Yemen's allies believe it is corrupt, "failed" state (News Feature)

By Nehal El-Sherif and Shabtai Gold Dec 5, 2010, 3:07 GMT

Cairo/Berlin - Yemen's neighbour and key ally Saudi Arabia believes that the country is a 'dangerous failed state' where corruption is so rife Riyadh was afraid to offer cash help to bolster the government, according to diplomatic cables released by WikiLeaks.

The situation in the poor Gulf country has increasingly been triggering alarm bells in the West and in neighbouring capitals.

The central government is depicted in the cables as losing its grip over rural parts of the country, lying to parliament and failing to control an al-Qaeda offshoot using mountainous areas to launch attacks.

The latest scare, parcel bombs sent from Yemen but intercepted in October before reaching addresses in the United States, came atop the Christmas Day attempt in 2009 by Islamists based in the Arab country to blow up an airliner over Detroit.

President Ali Abdullah Saleh is losing control and al-Qaeda's presence in Yemen is exceptionally dangerous as 'many Yemenis were more sympathetic to al-Qaeda's goals than were the Afghans,' the Saudis believe, according to the US cables.

Riyadh's Minister of Interior Mohamed bin Nayef told US diplomats that Saleh has a myopic outlook, as his 'vision of Yemen has shrunk to Sana'a,' the capital.

Nayef also said that Saudi assistance to Yemen was not in the form of cash payments, 'since cash tended to end up in Swiss banks,' according to one cable.

The United Arab Emirates, another wealthy Gulf neighbour, said 'a 'failed state' could emerge on the Arabian Peninsula, with terrorist partners and Iranian influence further poisoning the mix,' in a separate cable.

Gulf countries warned that Yemen could become another Afghanistan or Somalia on several occasions, according to the US diplomats writing the confidential memos.

Al-Qaeda in the Arabian Peninsula is the latest cause of concern, after being formed in January 2009 through a merger between the Yemen and Saudi Arabia offshoots, making the group a regional and even global worry.

Saleh, 68, is the long-serving president of poverty-stricken Yemen, ruling for more than 32 years and hanging on to power despite several ongoing wars in his land. His authoritarian style, sometimes delivered in a jovial manner, has often raised eyebrows among diplomats.

In a backhanded demand for more aid - which the US has indeed increased significantly over the course of the last year, especially for military expenses - Saleh said he 'would like to be more satisfied in the future.'

Almost agreeing with his critics, the president warned - or maybe threatened - visiting US guests that his country would be 'worse than Somalia' if his aid requests were not moved forward.

International aid groups say over 40 per cent of Yemenis live below the poverty line and the country is also facing a water crisis.

Saleh at points almost admits that he has lost control, saying that smugglers bribe both Saudi and Yemeni officials, even as he pledged a crackdown on the porous borders.

'Tell (Djiboutian President) Ismail Guelleh that I don't care if he smuggles whiskey into Yemen - provided it's good whiskey - but not drugs or weapons,' Saleh joked in a meeting with senior US military officials.

Dispatches also reveal Saleh's deal, meant to be kept secret, to let the US launch missile attacks on al-Qaeda in the Arabian Peninsula, then claim otherwise to his own lawmakers.

'We'll continue saying the bombs are ours, not yours,' Saleh said, prompting Deputy Prime Minister Rashad al-Alimi to joke that he had just 'lied' by telling Parliament that the bombs were US-made but deployed by Yemen.

The cables also revealed signs of Gulf concern over alleged Iranian support for the Shiite Houthi rebels based in northern Yemen, despite US officials questioning the charges and asking their allies for concrete proof.

But the Arabs, wary of a strong Tehran, often repeated their allegations, and similar reports circulated at the time of the last major offensive against the Houthis earlier this year.

Importantly, the cables show the Houthi front is just one of several, with foreign interference already common in a country that might yet fail in solving its troubles, as a worried world watches.

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