approved assistance.'' According to
representatives of Embassy Beirut's Office of Defense
Cooperation (ODC), in both cases, problems stemmed from
the difficulties associated with obligating the one-
year monies of Section 1206. Although such difficulties
persist, they reported that the Embassy has been
---------------------------------------------------------------------------
successful in streamlining the 1206 process.
The ODC is working with the LAF to overcome one of the
other deficiencies cited in the IGs' report, i.e., a
crippling lack of spare parts and tack shoes for the
LAF's M-113 armored personnel carriers. They have
opened a new case to refurbish the M-113s, since the
spare parts that had been envisioned in an earlier 1206
case ended up being obsolete.
The IGs identified multiple discrepancies between
information available to DSCA and ODC about the status
of 1206 cases. In several cases, DSCA reported that
assistance that had been delivered to the Lebanese
Armed Forces, while ODC reported that such assistance
had not been delivered. The fact that the IGs were not
able to reconcile these differences was telling. DSCA
and ODC/Beirut have been working to address this
problem through weekly conference calls.
Recommendation:
The Administration should develop a centralized
information management system, with appropriate checks
and balances for accuracy, to accurately track the
status of all Section 1206 assistance.
U.S. Assistance to Lebanon (In Millions of Historic Dollars) \16\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2010
2004 2005 2006 2007 2008 2009 Request
--------------------------------------------------------------------------------------------------------------------------------------------------------
Development Assistance.................................... 0.5 3.8 3.5 6.4 0 0 0
Food Aid.................................................. 0 0.1 13.1 0.4 0 0 0
Economic Support Funds.................................... 33.2 18.7 61.9 137.4 44.6 67.5 109.0
Foreign Military Financing................................ 0 0 29.7 4.8+ \17\ 6.9 159.7+ 74 100
220
International Military Education Training................. 0.7 0.8 0.8 0.9 1.5 2.1 2.5
Nonproliferation, Antiterrorism, Demining and Related 0.1 0.1 1.9 9.8 4.7 4.6 6.8
Programs.................................................
International Narcotics Control and Law Enforcement....... 0 0 0 0.2+ \18\ 60 0.5 6.0 20.0
NDAA Section 1206......................................... 0 0 10.5 30.6 15.1 49.3 0
NDAA Section 1207......................................... 0 0 10.0 0 10.0 10.0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\16\ To best reflect how much money was spent (not just planned for), where possible data reflects obligations, per fiscal year. Because of different
U.S. Government accounting practices, however, this is not always possible. Therefore, data for Sections 1206 and 1207, as well as the monies
appropriated in the 2007 and 2009 supplemental spending bills, reflects allocations, with data provided by the State Department's Office of the
Coordinator for Foreign Assistance and CRS. All other data reflects obligations per fiscal year, with data through 2007 per the U.S. Agency for
International Development's Greenbook (http://gbk.eads.usaidallnet.gov). Data since that time comes from the Congressional Research Service (CRS).
\17\ In supplemental funding bills for FYs 2007 and 2009, Lebanon benefited from additional allocations for FMF in the amounts of $220 million and $74
million, respectively.
\18\ Similarly, supplemental funding for FY 2007 allowed for allocation of an additional $60 million in INCLE funding.
Internal and External Coordination
The Embassy demonstrated excellent internal coordination on
foreign assistance, with the Ambassador and DCM actively
overseeing policy and coordination on the full range of issues
associated with multiple security, reconstruction, and
development assistance programs. On security issues, either the
Ambassador or DCM chairs an interagency core group that meets
weekly. In addition, the Embassy convened a group of
international donors of security assistance to coordinate plans
and action in that realm. Staff had the opportunity to meet
with this group, which gathers every six-eight weeks, and which
has sub-groups on border security, rule of law assistance, and
assistance to the LAF. The U.S. Embassy maintains a matrix to
track all international security assistance that it shares with
that group.
As a result of this coordination, there was widespread
agreement among donors that the Lebanese Government, and the
LAF in particular, needs to develop a national security
strategy. In the words of a British defense official, thus far,
the LAF's approach has been tactical -- built around the kinds
of materiel and other assistance it has been able to receive
from donors. His Spanish counterpart agreed, concluding that
the contrary views sometimes expressed by the Defense Minister
and the LAF Commander were reflective of the absence of a grand
strategy. Donors recognized that confessional loyalties are a
key factor.
