Yemen’s economy, already under significant strain before the crisis, has been severely disrupted by recent events. Reduced availability of fuel, particularly diesel, has aggravated electricity and water shortages. Read More »
After almost a year of crisis, in the wake of the Arab Spring, Yemen has embarked on a political transition based on an agreement brokered by the Gulf Cooperation Council (GCC) in November 2011. As a result, a national dialogue that consists of 565 members from relevant societal groups started in March 2013 and is expected to produce recommendations and action plans at the end of September. These results will be instrumental for the drafting of a new constitution, followed by legislative and presidential elections. Meanwhile, security in Yemen remains fragile.
Yemen’s economic recovery is still vulnerable. After the country slipped into recession in 2011 with Gross Domestic Product (GDP) shrinking by 12.7 percent, the economy is estimated to have grown by 2.4 percent in 2012. Whereas the budget deficit widened to 6.2 percent of GDP in 2012, the current account deficit narrowed to about 1 percent of GDP. Three US$1 billion oil grants from Saudi Arabia helped stabilize the overall macroeconomic situation. Economic prospects will depend on progress on the political and security fronts, continued donor support, and the implementation of critical reforms.
Yemen is one of the poorest countries in the Arab region. Poverty, which was already increasing prior to the latest political crisis, is estimated to have risen further from 42 percent of the population in 2009 to 54.5 percent in 2012. Moreover, the country has one of the highest population growth rates in the world, while being one of the most food insecure countries globally. Approximately 45 percent of the population is food insecure and Yemen’s scarce water resources are far below the regional average.
Updated: September 2013
The World Bank Group (WBG) has taken solid steps to improve and align its program with the emerging priorities on the ground. TheWorld Bank Group Board of Executive Directors endorsed the new Interim Strategy Note (ISN) for Yemen on November 13, 2012. The strategy is expected to accompany Yemen during the transition period and focuses on:
Protecting the poor by creating short-term jobs, restoring basic services, improving access to social safety nets, and revitalizing livelihoods;
Promoting growth and improving economic management; and
Enhancing governance and local service delivery by supporting transparency, accountability, and improved citizen engagement.
Yemen is eligible for assistance and funding from the International Development Association (IDA), which provides grants and highly concessional loans to the poorest countries. As of September 1, 2013, the Bank’s active portfolio consists of 21 projects with about US$900 million in net commitments and focusses on increasing access to basic social services, improving infrastructure, and enhancing governance and institutions. Seven projects have so far been approved since the political transition, with a strong emphasis on:
All projects approved since the political transition total US$317 million and constitute over 80 percent of the pledged US$400 million by the World Bank Group at the Yemen Donors Conference in Riyadh in September 2012.
Deauville Partnership Projects: The World Bank teams helpedYemen access additional funding under the Deauville Partnership Transition Fund – an Enterprise Revitalization and Employment project for US$4.4 million and a Civil Society Organization Partnership project for US$1.72 million are approved. Others focusing on ICT and governance are under preparation.
Mutual Accountability Framework (MDTF): At the request of the government and with financial support from the United Kingdom, Denmark, and USAID, a Multi Donor Trust Fund for US$9 million has been established to provide technical support to the Executive Bureau to improve absorption capacity and fast track the implementation of donor pledges.
Updated: September 2013
The World Bank has had a long history in Yemen, managing a broad range of projects in a variety of sectors. Some selected results include:
Basic Education Development Project: The project funded the construction of 1,996 new classrooms and rehabilitation of 1,765 existing classrooms in 10 governorates, contributing to an 11.3 percent increase in enrollment in those governorates between 2005 and 2010. The project supported about 5,000 Parents’ Councils, the recruiting and training of about 500 female teachers for work in rural areas, and provision of conditional cash transfers to benefit about 35,000 girls. Criteria for cash transfer include family income and girls’ school attendance and performance. Overall, girls’ enrollment increased by 17.5 percent and the Gender Parity Index improved from 0.7 to 0.77 in the 10 governorates targeted by the project during 2005–2010.
Social Fund for Development: The World Bank has provided grant funding and lending assistance toward job creation and income generation: 7.2 million employment days have been created, and the direct beneficiaries have reached 2.5 million people (of which 1.5 million are female) while indirect beneficiaries are 1.5 million (of which 0.8 million are female). Under the Community and Local Development (CLD) program, 2,566 classrooms were built or rehabilitated benefiting 77,401 boys and 55,479 girls, and 30,263 households have benefited from improved water resources. The program also built/improved 303 rural roads.
Public Works Project: Through this effort, over 3,900 sub-projects in the education, health, roads, agriculture, vocational training, social security, and water and sanitation sectors have been delivered to over 14.7 million poor people. In addition, more than 74 months of job opportunities have been created including work for 1900 local contractors and 1250 local consultants.
Rural Access Project: As a result of the World Bank’s involvement in this sector, over 400,000 people have gained reliable year-round access to centers of economic activity and public services.
Health and Population Project: The Bank supported two Polio immunization campaigns for under-five children. The US$1.75 million campaigns have achieved the vaccination of 4.3 million children in 21 governorates. Furthermore, the Bank supported integrated routine outreach sessions to provide immunization, mother and child health, nutrition and disease control services as well as health education to communities with no access to fixed medical facilities.
Schistosomiasis Control Project: Through this project, 9.6 million people have been treated against urinary and intestinal Schistosomiasis, of which 5.4 million were school-aged children.