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Yemen Overview

After almost a year of crisis, Yemen has embarked on a political transition based on an agreement brokered by the Gulf Cooperation Council (GCC) in November 2011. Yemen started a 565-member National Dialogue process in March 2013, which concluded in January 2014 in the decision to transform Yemen into a Federal State. 

A special committee appointed by the National Dialogue Commission determined there will be six entities under the Yemeni Federal State. The Commission also approved a Guarantee Document, detailing a road map for the implementation of its recommendations, including details of the extension of the political transition period, constitutional redrafting, preparation of basic laws to support a federal state, and parliamentary and presidential elections. The security situation, meanwhile, remains fragile.

Yemen’s economic recovery is also vulnerable: after the country slipped into recession in 2011 with GDP shrinking by 12.7%, the economy grew by an estimated 2.4% in 2012. The budget deficit had widened to 6.2 % of GDP in 2012, and the current account deficit had narrowed to about 1% of GDP. Three oil grants, US$1 billion each, 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  implementation of critical reforms.

 Yemen is one of the poorest countries in the Arab world. Poverty, which was already increasing prior to the latest political crisis  has risen further from 42% of the population in 2009, to 54.5% in 2012. Yemen has one of the highest population growth rates in the world, and is one of the most food insecure countries globally. Approximately 45% of the population is food insecure and Yemen’s scarce water resources are far below the regional average. 

Last Updated: Mar 17, 2014

The World Bank Group has taken solid steps to improve and align its program with the emerging priorities on the ground. The Bank has endorsed a new  Interim Strategy Note (ISN) to help Yemen during the transition period, which focuses on protecting the poor by creating short-term jobs, restoring basic services, improving access to social safety nets, and revitalizing livelihoods. It also aims to promote growth and improve economic management, as well as enhance governance and local services 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 some of the world’s poorest countries. In January 2014, the Bank’s active portfolio consisted of 32 projects (including recipient-executed trust funds) with about US$900 million in net commitments, focused 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 enhancing access to basic social services and safety nets.

In order to alleviate hardship for the poorest, a US$100 million Emergency Recovery Grant will provide cash transfers for around 400,000 households. The Labor Intensive Public Works Project (US$61 million) and the Additional Financing for Social Fund for Development (US$25) million were approved for the creation of labor intensive work providing employment for the poor, particularly the youth. To improve access to basic education, the Bank also approved US$66 million for the Second Basic Education Development Project.

Improving infrastructure: The US$40 million Road Asset Management Project was approved to improve road conditions and maintenance.

Strengthening institutions and governance: The US$20 million Financial Infrastructure Project was approved to improve transactions in the financial system, while Additional Financing for Public Finance Management of US$5 million was approved to improve the efficiency and transparency of the management of public finances.

Projects approved since the political transition total US$317 million and constitute over 80% of the US$400 million pledged by the World Bank Group at the Yemen Donors Conference in Riyadh in September 2012.

Deauville Partnership Projects: World Bank teams helped Yemen access additional funding under the Deauville Partnership Transition Fund: an Enterprise Revitalization & Employment project for US$4.4 million, a Civil Society Organization Partnership project for US$1.72 million, and a Accountability Enhancement Project for US$ 6 million have already been approved, and others are under preparation.

Mutual Accountability Framework: At the request of the Yemeni 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.

The World Bank has 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 new classrooms and rehabilitation of existing classrooms in 10 governorates, contributing to an 11.3 % increase in student enrollment in those governorates between 2005 and 2010. The project supported about 5,000 Parents’ Councils, 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 transfers include family income and girls’ school attendance and performance. Overall, girls’ enrollment increased by 17.5% and the Gender Parity Index improved from 0.7 to 0.77 in the 10 governorates targeted by the project.

Social Fund for Development: The World Bank has provided grant funding and lending for job creation and income generation: 7.2 million employment days have been created, and the number of direct beneficiaries has reached 2.5 million (of which 1.5 million are female) with 1.5 million indirect beneficiaries, of which 0.8 million are female.  Under the Community and Local Development program, 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 or 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, 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 1,900 local contractors and 1,250 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 vaccinated 4.3 million children in 21 governorates. The Bank has also supported integrated routine outreach sessions to provide immunization, mother and child health, and nutrition and disease control services, as well as health education to communities with no access to fixed medical facilities.  

Schistosomiasis Control: Through this project, 9.6 million people have been treated against a urinary and intestinal parasite, also known as bilharzia, of which 5.4 million were school-aged children.

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Find out what the Bank Group's branches are doing in Yemen.