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Yemen, World Bank work to reduce poverty and unemployment

Global Arab Network - - Mohamed Tamer

Sunday, 06 December 2009 15:12

Yemen and World Bank (WB) discussed in Sana’a on Sunday means to alleviate poverty and reducing the unemployment rates in the country.

According to Saba, Yemeni minister of Labour and Social Affaires Amat al-Razaq Hummad held talks with the WB delegation headed by senior advisor Nader Mohammed over the ministry's plans and programs to provide job opportunities for youth and equalize such opportunities for women.

Hummad and Mohammed reviewed the ministry's programs to tackle the childhood problems.

Moreover, the ministry's role in preparing the upcoming five-year development plan was reviewed.

The meeting also discussed mechanisms to carry out the activities and programs under the 2025 strategic vision, concerning the social affairs and labour sectors.

Yemen is facing daunting challenges in an uncertain global and regional environment. Significant progress has been made over the last few years, but living conditions for most of the 22 million Yemenis remain difficult. Yemen's governance structures are complex and recent events have heightened concerns over security issues. Yemen is unlikely to reach most Millennium Development Goals (MDGs) by 2015, and the situation is particularly dire for women.

The Government is implementing a program of economic and governance reforms, but time is of the essence as oil resources are rapidly depleting while the population continues to grow at a fast pace. The sharp fall in world oil prices, and the consequent shrinking in public expenditure, is depressing economic activity. Moreover, while the financial sector has remained relatively unscathed due to its relative insulation, the impact on the real sector is expected to be significant. The Government realizes the pressing need for a comprehensive fiscal adjustment, but the risks of a deterioration of the economic situation is high.

Yemen is now affected by the global economic crisis in spite of the financial sector’s relative insulation. The impact on the real sector is significant through declines in FDI, remittances (especially from the Gulf), and external financing. The sharp fall of oil revenues (75 percent decline between the first quarter of 2008 and the first quarter of 2009), and the consequent shrinking in public expenditure, is also depressing economic activity. The crisis is expected to disproportionately affect the poorest and most vulnerable.

The World Bank Group activities in Yemen are undertaken within the context of the World Bank Group Country Assistance Strategy (CAS) for FY10-FY13, a joint IDA/IFC document discussed by the Board in May 2009. The program outlined under the CAS aims to support the Government’s reform agenda and is articulated around four pillars:
(i) accelerate and diversify economic growth (macroeconomic stability; private sector development; infrastructure; support to non-oil drivers of growth);
(ii) enhance governance (transparency; public finance management; civil service);
(iii) foster human and social development (cross sectoral issues such as gender, youth, and qat; education and health; community development and social protection); and
(iv) manage natural resource scarcity and natural risks (water resources; natural disasters and climate change).

The current IDA portfolio includes 21 active projects with a total net commitment value of about US$996 million, of which about $516 million are yet to be disbursed. The sectoral composition (by value) of the current portfolio is as follows: 55 percent for infrastructure, (of which about half for water infrastructure), 14 percent for agriculture, 21 percent for education/health/social protection and 5 percent for public sector governance. Overall implementation performance is satisfactory.

IDA projects are financed through grants. Projects approved in FY09 are:

· Rural Energy Access ($25 million): The development objectives of the Project are to: (i) improve electricity access of rural populations in the selected project areas in a financially sustainable manner; and (ii) demonstrate the feasibility of increasing the access to electricity of rural households in off-grid areas through implementation of Solar Home Systems (SHS).
· Water Sector Support ($90 million): The objective of the Project is to support implementation of the National Water Sector Strategy and Investment Program (NWSSIP) to: (i) strengthen institutions for sustainable water resources management; (ii) improve community-based water resource management; (iii) increase access to water supply and sanitation services; (iv) increase returns to water use in agriculture; and (v) stabilize and reduce groundwater abstraction for agricultural use in critical water basins.
· Taiz Municipal Flood Protection ($20 million Additional Finance): This additional financing is an extension of the original project to new regions, in response to the October 2008 floods in the eastern part of the country. The project has three development objectives: (i) protecting residents, economic activities and infrastructure from destructive effects of seasonal flooding in Taiz, Hadramout and Al Mahra; (ii) restoring access to critical road infrastructure damaged by the floods; and (iii) strengthening the capacity of local governments and support decentralization.
· Groundwater and Soil Conservation ($15 million Additional Finance): The additional financing for this project will "scale up" the ongoing project which seeks to conserve water in farming areas, especially groundwater, improve recharge and protect watersheds.

Global Arab Network

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