Fighting corruption and carrying out reforms... An international thorn in the throat of the Yemeni government
English - Sunday 01 January 2023 الساعة 08:09 am
Aden, NewsYemen, exclusive:
The Supreme National Commission for Combating Corruption in Yemen made a new move, during which it affirmed its endeavor to conclude a partnership agreement with the National Organization for Transparency, Financial and Administrative Reform, and it says about it (the commission) that it aims to unify efforts to combat corruption in all its forms and directions.
Slow steps are being taken by the Commission - a governmental body - in light of the increasing domestic and international pressures, as well as the urgent conditions set by banks, international funds, donors to the government, and the Presidential Leadership Council to continue providing support to Yemen. Those requirements focused on the need to address financial and institutional imbalances, combat corruption, money laundering and terrorist financing.
Yemen's deteriorating situation was reflected in international indicators and reports that monitored the continuous decline in the business performance environment index, the growth of corruption, during the years of the war waged by the Houthi militia, which was a major cause of the deterioration of economic conditions and the collapse of the banking and financial system.
The war also contributed significantly to the loss of the regulatory and legislative system's strength to combat money laundering and terrorist financing. The banking sector is witnessing inflation and widening of the financial gap and channels of waste and money laundering. In parallel with these imbalances, the percentage of the hidden economy increased to more than 85% of the GDP, in light of the low percentage of public revenues collected.
A daunting task
It cannot be ignored that the futile Houthi war that has been going on for eight years has contributed greatly to the spread of corruption of all kinds. Starting with the weakening of the oversight and accountability authorities, and the emergence of many parties and tampering with the wealth and money of the people. This group has become a waste of wealth and funds for their own interests without any control or accountability.
Perhaps the most important reasons behind the Yemeni economic crisis is the plundering of wealth and the smuggling of money, as the war opened wide doors for illicit gain, smuggling money and investing it outside Yemen, and exploiting the public office to practice various types of corruption and financial waste. This made it difficult for any upcoming government efforts to recover any money and stop the plundering of wealth.
Financial statistics published by economic reports revealed that the volume of looted funds exceeds 40 billion dollars, and the percentage of money laundered by illegal and numerous means is no less than 60 percent.
Many local and international economic reports revealed many imbalances faced by the financial sector in Yemen, especially after the Houthis took control of power and the outbreak of war. These imbalances contributed greatly to the spread of corruption, money laundering and terrorist financing. This prompted most of the international donors and financial and banking funds to place harsh conditions on the Yemeni government, on top of which is financial and administrative reform, as a priority for financing their programs directed at Yemen.
A report issued by the Yemeni Economic Media and Studies Center in mid-June 2022 showed that the spread of money laundering has grown as a result of the war. He explained that money laundering takes different methods, methods and practices, which affects the financial and monetary policy of Yemen, and causes damage to the reputation of the banking sector and the leakage of cash, due to the spread of vessels that attract illegal funds and the reluctance of donors to help the Central Bank of Yemen.
With great international pressure, the Yemeni government has reactivated the role of the Supreme National Commission for Combating Corruption and given it great powers to carry out its tasks in dealing with the epidemic spreading in the country. Although the task is arduous and difficult to find a coherent system that fights corruption and promotes the values of integrity and transparency in various public and private institutions. However, government steps are moving slowly to absorb the proposed financial and administrative reforms, with the aim of gaining the confidence of international parties and donors, and restoring normal relations with these parties.
Slow government steps
And the moves taken by the government remain insufficient and convincing for the international community and the international financial and banking agencies that are waiting for serious steps to meet their requirements, especially since the disruption of state apparatuses still exists, and corruption continues to greatly penetrate it, and it has reached the creation of many outlets for smuggling money and illicit gain, which It is difficult to quantify them in light of the current situation
Perhaps the most prominent of the recent decisions issued last December, is the decision of the Ministry of Finance to close all financial accounts that were opened by governmental and revenue institutions outside the Central Bank of Yemen, as well as stopping the exchange of savings, and stopping the direct exchange of revenues.
The directive also included restricting grants, gifts and donations, in addition to rationalizing expenditures, and submitting periodic reports on financial accounts in order to take the necessary measures.
The economic journalist, Majed Al-Daari, said: There is no logical importance in directing the Ministry of Finance to close any government accounts outside the Central Bank of Yemen in Aden, since this directive is not the first, but it was preceded by three similar directives that went unnoticed. As long as the process of activating the role of the oversight and inspection apparatus and the Anti-Corruption Commission has not been completed to date in accordance with the requirements of the Riyadh Agreement.
