| Yemen: Integrity Scorecard Report > Sub-Category: Privatization | ||
| Indicators | Score | |
| 53 | Is the privatization process effective? | 75 |
| 54 | Can citizens access the terms and conditions of privatization bids? | 65 |
Indicator and sub-Indicator Details
| 53 | Is the privatization process effective? | |||||||
| 53a: In law, all businesses are eligible to compete for privatized state assets. | ||||||||
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Comments: Among the aims of the law is to encourage private ownership and investment in a competitive manner, so as to prevent monopolization and to achieve broader ownership through public subscription. Article 4 stresses making all the steps in the process public. Participation is not just open to businesses but also to workers of privatized parastatals, unions, cooperatives and other community associations.
References: Law No. 45, 1999, Privatization, Articles 3, 4, [ LINK ]
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| 53b: In law, there are regulations addressing conflicts of interest for government officials involved in privatization. | ||||||||
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Comments: Minimum penalties are two years' imprisonment and a minimum fine of 500,000 rials (US$2500). References: Privatization Law No. 45, 1999, Privatization, Articles 21 (a), (b)
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| 53c: In practice, conflicts of interest regulations for government officials involved in privatization are enforced. | ||||||||
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Comments: As with most Yemini laws, stipulations point one way and enforcement is directed in the other. "Yemen lacks most legal safeguards to protect against conflicts of interest. From first source The Supreme National Anti-Corruption Committee (SNACC) has yet to consider the matter of privatization. Parliament has, on a number of occasions, demanded an investigation of privatization efforts, as some members claim that of the 130 parastatals that were privatized, only 30 were under the auspices of the Higher/Supreme Privatization Committee. MPs point out that there is a lot of suspicion that the whole process has turned into a phenomenal display of favoritism and cronyism. There is little information on how these privatizations were undertaken (i.e., there is no transparency). No reports can be found in the press on any privatization corruption cases under judicial review.
References: [ LINK ]
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| 54 | Can citizens access the terms and conditions of privatization bids? | |||||||
| 54a: In law, citizens can access privatization regulations. | ||||||||
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Comments: The above public media give citizens access to privatization regulations, and the law stresses the need to make all matters concerning privatization accessible to public. However, there is little stipulation on informing the public of the relevant laws or regulations on privatization. Nevertheless, anyone who would wish to get the information would not have difficulty in getting it, especially with some lucrative payment. References: Official Gazette and other official publications
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| 54b: In practice, privatizations are effectively advertised. | ||||||||
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Comments: In talks over Yemen's accession to World Trade Organization membership, a Yemeni representative stated that the Technical Bureau for Privatization publishes announcements of enterprises to be privatized in widely circulated newspapers, as the second source seems to indicate. Notwithstanding the above, the press and Parliament strongly suspect that the announcements are a formality. The process is often done by direct negotiations with certain interest groups or "one family, as the third source states. Personal experience shows a couple of occasions when the senior management of a public corporation asked the researcher to negotiate directly with a foreign firm on a privatization proposal. Even after getting the firm to agree to terms and conditions most favorable Yemen, the deal was shelved, because the firm was not brought by any officials at more senior positions of power and influence. On another occasion, the researcher was seconded as an important senior management officer to a successful and profitable mixed sector enterprise (the government and private sector involved in trading and industrial operations). The then CEO used to arrange deals with certain local, private sector elements and directly sell them the agencies of important international companies that the enterprise owned. The agencies were very lucrative, the company was operating successfully and it was not even a candidate for privatization, as there is private-sector participation in the ownership of the companys capital shares. The decisions were consummated without the approval of the Board of Directors (with members from the private sector), which almost became frozen when the CEO was appointed (by presidential decree) to take charge of the enterprise.
References: www.wtoyemen.org/ar/showonlinefile.aspx?F=1&ID=15 - Arabic (Page 11)
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| 54c: In law, the government is required to publicly announce the results of privatization decisions. | ||||||||
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Comments: Article 4 stipulates (somewhat loosely) that the results of privatization negotiations with all parties should be made accessible to the public. Article 5 requires that the Higher Privatization Committee give details of any privatization effort to the relevant committee in the House of Representative and that copies of the relevant documents associated with the process. The second source points out that several members of Parliament are demanding more investigative effort of the process and are questioning the laxity of the Presidium of Parliament on this matter.
References: Law of Privatization No.45, 1999, Articles 4, 5
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| 54d: In practice, citizens can access privatization regulations within a reasonable time period. | ||||||||
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Comments: The government is required to publish all issued laws and legislations in the Official Gazette. SNACC's website is an excellent and the most up-to-date source of most of pertinent laws (and sometimes bylaws) issued to date.in Arabic. It is more useful in this even more than the website of the Ministry of Legal Affairs. References: Official Gazette Supreme National Anti-Corruption Committee (SNACC), [ LINK ]
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| 54e: In practice, citizens can access privatization regulations at a reasonable cost. | ||||||||
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Comments: How little the cost is depends on where one looks. For example if the researcher had not found the SNACC website, finding the law would have been difficult, time-consuming and more expensive. The researcher could not find a website for the Higher Privatization Committee. References: Official Gazette Supreme National Anti-Corruption Committee (SNACC), [ LINK ])
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