Government Decides to Cut Military Budget [Archives:2000/30/Front Page]

Minister of Planning and Development, Ahmed Sofan stated in an interview with Reuters last week that the newly-signed border deal with Saudi Arabia would help Yemen cut military spending and channel state funds into social and economic development. He stated that annual military spending in 1997 and 1998 had consumed up to 15 percent of Yemen’s gross domestic product (GDP) and over 32 percent of the state budget. Reports said that the cut could reach as high as 50% of the actual military budget, despite the fact that salaries of military officers were increased by 40%.
“The implementation of the border agreement will no doubt put a limit on military and security spending, enhance the general finances of the state, increase public savings and channel spendings for development,” Sofan said. He said Yemeni military spending reached its peak in 1997 and 1998 during heightened border tensions with Saudi Arabia. He declined to give figures on the expected military spending cuts, which he said were a state secret. “This (dispute), of course, badly affected the allocation of funds for public investments, development and services projects,” Sofan said.
Under the deal, Saudi Arabia and Yemen agreed to work on developing joint investments, especially in oil, gas and petrochemicals, Sofan said. He said Yemen planned to suggest setting up of coastal joint ventures with its neighbor. Yemen also wants to establish rail links with other Arab states through Saudi Arabia. Sofan said he expected discussions with Saudi Arabia soon on other issues including arrangements for the employment of Yemeni laborers in the kingdom, financing development projects in Yemen and encouraging Yemeni agricultural exports to Saudi Arabia.

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