Military spending after the revolution
Yemeni economists criticize the ballooning defense budget, asserting that if the government does not obtain large assistance from donor states at an upcoming conference on Yemen in Riyadh, it will fail to achieve required needs.
The government faces a substantial budget deficit, which, if ignored, will prevent Yemen from paying its future financial obligations, in particular investments, which already depend to a large extent upon foreign assistance, according to Ali Al-Wafi, Yemeni economist and former head of the Financial Committee at the Parliament.
Nevertheless, Yemen faces significant security challenges which necessitate military spending. The government is engaged in a bloody war with Al-Qaeda, northern and southern rebellions, piracy and the aftermath of protests that swept the country and forced former President Ali Abdullah Saleh to step down.
While defense spending has historically been one of the government’s largest expenditures, it has lacked transparency, particularly after the Ministry of Defense issued a directive in August 2005 that prohibited Yemeni journalists from reporting on military matters without prior approval.
No monitoring on military spending
Mustafa Nassar, Chairman of Studies and Economic Media Centre (SEMC), said that the defense budget suffers from huge corruption, pointing out that it is not monitored by any authority, not even the Central Organization for Controlling and Auditing.
"There is a constitutional article that bans the monitoring of the defense and security budget," he said, pointing out that the interim government inherited big burdens and it will make big mistakes if it spends these funds on items appropriated by previous government.
According to a document issued by Wikileaks in 2011, the military budgets in Yemen are not accountable under any civilian auditing authority, and have only limited control over revenues and expenditures within branches of its own administration.
The document made clear that spending in each section of the Defense Ministry is monitored by deputy ministers and enforcement falls to military intelligence.
"There is no legislation or official policy regarding audits of military expenditure. The Defense Ministry is fiercely independent, and not subject to the same auditing rules as other ministries," it added.
Nassar said that the current government was not involved in preparing the 2012 budget. It used budget item tables prepared by past government officials.
Defense minister attempts to control corruption
An official of the Defense Ministry who requested anonymity said that the Ministry embarked on amending defense spending mechanisms after the revolution, stressing that the Defense Ministry has indeed started to control spending and combat corruption.
He said that the Defense Minister exerted great efforts to reorganize and reform the ministry, ruling out, in the meantime, that the Ministry will spend the budget purchasing weapons this year.
He reaffirmed that all military units receive the same salaries and that some specialized units get privileges and rewards, pointing out that militaries across the world grant specialized units further rewards.
The official reiterated that the Defense Ministry plans to appropriate higher salaries to those soldiers positioned along the border and in remote areas.
When asked about disparities of payment for members of the armed force and security services, he said that those persons affiliated with the National Security Organization receive huge salaries, emphasizing that the newly hired ones receive amounts of YR 200,000 per month and that these salaries surmount the salaries of high-ranking officers of the other military and security institutions.
He pointed out that politicians would do best to slow down the efforts exerted by the Defense Ministry to reform the Ministry and get rid of corruption.
Aish Awas, a researcher on defense and security affairs said that the pro and anti-revolution sides recruited large numbers of troops and that they needed new allocations, arguing that the government could not achieve an economic boom without strengthening security and stability, and imposing sovereignty on all the state governorates.
When asked about corruption of the defense and security budget, he said that there have been reforms and big changes after the uprising, pointing out that the current government is comprised of two sides and the corruption will be limited as each side monitors the other.
Yemen now is under control of those countries overseeing the power transfer deal, so that will shrink corruption
Multiple security challenges require extra money
Awass justified the increase of the defense and security budget, saying that Yemen witnesses widespread insecurity, an ongoing fight with Al-Qaeda and multiple rebellions, all which require large amounts of spending.
He also said that the reorganization of the military requires extra financial allocations. The increase in the budget reflects that security is a priority of the government and the president, he added.
In late March, the parliament approved a budget for 2012 that sharply increases spending to meet demands for more jobs and social services after a year of violent political protests.
The budget projected the year's revenue at YR 2.1 trillion (USD 9.7 billion) and spending at about YR 2.7 trillion (USD 12 billion), compared to spending in 2011 of YR1.8 trillion (USD 8.3 billion). That means that the budget deficit is YR 600 billion ($2.7 billion).
The previous Yemeni government used to appropriate high amount to defense to purchase weapons, quash rebels and tackle other security issues nationwide.
In 2006 alone, Yemeni officials made a USD2.3 billion agreement with a Russian company for new fighter aircraft and repairs, as well as another 2009 purchase from Russia exceeding USD1 billion. Both contracts demonstrate that the regime continued to prioritize defense spending over development.