The key reality, I believe, is captured in this one section:

In December, the USAID mission, which originally endorsed the NDI program, sent an e-mail saying that because of "the sensitivity of the project," NDI had to agree to "coordinate very closely with the U.S. Embassy and USAID in order to manage potential risks" from the program. These risks included "increased tensions between tribal groups and the government, and the possibility of strained relations" between the Yemeni government and the United States.

What the e-mail didn't say, but what was becoming clear, was that President Saleh was becoming increasingly suspicious of this little program. One of the ways Saleh has remained in power since 1978 has been by keeping the tribes divided, and a program that would unite sheiks from a dozen tribes and three governorates -- sheiks in control of about 25,000 men armed with machine guns, grenades and heavy artillery -- would certainly be a "potential risk." Would such a program affect Saleh's cooperation on counterterrorism if it went forward?

They forgot tanks.

State interests.

However, some other observations:

But she also was wondering whether these sheiks would stick it out through the long slog of becoming an NGO. She looked at a sheik who, in addition to his handgun, was wearing a jewel-encrusted watch, probably bought with the monthly stipends many sheiks discreetly receive every month from Saudi Arabia. Would he care about writing proper bylaws?

If one has to ask the question, one is a fool. The answer is no, or only so far as it gets money.

Words on paper.

How about the one who can't read or write and has several wives, one of whom he married when she was 11? Could he learn proper accounting methods?

Kha.

But this is the more revealing part:

In the beginning, all they had wanted to do was form some kind of committee to take on the problem of revenge killings; now, 15 months later, here they were attending a three-day workshop on the Arabian Sea because that is what an American told them they needed to do. "You have to meet certain requirements," she had said to some of them one day, explaining that no organization would give them money until they were established as a legitimate NGO -- so they became an NGO. "How many of you have used Excel before?" she had asked another time, explaining the need to keep books -- so they learned about the computer program.

So in the place of taking something simple that might work, one had to load up with an overly complicated, inappropriate vehicle for an entirely different world.

There is foreign aid in a nutshell.

By the way, the article makes an error, 'Ajouz means old man.