Building a Shared Vision for Economic Reform in Yemen

Following the 2011 popular uprising that toppled a decades-long authoritarian regime, Yemen began transitioning to democracy. The uprising was largely in response to the systemic failure of the previous regime to adopt policies capable of generating economic opportunity.

Private sector and civil society participation in policymaking is key to strengthening Yemen’s business environment, spurring economic growth, and ultimately safeguarding Yemen’s democratic transition. To overcome the poverty, inequality, and patronage that fragments society and undermines the long term viability of the transition process in Yemen civil society, the business community and political leaders need work together to build consensus on a roadmap for reform.

Yemen’s National Dialogue Conference (NDC) is a six-month consultative process composed of 565 delegates, representing rival factions and marginalized groups, designed to include all relevant stakeholders in rebuilding the political and legal framework that governs Yemen. The National Dialogue is unique among countries in the region and its outcome will determine the country’s institutional framework and transitional trajectory.

To help build legitimacy and agreement on economic reforms and ensure buy-in from Yemeni citizens, the private sector, and government officials, the Center for International Private Enterprise (CIPE) and its local partners the Political Development Forum (PDF), the Studies and Economic Media Center (SEMC), and the Human Rights Information & Training Center (HRITC) launched an initiative to strengthen the business community’s capacity to advocate for needed reforms. CIPE partners are leading activities with three distinct constituent groups: PDF with political parties; SEMC with the business community; and HRITC with civil society. As a result, private sector representatives proposed recommendations during the National Dialogue process with the government, which produced policy changes in the areas of security and investment law. Throughout this process, the private sector joined with civil society and political parties to build a unified and inclusive vision for democratic and economic reforms.

Articulating a Unified Vision

Historically Yemen lacked a vision that outlined a path for political and economic reforms and included the viewpoints of important stakeholders. Building a comprehensive vision for economic reforms based on an extensive consultation process with civil society, political parties, and the business community brought legitimacy to economic reforms and strengthened democratic governance in the country. Furthermore, consultations with stakeholders provided buy-in for reforms and created a unified vision for Yemen’s transition process.

The development, outreach, and implementation of the private sector vision was the result of a multi-step process. First, CIPE helped its local partners prepare a draft private sector vision of economic reform based on the views of a select group of business leaders. Next, the partner organizations set up a structure for consultations and engaged in advocacy activities with the wider private sector. The PDF, SEMC and HRITC engaged in parallel outreach activities with civil society groups and government officials in order to build an inclusive vision for economic reforms. Stakeholder recommendations were outlined in a document that created a blueprint for Yemen’s economic transition.

In March 2012, CIPE and SEMC brought together 15 business leaders, including business owners, executives, and leaders from the Yemen Business Club, the Yemeni Chambers of Commerce and Industry, and local Chambers of Commerce. These participants developed a coordinated “Private Sector Vision,” which articulated the business community’s priorities for democratic governance and economic reform in Yemen. The Vision later served as a tool for Yemen’s private sector and civil society to contribute to the political discourse surrounding the National Dialogue Conference.

To increase consensus around the Vision, representatives from each of the governorates were appointed to join a private sector Taskforce. Taskforce representatives met with local business association leaders to identify and incorporate additional suggestions on needed economic reforms. Based on input from these meetings, the Taskforce worked with CIPE and SEMC to draft policy papers on priority issues, including: (1) Security and Rule of Law; (2) Stakeholder participation in the NDC and drafting of the new constitution; (3) Youth and Unemployment; (4) Infrastructure; and, (5) Public-Private Partnership.

Building Support, Gaining Ground

As the Vision initiative’s profile grew, Taskforce members were invited to represent Yemen’s private sector at the Friends of Yemen donors’ conference in Saudi Arabia. At the conference, the Taskforce presented the Vision and proposals for public-private partnership on security sector reform and distribution of external aid. As a result of participation in the conference, the Taskforce is now recognized as the legitimate representative of Yemen’s private sector both inside and outside Yemen.

Continuing to build support for the Vision, CIPE partners and members of the Taskforce met with policymakers and relevant stakeholders to advocate for reforms. They met with Yemen’s Minister of Interior and top security officials to discuss security and rule of law issues and present a policy paper on private sector needs for security sector reform. The Minister and security officials agreed to form a consultative body with the private sector and civil society to engage them in important aspects of security sector reform, such as the lack of professionalism among security forces and the general lack of security.

