Land The process by which land is sold and registered is reportedly murky and lacking in transparency, and these systematic weaknesses provide opportunities for widespread corruption.
Oil During the Saleh era, the
oil and gas industry was supposedly "the main source of export revenue and government finance." Saleh personally approved "all major deals and production-sharing agreements" with foreign oil firms. The government-owned
Yemen Oil and Gas Corporation "dominated the import and distribution of petroleum products, and delegated monopoly privileges to a major operator, Tawfiq Abdulraheem ," who was close to Saleh. Corruption in this sector principally involved the awarding of service contracts and import/export deals. In addition, "Saleh allocated state-subsidized fuel products on a quota basis to his relatives and political allies, who were free to charge a substantial mark-up to
wholesale domestic buyers, or trade their allocated quota overseas at international market prices." Saleh also allowed certain businessmen "to claim subsidies on non-existent fuel imports, on the basis of falsified import documents." This practice cost the national treasury dearly, although YECO profited greatly from it. "Oil-related corruption was also endemic in the military, with officers benefiting directly from fuel allocated to their units and using military transport infrastructure to move it both within Yemen and to foreign markets."
The Wall Street Journal reported in 2010 that the
US Justice Department was investigating
Schlumberger, an oil firm, for corruption connected to its activities in Yemen. In 2002, Schlumberger had bid on a contract with state-run PEPA via a local agent, Zonic Investments, run by Tawfiq Saleh Abdullah Saleh, and paid a "signing bonus" of $500,000 to an offshore subsidiary of Zonic in addition to disbursing an additional $1.38 million to PEPA. Also, two PEPA officials rented cars to Schlumberger at artificially high prices, and Dhakwan Petroleum and Mineral Services, owned by Ali Mohsin, which imported and exported equipment for Schlumberg, received $280,000 for processing paperwork. The Journal stated that when Schlumberger sought to end its arrangement with Dhakwan, "it became impossible for it to import equipment into Yemen." Fuel subsidies in Yemen, according to the
IMF, open substantial opportunities for corruption. These subsidies chiefly benefit rich Yemenis, encourage excess consumption, and provide opportunities for smuggling.
Medicine At a typical hospital, according to
IRIN News, doctors and other staff are, according to one employee, mostly hired on the basis of connections to the local sheikh, without regard to qualifications. Many of those who are hired are either "ghost workers" – i.e., do not exist – or do not actually show up for work. The latter receive their own paychecks, while the sheikh takes those for the "ghost workers." Medical funding rarely makes it past the employees dividing it between themselves. Another medical professional described a similar situation in a hospital in
Sanaa, where a fellow aid worker paid
graft on a daily basis in cooperation with the Yemeni military officer in charge of the facility. The corrupt activity at this hospital involved over-billing an aid agency. ''IRIN News's'' interviewee chose not to report the corruption because he feared that doing so could thwart investors, which would cause the hospital to fall apart. Colleagues agreed that
whistleblowing in this case would likely be pointless, given the military's impunity. Moreover, these medical professionals risked losing their jobs, or worse, for defying authority.
Banking Yemen's central bank has raised much of its capital from private banks "by selling treasury bills and bonds into the domestic market at generous interest rates." This resulted, allegedly, in excellent profits for elite businessmen who held most of the government's debt but deterred other businesspersons from applying for loans. ==Economic growth==