YEMEN'S four-month-old government has run into a confrontation with opposition parties over fuel prices and electoral reform.
At the end of July the oil ministry raised the price of diesel by 70 per cent to 17 riyals (10 US cents) a litre. Bakers and other businesses seized the opportunity to hike their prices by more than the extra cost of fuel.
To soften the impact on government employees, the increase was accompanied by 15 per cent pay rises for civil servants and 25 per cent for the military.
The price rise was part of the IMF-backed reforms which aim to remove subsidies on basic goods. The cost of diesel is a particularly sensitive issue among farmers – who rely on it for their tractors and four-wheel drive vehicles - and the last big increase, in 1998, led to riots.
Officials say the diesel subsidy was costing the government 3.5 billion riyals ($20.7m) a month. According to several Yemeni newspapers, a large proportion of the subsidy was going into the pockets of smugglers who have been selling the bargain-priced fuel in other countries.
Even at 17 riyals a litre, diesel is still only half the price recommeded by the IMF, according to the Yemen Times.
In protest at the increase, seven opposition parties are refusing to co-operate with the government in discussions about changes to Yemen’s election law.
The group includes the Islamic/tribal Islah party - the only opposition party which has substantial representation in parliament. This provides a further signal that Islah’s guarded co-operation with the ruling General People’s Congress party is at an end (see MEI June 1).
The boycott seems intended to frustrate the government’s hopes that all-party consultations will help to legitimise electoral changes.
Opposition parties have, however, made clear their view that any reform should start by tackling the Supreme Elections Committee, which supervises electoral processes and is widely believed to lack independence. At present, the government appears not to be including that in its plans.
Meanwhile, Yemen’s first local government elections, held last February, are proving to be a bigger fiasco than at first appeared.
The election violence reportedly cost at least 45 lives and results are still awaited in some districts.
But now the prime minister, Abd al-Qader Bagammal, has announced that three-quarters of the newly elected councils cannot start operating because of a lack of money, qualified staff and essential equipment.