Overview

Yemen has descended into a full–fledged military conflict since the end of March 2015.  Armed Houthis, supported by Saleh forces, entered Sana’a in September 2014 and gradually took over government institutions during the first quarter of 2015. Shortly after, the Hadi Government  left the country.

Following subsequent Houthi’s move towards the southern part of Yemen, on March 26, 2015, a Saudi-led coalition of 10 Arab countries initiated a military campaign to restore President Hadi’s government to power.  The government returned to Aden only in November 2015. Although pro-Hadi forces have made military gains recently with backing of the Arab coalition, the conflict continues unabated. Several peace mediations led by the United Nations in 2015 did not secure a ceasefire agreement.

However, a ceasefire on the Yemen-Saudi Arabia border in March 2016 was a positive sign toward the conflict resolution. In addition, the State of Kuwait has expressed readiness to host the next round of UN facilitated peace talks. Apart from the conflict between the Hadi Government and the Houthis/Saleh forces and its international dimensions, the conflict realm is further complicated by the resurgence of al-Qaida in the Arabian Peninsula and other radical Islamist groups, including ISIS, particularly in the south and the east of the country.

The conflict has exacerbated already challenging economic conditions and a poor humanitarian situation. Official reporting suggests that Yemen’s GDP contracted in 2015 by approximately 28 percent. The escalating conflict since March 2015 has led to widespread disruptions of economic activities and infrastructure destruction.

Since the second quarter of 2015, oil and gas exports have come to a halt. Imports have also contracted, except for critical food and energy imports. The escalated conflict has also resulted in a catastrophic humanitarian emergency; increasing the toll of civilian deaths and causalities across the country, displacing a large number of  people, and severely destroying civilian and public infrastructure. The civilian death toll is estimated to have reached more than 6000, with about 35,000 wounded. As of the end of 2015, 2.5 million people were estimated to be internally displaced in Yemen.

Last Updated: Apr 01, 2016

Following a thorough review of the political and security environment in Yemen, the Bank has suspended all missions to Yemen since January 2015 and all disbursements to projects financed by IDA and Bank managed trust funds since March 11, 2015.

In December 2015, the Bank worked with the Ministry of Public Health and Population, WHO and UNICEF and agreed on arrangements to continue the implementation of the Schistosomiasis Project and the Health and Population Project through these UN agencies, allowing IDA financing of critical drugs and medical supplies to Yemen. The disbursements suspension on other Bank-funded projects will be lifted when the situation in the country is such that the government or any project implementing entity are able to perform their respective obligations under the agreements, and the Bank can ensure appropriate supervision and fiduciary oversight.

Prior to the recent escalation, the World Bank Group’s Interim Strategy Note for FY12-14 focused on protecting the poor by creating short-term jobs, restoring basic services, improving access to social safety nets, and revitalizing livelihoods. The program also aimed to promote growth and improve economic management, as well as improve governance and local services by supporting transparency, accountability, and citizen engagement in the mid-term.

Yemen is eligible for assistance and funding from the International Development Association (IDA). As of mid-March 2016, the Bank’s portfolio consisted of 23 IDA-funded project and 8 recipient-executed trust fund grants, for a total commitment of US$1,072 million, focused on increasing access to basic social services, improving infrastructure, and enhancing governance and institutions. Out of the $1,072 million commitments, an amount of $603 million remains undisbursed.

A new Country Engagement Note that will lay out the Bank’s strategy to support Yemen’s transition towards peace and stability is under preparation and is expected to be completed in the second half of 2016. The Bank strategy will focus on helping Yemen prepare to recover from the conflict and its severe economic and social consequences.  

For the last few months, Bank work in Yemen has been focused on economic work, including finalizing a Country Economic Memorandum, poverty analysis and work in the energy and water, sanitation and hygiene sectors. The Bank has also, together with the UN, the European Union and the Islamic Development Bank, embarked on a dynamic damage and needs assessment (DNA), to accelerate preparation of a full post conflict recovery program when the time comes.

The Bank will continue to work closely with all other partners in Yemen. It will contribute to confidence building measures in the context of peace negotiations and efforts to prepare for future recovery and reconstruction planning exercises in partnership with all regional and international partners. The Bank will explore instruments to provide further help, possibly through partners with field presence.

Last Updated: Apr 01, 2016

Basic Education Development Project(closed December 2012):
The project funded the construction of new classrooms and the 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, the recruiting and training of about 500 female teachers for work in rural areas, and the 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, by the project closing date on December 31, 2012 girls’ enrollment had 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:
Until 2014, the Social Fund for Development (SFD) program had created 24 million working days (which includes Labor Intensive Works and Community and Local Development Programs) and the number of direct beneficiaries has reached about 4.5 million (2.5 million female and 2 million male). These beneficiaries include: 95,699 boys, 75,821 girls and 4,811 children with special needs benefiting from basic schools built through the program; 63,754 households benefiting from improved water sources; and 106,924 people (58 percent female) benefiting through SFD supported microfinance programs.

Public Works Project:
Before the suspension of disbursements in March 2015, 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. 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 of December 2014, over 400,000 people have gained reliable year-round access to centers of economic activity and public services.

Health and Population Project:
Two polio immunization campaigns totaling US$1.75 million have vaccinated 4.3 million children (under 5 years old) in 21 governorates. The Bank has also supported routine, integrated 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.

Yemen Mutual Accountability Framework (YMAF):

A 3-year Yemen MAF became the framework that governed the relationship between the government and donors and defined government priority reforms in return for donor aid.  The Bank led the YMAF government-donor policy dialogue and coordination and assisted the government in mobilizing over US$7 billion in support of the country’s economic transition.  

Last Updated: Apr 01, 2016