During a meeting with CIPE partners and Taskforce members, Mohammed Saleh Hussein, head of the General Investment Authority, committed to partner with the private sector and civil society to amend specific laws that undermine the investment environment. Such laws included the 2010 investment law, and byzantine business registration laws that create a disincentive to launch new businesses. After the event, Hussein established a working group to gather feedback from the business community on amendments needed to reform the investment laws and to help craft new policies to promote investment.

Engaging Civil Society and Political Parties

In parallel to SEMC’s work to engage the private sector, HRITC focused on civil society and grassroots stakeholders, including tribal leaders, local councils, media, academics, and youth. First, HRITC surveyed individuals who participated in the 2011 uprising, asking them why they participated in the uprising. The primary factors included unemployment, corruption, low wages, inadequate economic policies, and political marginalization. CIPE and HRITC then held a forum for business and civil society leaders to discuss the economic factors behind the revolution identified in the study and potential solutions to the problems. Next, CIPE and HRITC held conferences across Yemen using the results of the study to guide discussions. These events highlighted links between democracy and economic growth, the importance of public-private partnership, and the role of the private sector in supporting democracy.

While SEMC focused on the business community, and HRITC on civil society, PDF concentrated its efforts on political groups. It worked with the Private Sector Vision taskforce and the Federation of Yemeni Chambers of Commerce and Industry to prepare a policy paper on how the private sector could advance Private Sector Vision objectives in the National Dialogue Conference (NDC) through advocacy and participation in the various NDC sub-committees. The Taskforce then shared the policy paper with leaders from the NDC. CIPE and PDF brought together private sector and political party leaders and helped them reach consensus on how to use reform issues identified in the Private Sector Vision to form an advocacy agenda and build the political parties’ economic reform platforms.

The Business Community: A Partner in Reform

As a result of the work by CIPE and its partners, three representatives from the Taskforce were invited to become the sole representatives of the private sector in the National Dialogue. Members included Taskforce president Ahmed Bazara who was asked to head the Sustainable Development Working Group, one of the nine committees tasked with making recommendations for constitutional changes and the only committee focused on economic issues. This working group used the Private Sector Vision to support its discussions. In this way, the work of CIPE and its partners positioned private sector leaders to be some of the most influential figures shaping the future business environment in the country.

Recognizing the need to empower Yemeni women, CIPE has worked to include women from various sectors of society in its efforts in Yemen. Multiple women serve on the Private Sector Vision Taskforce, including businesswoman Nejat Jumaan who was one of three members of the Taskforce chosen to represent the private sector as a part of Yemen’s National Dialogue Conference Sustainable Development Working Group.

CIPE’s work helped members of the Taskforce gain tremendous credibility and empowered them to engage in the ongoing political transition. A number of government officials, such as Minister of Industry and Trade Saadeddine bin Tableb, Minister of Information Ali Ahmed Al-Imrani, and the new Chairman of the General Investment Authority Yahya S. Mohsen, vowed to continue to support the Taskforce as it contributes to Yemen’s ongoing transition. Members of the Constitution Drafting Committee, including Dr. Maeen Abdulmalik Saeed, Dr. Antelak Al Mutawakil, Dr. Mohammad Musa Al Ameri, Dr. Ahmed Atiya, reached out to the members of the Taskforce to solicit their input during the constitution drafting process.

After the National Dialogue Conference concluded, President Abd Rabbu Mansour Hadi issued a decree setting up a national authority to monitor the implementation of its outcomes. The new committee will work to ensure that the provisions of the NDC are implemented on the ground.

Conclusion

The overarching objective of the initiative undertaken by CIPE and its partners in Yemen has been to build broad-based consensus among diverse stakeholders and create a roadmap for economic and political reform. The private sector Vision that was developed was vital to activities carried out during the National Dialogue Conference process and continues to serve as a rallying point to organize the private sector during the next phases of Yemen’s transition. The unprecedented level of consultation and input with the private sector, civil society, and political parties ensured a high level of legitimacy and buy-in for reforms.

The involvement of the private sector in the National Dialogue is an important achievement because it strengthens the role of business in national policymaking and enables the Yemeni government to tackle mounting economic concerns with a better understanding of the microeconomic conditions in the country. As Yemen enters the next phase of its transition, the private sector will continue to implement reforms through legislative advocacy that strengthen the economic platforms of political parties and directly address concerns identified in the Private Sector Vision.

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