WASHINGTON, DC, October 11, 2013 – The World Bank Group and Yemen strengthened their partnership with the signing of two new projects. The Climate Information System and Pilot Program for Climate Resilience Coordination project, a US$19 million grant, will expand the capacity to deliver reliable weather and water information to people throughout Yemen, especially the poor and vulnerable who are most affected by natural disasters. The Financial Infrastructure Development Project, a US$20 million grant from the International Development Agency, the Bank’s arm for the world’s poorest countries, will increase both the stability and transparency of the financial system.
Inger Andersen, Vice President for the Middle East and North Africa represented the World Bank Group and Mohammed Saeed Al-Saadi, Yemen’s Minister of Planning and International Cooperation, and Mohammad Binhumam, Governor of the Central Bank represented Yemen in the signing ceremony held on the sidelines of the Annual Meetings.
“Yemen continues to be affected by climate change which contributes significantly to food insecurity,” said Minister Al-Saadi. “More than 50 percent of Yemen’s labor force work in Agriculture, one of the main sectors impacted. Persistent drought coupled with natural disasters often result in economic hardships to poor communities. We consider this project as top priority. It will provide us with reliable information to establish responsive policies and measures.”
The climate project is the first of three identified under the Pilot Program for Climate Resilience (PPCR) in Yemen, amounting to US$58 million in grants allocated to the country. The Project will improve the accuracy of weather forecasting, introduce new technologies and provide access to higher resolution global weather and climate products. Yemen is especially vulnerable to climate change and the erratic often deadly weather that it produces. The floods of 2008, for example, killed 180 people, displaced 10,000 and caused damage and losses to infrastructure, shelter, and livelihoods equivalent to US$1.6 billion, or six percent of Yemen’s GDP.
“We are very pleased to support Yemen’s efforts at strengthening the resilience of its most vulnerable populations to climate change,” said World Bank Vice President, Inger Andersen. “The financial infrastructure project aims at easing the flow of money and giving banks more accurate means for assessing risk are also important steps toward expanding access to credit.”
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will help establish the credit registry for the Financial Infrastructure Development Project. The Project will also support the creation of a series of data centers and an upgraded electronic payment system that will facilitate a move away from the cash transactions that now dominate the economy. This will allow the Central Bank of Yemen to exercise effective oversight of the financial system. The new payment system will give banks an opportunity to offer new financial products, while the credit registry will make it possible to expand their customer base safely.
“Improved access to information will promote financial inclusion by allowing banks to cater to a more diverse range of customers,” said Governor Binhumam. “Increased transparency will improve our ability to monitor the financial system and ensure Yemen is adhering to international standards for the prevention of corruption and money-laundering.”
The financial infrastructure project also represents the rapid fulfillment of a US$400 million pledge in support of the transition in Yemen made at a donor conference in September, 2012. To date, the World Bank Group has approved over US$300 million of the total amount pledged.