FMF vs. 1206
U.S. security assistance to Lebanon has made a qualitative
difference in the LAF's counter-terrorism abilities. In the
words of an ODC representative, ``We've improved their
mobility, their ability to communicate, and their ability to
counter terrorist operations. We have helped prepare them for
whatever the next round may hold.'' This self-assessment is
backed up by well-documented examples cited in the above-cited
oversight reports. Asked for a more recent example of a
tangible impact U.S. assistance had had on the ground, Embassy
officers pointed to a recent incident in which LAF troops were
able to use night vision goggles provided under this program to
find and capture seven terrorists affiliated with Fatah al-
Islam who had escaped from Roumieh prison.
The question is: what is the best vehicle for providing
security assistance? The Head of Planning for the LAF, who was
well aware of the differences between the various pots of
money, expressed a preference for 1206, which he perceived as
``more efficient; more timely.'' He indicated that the LAF
looks to FMF for sustainment of 1206-funded equipment. Ideally,
he said, the Government of Lebanon should fund such sustainment
expenses out of its own budget. The current situation in
Lebanon precludes that, however; he explained that the $30
million he has been promised for 2009 will meet only a fraction
of the LAF's equipment and sustainment needs.
Asked about the comparative advantages offered by FMF and
1206, representatives from the Office of Defense Cooperation
indicated that, all things being equal, they preferred FMF as a
vehicle for delivering security assistance. Even though FMF
processes are slower than 1206, they welcomed the
predictability of FMF, which is budgeted for each year, as
opposed to 1206 which are awarded through a competitive
process. Although 1206-funded assistance can be delivered more
quickly, they said that the lack of certainty about whether
individual 1206 program proposals will be approved detracted
from the program's overall effectiveness.
ODC representatives indicated that multi-year funding for
1206 would help make the program more effective.\20\ In the
past, the lengthy lead time associated with preparing 1206
proposals and getting them approved resulted in Embassy
Beirut's 1206-funded programs not being notified to Congress
until May, allowing as little as three months for contracting.
This kind of timeline is unrealistic, they said. In FY 2009,
the Embassy resubmitted proposals that had not been approved
the previous year.
---------------------------------------------------------------------------
\20\ See footnote 12. The referenced CRS report on ``Security
Assistance Reform: Section 1206 Background and Issues for Congress,''
which explains that in the FY 2009 Defense Authorization Act, the
Congress provided authority for Section 1206 funds to be used in
consecutive fiscal years, i.e., funds for a program that begins in one
fiscal year may be used for that program in the next fiscal year.
---------------------------------------------------------------------------
Recommendation:
While this re-submission resulted in a speeding up of
the 1206 process at Embassy Beirut this year, the
tactic of re-submitting 1206 proposals that were not
funded from a previous year raises questions about
immediacy and the extent of the emerging nature of the
threats that those proposals were designed to help the
host country confront.
As an example of the interconnectedness that is sometimes
seen between security assistance provided under Section 1206
and more traditional forms of security assistance, the ODC
Chief noted that he had inquired whether 1206 funds could be
used to cover Joint Combined Exercises and Training (JCET)
programs in the area of counterterrorism. When ODC checked with
counterparts with the Joint Chief of Staff, it was determined
that JCETs, which are funded under Title X, Section 2011
funding, cannot be funded with Section 1206 monies.
Recommendation:
Staff believes that this was the proper call, since
JCETs, even if for the purpose of improving host
countries' counter-terrorism capabilities, represent a
long-term training investment; whereas Section 1206 was
designed to meet short-term, immediate counter-
terrorism needs.
One example of a successful and innovative 1206-funded
assistance program is the provision to the LAF of the
``Lebanese Armed Caravan,'' of up to four Cessna aircraft
modified to provide close air support in counter-terrorism
operations. Staff had the opportunity to make a site visit to
the airfield to view the first such aircraft provided and
receive a briefing on its applications. The assistance package
included a significant training component. This assistance
resulted in a qualitative boost in the LAF's capabilities and
has been extremely well-received.
Asked if there had been cases in which 1206-or FMF-funded
programs had not been well conceived, ODC representatives
pointed to a 1206 case involving D9 armored bulldozers. Because
the armament had been carried out in Israel, the bulldozers
would have been undesirable in Lebanon. As noted above, the
United States opposes the Arab League boycott of Israel, which
Lebanon observes. Fortunately, the Country Team caught the
problem before the case moved forward.
