by Dr. Sa’ad Addein Bin Taleb
The patronage and rise of corruption was well described in the Yemen Corruption Assessment done by USAID in 2006.
‘A system of grand corruption has emerged over the last several decades thriving on the combination of weak state institutions and a fragmented elite structure. In the absence of strong state institutions, informal patronage networks have proliferated. Indeed, patronage networks cripple what little capacity state institutions have. Allies are rewarded and other elites pacified by grand patronage payoffs in exchange for political quiescence. Yemen’s recent oil wealth is the main source of state patronage. The fact that Yemen’s oil is projected to run out in about a decade’s time suggests that the current structure of corruption is not sustainable. Economic growth, not compatible with grand corruption, is needed for basic needs and services to be met and for the state to be sustainable in the near term. Failing that, significant political instability may be on the horizon.
There are five main elite groups that profit from the structure of corruption in Yemen. The two most important are also the two with the most overlap: tribes and the military-security establishment. Leaders of key tribes constitute the lion’s share of top military and security officers. A similar pattern is found in the security forces. Yemen’s military controls an extensive array of commercial activities, some legal and some extra-legal.’
The report went on to describe that there are some principal mechanisms to distribute patronage. These are the state budget, procurement system, the military-commercial complex and the GPC party machine.
Four years after the report was published, the situation only got worse, which signifies that reform attempts were strongly resisted by the power centers benefitting from the capture of state resources.
The Yemen Corruption Assessment referred to fell short of analyzing the full extent and the typology of state capture in Yemen. The explanation could be the relatively recent description of state capture by researchers. However, reference was made to ‘mogul state’ and ‘bandit state’ . Only in the year 2000 that Hellman, Kauffman and Jones defined state capture with particular reference to transition economies of the ex-Soviet Union. State capture was defined as ‘as the efforts of firms to shape the laws, policies, and regulations of the state to their own advantage by providing illicit private gains to public officials’.
In the Yemen case, it is obvious that the capture goes beyond the definition, although their paper did say that ‘where state capture has distorted reform to create (or preserve) monopolistic structures supported by powerful political interests, the challenge is particularly daunting’.
Rasma Karklins goes further to say that when corruption starts to dominate a regime, any analysis that ignores it is misleading. ‘‘In some cases, the misuse of public power has become so widespread that analysts speak of the “stealing of the state”, or “state capture” and ask ‘how this situation affects the distribution of power and authority in the political system, how it distorts the formal declarations of government policy, how it influences the character and composition of the political elite over time”
Hellman and Kauffman did recognize state capture as ‘the most pernicious and intractable problem in the political economy of reform, few systematic efforts have been made to distinguish its causes and consequences from those of other forms of corruption’.
Yemen represents a particularly pernicious form of state capture where the ‘captor’ is the central political power as opposed to the powerful economic interests described as the captors in the countries (post Soviet transition economies) researched by Hellman, Kaufmann and others. The concentration of power in one institution (president) and the concentration of economy in a single leading sector (petroleum) present added challenges to any attempts of reform. This was described well by Oleksiy Omelyanchuk, that if the economic power is concentrated in the ‘bad’ sectors, then it is more likely that the state will become an easy prey for the vested interests.
The decline of oil wealth over recent years has resulted in sharp decrease in resources available for patronage distribution. It has also resulted in sharp decrease in standard of living and sparked protests in different parts of the country and brought Yemen to the brink of failing as a state. According to the USAID Yemen Corruption Assessment this has lead the elites to choose one of two strategies. The first is ‘to ‘take while the takings are good’ and then exit the system and perhaps the country when oil wealth runs out’. The second would one of enlightened self interests that would encourage reform and increase investment to allow growth of available resources. All indications, so far, point to them taking first choice as it is the path of least resistance.
Yemen may represent a unique case of state capture in a ‘rentier’ state, with economic dependence on a single major natural resource, and facing depletion of such a resource. It also faces depletion of water resources, phenomenal rate of population growth, unemployment and poverty. This bleak outlook has been realized and warned against from, at least, 2003. Yet, no serious action was taken to avert the consequences that have converged in the later years of the decade.
The international community, too, was not interested or focused on the real root causes of the crisis in Yemen.
(Excerpt from paper titled “Resistance to Reform in Yemen: A case of state capture 2010)