He added: This important directive, according to it, coincided with the state not essentially needing any government accounts in banks or exchange companies, as a result of the lack of any importance to them, due to the continued suspension of oil exports, the absence of resources, and the rebellion of the provinces from supplying their resources to the Central Bank, which today is unable to pay the salaries of government employees legitimacy.
The finance decision came only days after the Central Bank of Yemen in Aden announced the freezing and banning of bank accounts of companies, individuals and entities that finance the Houthi militia, including oil, import and exchange companies, and blacklisting them. It was a serious banking step in order to prevent manipulation and speculation in the local currency.
The freezing of accounts and the ban affected 12 companies, and came based on the decision of the Public Prosecution to include entities in the terrorism list to combat money laundering and terrorist financing.
Activate oversight
During the past years, many government institutions and sectors opened bank accounts in private banks and local exchange companies, and these accounts continued to receive a lot of semi-daily and monthly revenues away from the Central Bank and the Ministry of Finance. These accounts represented one of the methods of spreading corruption and weakening public revenues.
The Supreme National Commission for Combating Corruption confirmed in previous statements the continuation of its efforts to activate all oversight and judicial roles in order to combat and prevent corruption and enhance integrity. She called on all partners, civil society organizations, the private sector, and all state agencies and institutions for a true partnership to fight corruption, uproot it from its roots, and protect public resources, funds, and property.
The Yemeni government has also reaffirmed the continuation of taking serious and transparent decisions and stances regarding addressing corruption and combating money laundering and financing terrorism, vowing a violent war against corruption through what it called institutional frameworks, in reference to the government body to fight corruption. Promising accountability and accountability, without any immunity or protection for any official proven to be involved in corruption.
The importance of activating oversight emerged during the meeting of the Prime Minister, Dr. Moein Abdel-Malik, with the head of the Central Organization for Control and Accountability, Judge Abu Bakr Al-Saqqaf. Emphasis was placed on the intensification and expansion of the agency's work to include all state institutions without exception for oversight and auditing, detecting any cases of corruption and referring them to the relevant judicial authorities.
Discussions also touched on enhancing integration and coordination between state institutions and the Central Agency for Control and Accounting, as it is a key partner in the state's general reform process, and based on its role in achieving effective control over state funds and following up on the performance of executive agencies for their responsibilities, in addition to the policies and interventions required to confirm the agency's active role in Exposing cases of corruption and activating oversight of the performance of state institutions
The Prime Minister stressed that transparency, oversight and governance are an essential part of strengthening the work of state institutions, and the government's determination, with the support of the Presidential Leadership Council, to correct imbalances in the various sectors of the state, and to activate the rule of law over everyone without exception. He urged the Central Organization for Control and Accounting to complete the review of the work of all economic units, submit the results of the audit reports, and refer them to the competent authorities, explaining that the government will not tolerate any party that refuses to provide its financial data to the concerned agencies for review, work with transparency and responsibility, and correct all imbalances, whether financial or administrative.
Coping with stressors
Although the internal indicators are still low in terms of the government's fight against corruption, and with the continuation of the crimes of looting, levies, the imposition of royalties, and the plundering of public revenues and wealth, government financial and monetary institutions continue to face great pressures in an attempt to absorb international conditions and fulfill the obligations presented.
The financial disintegration of the economy between the areas under the control of the internationally recognized Yemeni government and the Iran-backed Houthi militia has made banks operating in Yemen under the pressures and urgent demands put forward by international financial institutions to the government, especially with regard to activating transparency and financial oversight procedures.
Recently, the Yemeni government has sent circulars and directives to banks and banks requesting them to cooperate with the supervision sector in the central bank in the capital, Aden, to ensure their compliance with the standards and rules of compliance for combating money laundering and terrorist financing.
The government directives were the results of the meetings and meetings that the Yemeni government conducted with regional and international banks during the continuous visits of the Governor of the Central Bank and the Ministers of Planning, International Cooperation and Finance. The directives aim to restore the movement of banking transactions and tighten control over banks and non-governmental banks and the extent of their compliance with the rules and standards for combating money laundering and terrorist financing.
After the outbreak of the war in 2015, and the division of the Central Bank of Yemen between Sanaa and Aden, Yemeni banks assumed responsibility for economic, banking and commercial transactions, such as opening letters of credit for the import of basic food and consumer goods, and the import of fuel and other basic needs in the country.