Assistance to the Internal Security Forces
The United States has understandably focused the bulk of
its security assistance on the LAF, which is responsible for
border security, counterterrorism, and national defense. In
addition, however, since FY 2007, the USG has also supported
Lebanon's police, or Internal Security Forces (ISF), which is
responsible for maintaining public order. This assistance,
funded under the International Narcotics Control and Law
Enforcement (INCLE) and Section 1207, is designed to help
professionalize what has been a chronically underfunded
institution lacking in credibility on the Lebanese street.
Staff had the opportunity to visit the INCLE-funded police
training center, including newly refurbished buildings and some
currently under construction. Staff observed an ongoing train-
the-trainer course in community policing, and heard positive
testimonials from the trainees.
According to the head of the ISF academy, the ISF started
out with 7 instructors; as a result of this assistance they now
have 29. The USG-provided courses include a basic training
class for new recruits; a course for supervisors; a tactical
training course; and a community policing program, a new
concept in Lebanon that was thought to be appropriate for high-
tension communities, including, ultimately, Palestinian refugee
camps such as Nahr al-Barid. Police commanders expressed
appreciation for this U.S. assistance, which they credited with
having a positive effect, as evidenced by increased mobility
for police units, which was inferred as signifying greater
acceptance of the ISF on the part of local residents.
Reining in Contractor Expenses
The security and infrastructure realities described above
require that the Embassy rely on contractors to implement many
aspects of U.S. security assistance programs. Because
contractors are not U.S. direct hire employees, they do not
fall under Chief of Mission authority and thus are not required
to stay on the Embassy compound. The downside, according to ODC
representatives, is that an inordinate proportion of U.S.
assistance is devoted to contractors' expenses. ``We've let the
defense contractors go wild'' in the words of one employee. A
new Embassy compound that will be able to accommodate more
official visitors will help mitigate this phenomenon.
Constructive Criticism from Host Government End Users
The LAF's Head of Planning expressed gratitude for U.S.
security assistance, tinged by some frustration over the long
lead time required in some cases. For example, the above-
mentioned need to refurbish over 1200 armored personnel
carriers had taken much longer than had been anticipated. The
provision of spare tires for light trucks had also been
delayed. Some of the radios that had been promised in 2007 were
reported to still not be in use, because they are subject to a
worldwide contract that has not yet been awarded. Uniforms that
had been provided to the LAF Rangers were of the desert
pattern, rather than the preferred urban design, which is more
appropriate for the kind of fighting in which LAF troops are
likely to engage.
IFI Lending
Economic Situation
The political stalemate and sporadic sectarian violence
that Lebanon has seen in the past several years have greatly
hampered economic activity. That said, Lebanon's free market
economy is often credited for its resilience in the face of
adversity, and indeed many international economists have
assessed that the economy has performed reasonably well in the
face of the international financial crisis. Many commentators
site official Government statistics, which project the 2009 GDP
growth rate at 8.5 percent. Similarly, Lebanon has been able to
attract substantial domestic and international investment, in
spite of the international financial crisis.\21\ Some GOL
officials and economic analysts have cast doubt on the
credibility of the official growth rate, however, and they
point out that the increase in investment is reliant on the
country's high interest rates. Moreover, the IMF has pointed
out both publicly and privately that Lebanon's high public debt
to GDP ratio remains a key vulnerability.\22\
---------------------------------------------------------------------------
\21\ According to the IMF's 2009 Article IV Consultation Mission in
Lebanon's Concluding Statement of March 5, 2009 (http://www.imf.org/
external/np/ms/2009/030509.htm), Lebanon's gross reserves for 2009 were
projected at over $20 billion, 47% of which were represented as foreign
currency deposits in the banking system.
\22\ Ibid. IMF officials echoed this sentiment in private meetings
with staff. They pointed out that, although the ratio has fallen to
160% from a high of 180% in 2006, it remained the highest in the world
and is not sustainable over the long term. In a November 2009 briefing
of SFRC staff, State Department officials indicated that the GOL's
debt-GDP ratio had fallen further to about 150%, in part as a result of
exchange rate fluctuations.
---------------------------------------------------------------------------
Overview of International Donor Assistance
The seeds of Lebanon's enduring public debt problem were
sown in the 1990s during the massive rebuilding effort that was
launched after the civil war. Although the Government committed
to a variety of economic reforms as part of the November 2002
Paris II donors conference, at which $4.4 billion in assistance
was pledged, little progress was made in addressing mounting
public debt, which reached a high of about 180 percent of GDP
in 2006. The 2006 war between Israel and Hizballah, followed by
the 2007 fighting at the Nahr al-Barid Palestinian refugee camp
led to further destruction and economic pressures. GOL
development priorities are outlined in a five-year action plan
approved by the Cabinet. Focus areas include: water supply,
waste water management, electricity, irrigation, and public
infrastructure.
