Critics say 2014 budget not in line with country’s trajectory

Published on 16 January 2014 in News
Ali Saeed (author)

Ali Saeed


hide

SANA’A Jan 15—Yemen’s Parliament this week approved a budget of YR2.88 trillion ($13.4 billion) for 2014, about a four percent increase from the 2013’s budget plan, according to the Ministry of Finance.

The new budget plan projected an estimated income, from oil revenues and taxes, at around YR2.2 trillion ($10.2 billion), along with a deficit of around YR6.8 billion ($3.16 billion).

“Nothing changed in the preparation method of the budget plan [this year], which is based on estimations in expenditure and income,” said Mohammed Jubran, an economics professor at Sana’a University.

Since it’s popular anti-government uprising that ousted former President Ali Abdullah Saleh in 2011, Yemen has been struggling with a tough political transition and an ailing economy. But economists say that the 2014 budget isn’t showing much in terms of economic growth.  

In comparison to last year’s budget, estimated revenues have only increased by YR120 billion ($ 55.8 million), Jubran said.

“This significantly demonstrates that the government is unable to develop resources to collect lost revenues,” he added.

In late December, the government attempted to enact a reform on the pricing of oil to generate revenue. Officials announced that in 2014, Yemen’s exported gas would be sold at market price. However, this was not reflected in the revenues section of the budget plan. Instead, gas and oil revenues, according to the 2014 budget plan, decreased by around YR40 billion ($186 million).

The budget plan also increased its expenditures by YR117 billion, compared to the 2013. Jubran said the government should use half of its expenditure budget to pay off its accumulated interest on debts it owes to private banks.

Other highlights of the budget include the government’s plan to pay YR 2.4 billion ($11.3 million) to the Tribes’ Affairs Authority (monthly salaries for tribal leaders) in 2014. In comparison, the budget projected for Yemen’s Coast Guard Authority is YR 1.6 billion ($7.2 million).

Some of are highly critical of the budget seemingly overlooking an institution like the Coast Guard.  Yemen has around 2,000 km. of coastline and often serves as a transit country for smugglers bringing migrants, drugs and weapons into the region.

“[The difference between investment in securing the coastline and paying the tribal leaders] shows that the old regime’s mindset still rules,” said Mueen Abdulmalik, a National Dialogue Conference (NDC) delegate.   

The NDC was a stipulation of Yemen’s transitional process and is aimed at setting the country on a path towards national elections and a rewritten constitution. Originally slated to end in September, the conference has been extended several times.  

Abdulmalik is very critical of politicians preparing the budget, saying  they “have no competence,” and “they are not aware of the political developments happening in the country.”

“The budget was approved faraway from what is taking place in the country. It also does not reflect the political trend toward decentralization,” Abdulmalik said. He says the current version of the budget does not support Yemen’s political transition nor people’s aspiration for change.

“The NDC outcomes need to change the budget in a way that ensures a move towards federalism,” he said.