Donors' conferences in Stockholm in 2006 and Paris in 2007
(``Paris III'') resulted in about $8 billion in pledges, mostly
concessional in nature.\23\ The lack of budget transparency in
Lebanon makes the percentage of national budget funded by
foreign assistance difficult to determine. Estimates vary
between 25 and 35 percent. Much of the assistance pledged at
Paris III was contingent on the Government meeting agreed
economic reform benchmarks, including the elimination of
government subsidies for electricity and privatizations of
state-owned industries, such as telecommunications. Few of
those benchmarks have been met, however; in particular, Paris
III reforms that required legislative action went unfulfilled
as the Parliament became embroiled in a prolonged political
stalemate. As a result, many pledges have not been
realized.\24\ With respect to the low rate of compliance with
Paris III conditionality, one representative of an
international financial institution questioned whether the
international donor community should have been less ambitious.
---------------------------------------------------------------------------
\23\ Of the approximate $7 billion pledged at Paris III, grants
comprised about $1.5 billion.
\24\ According to the Paris III progress report issued in December
2008, By the end of 2008, 71% ($5.384 billion) of the Paris III pledges
had been signed into agreements.
---------------------------------------------------------------------------
The World Bank
According to the World Bank Country Director, the Bank's
current program in Lebanon is valued at $400 million. The
program is focused on infrastructure and basic services,
including the provision of electricity and water outside of
Beirut; social sector support, including education and health;
and overall financial management, starting with Public
Financial Management (PFM) reforms. The 2007-2009 Interim
Strategy Note (ISN) was comprised mostly of budget support,
driven by the Paris III agenda, but as Bank officials told
staff, the two years of the ISN program did not allow
sufficient time to bring about the kinds of structural reforms
that are needed in the Lebanese economy. They reported that
there is some internal debate about the right ratio between
budget support for structural reforms that are not likely to
materialize in the near future, versus investment lending. Bank
officials reported that they were working on a new Country
Partnership Strategy (CPS), but that no figure had yet been
attached to it. Negotiations could not take place until a new
government had been formed.
Asked about the Bank's greatest successes, Bank officials
told staff that, in the absence of an environment where
structural reforms could be taken on, they were pleased with
the progress they have been able to make through their
technical assistance programs, especially the Public Financial
Management (PFM) project, the aim of which is to bring a
greater degree of transparency to the budget process. They
explained that Lebanon's dual budget process has inherent
disconnects between the planning and execution phases and is
characterized by an overall lack of accountability. Through the
PFM capacity-building project, the Bank has funded the
provision of advisors to work directly in the Prime Minister's
office, as well as the Ministries of Finance and Social
Affairs. Bank staff credited this technical assistance with
helping to build a culture of transparency in the capital
spending process, and with spurring debate at the societal
level about energy sector reform.
Asked to comment on the obstacles to progress, one bank
official pointed to the constraints of the domestic political
situation: ``One lesson we learn over and over again is how
difficult it is to judge what will be politically feasible.''
For example, he said, the second tranche of the last ISN was
never disbursed, because the GOL did not meet expectations with
respect to energy sector reforms in the first tranche. In
addition, they pointed out that all international assistance is
funneled through the Council for Development and
Reconstruction, which falls under the Prime Minister's office.
Some interlocutors faulted the CDR for managing international
assistance for the political benefit of the Prime Minister.
Indeed, in a separate meeting, one GOL official asserted that
the CDR-Prime Ministry relationship effectively circumvents the
prerogatives of services-providing ministries, and is
inconsistent with the intent of the constitution.
The IMF in Lebanon
The IMF opened a regional office in Beirut in January 2008,
a move that, in the words of one official, was designed to
signal improved relations. According to the IMF Resident
Representative, the Fund's principal objective in Lebanon has
been to help the GOL reduce its debt over time, according to
the framework of Paris III. The Fund began an Emergency Post-
conflict Assistance (EPCA) program in 2007, which has since
come to an end. The IMF Resident Director explained that, in
the absence of a government of national unity with whom to
partner on implementing the Paris III agenda, there was no
ongoing program. According to the IMF Resident Representative,
the IMF would like to negotiate a stand-by arrangement, when
possible. In the meantime, cognizant that the lack of a
government could become an excuse for inaction, the Fund has
proposed a staff monitored program.
Oversight
As stated above, the Council for Development and
Reconstruction has a mandate to execute all projects that have
been agreed by the Cabinet; negotiate loans to finance the
Cabinet-approved development goals; and develop overall plans
and programs for sustainable development. Asked about
opportunities for oversight of the foreign assistance process,
GOL officials cited two mechanisms. The Lebanese Parliament
must approve loans over a certain threshold. Indeed, according
to a CDR official, about $1 billion in loans was awaiting
Parliamentary approval at the time of this visit. After
assistance is disbursed, the Lebanese Cour de Comptes (the
equivalent of a Government Accountability Office) conducts
audits.
Recommendation:
As one interlocutor pointed out, the GOL would
benefit from some kind of pre-disbursement audit,
rather than rely on the ex post facto audits of the
Cour de Comptes.
APPENDIXES
----------
Appendix I: Interlocutors in Yemen
Ambassador Stephen Seche and DCM Angie Bryan
Acting Political Section Chief Faith Meyers and Economic
Officer Roland McCay
Special Operations, Central Command Forward Lt. Col. Rick
Prins
Office of Military Cooperation Deputy Lt. Col. Brit Smeal and
FMF Officer Maj. Greg Mitchell
Representatives of Yemeni non-governmental organizations
working on conflict resolution issues
Representatives of international organizations working on
humanitarian assistance and refugee affairs
USAID Mission Director Dr. Jeff Ashley and Deputy Director
Sean Jones
Deputy Finance Minister Jallal Yaqoub
World Bank Resident Director Benson Ateng
International Finance Corporation Country Director Raymond
Conway
Vice Minister of Planning and International Cooperation
Hisham Sharaf
Chairman, Yemeni Coast Guard Brigadier-General Ali Rassea
Yemeni Air Force Col. Sheing
Members of the Embassy Sanaa Military Information Support
Team (MIST)
Appendix II: Interlocutors in Lebanon
Ambassador Michele Sisson and DCM Tom Daughton
Office of Defense Cooperation officials, led by Chief Lt.
Col. Jeffrey Pannaman
Meeting with international donors of security assistance
USAID Mission Director Denise Herbol
Internal Security Forces General Munir Chaaban
Visit to the INL-funded Police Academy with U.S. contractor
training
Visit to the Lebanese Armed Forces' ``Rangers'' base.
Regional Security Officer Paul Bauer
Management Officer Christian Charette
Political/Military Affairs Officer Mike Brennan
IMF Resident Representative Eric Mottu
World Bank Economist Sebnem Akkaya and Donor Coordination
Chief Stefano Mocci
Dr. Wafaa Charafeddine, Council for Development and
Reconstruction
Central Bank Director of Financial Operations Youssef El-
Khalil
Ministry of Finance Director General Alain Bifani
Public Affairs Officer Ryan Gliha
Appendix III: Acronyms
AQAP: Al-Qaeda in the Arabian Peninsula
CG: Consultative Group
CDR: Council for Development and Reconstruction
CPS: Country Partnership Strategy
DSCA: Defense Security Cooperation Agency
DCM: Deputy Chief of Mission
EDA: Excess Defense Articles
EPCA: Emergency Post-conflict Assistance
ESF: Economic Support Funds
FDI: Foreign Direct Investment
FMF: Foreign Military Financing
GDP: Gross Domestic Product
GOL: Government of Lebanon
IFI: International Financial Institution
IDA: International Development Association
INCLE: International
INL: State Department Bureau of International Narcotics and
Law Enforcement Affairs
IMF: International Monetary Fund
ISN: Interim Strategy Note
LAF: Lebanese Armed Forces
LDC: Least Developed Country
LNG: Liquified Natural Gas
MIST: Military Information Support Team
NADR: Nonproliferation, Antiterrorism, Demining and Related
Programs
NEC: New Embassy Compound
ODC or OMC: An Embassy's Office of Defense Cooperation,
sometimes called Office of Military Cooperation
PMF: Public Financial Management
ROYG: Republic of Yemen Government
SOCCENT: Special Operations Component of the U.S. Central
Command
YSOF: Yemeni Special Operations Forces
USAID: U.S. Agency for International Development
USG: U.S. Government