The World Bank In Yemen

Yemen has long been one of the poorest countries in the Middle East and North Africa (MENA) and is now one of the world’s worst humanitarian crises. The fighting raging since early 2015 has devastated its economy, leading to severe food insecurity, and destroying critical infrastructure. The UN estimated that 24.1 million people in 2023 were at risk of hunger and disease, and roughly 14 million were in acute need of assistance.

Despite government reforms aimed at stabilizing the Yemeni rial, in 2022, the exchange rate continued to depreciate to historic lows, driving significant increases in food prices and pushing more people into extreme poverty. Socioeconomic conditions have deteriorated rapidly, affected by trade disruptions, severe fuel supply shortages, and reduced humanitarian operations. Growing violence and fragmented macroeconomic policies have further strained fragile economic conditions. An unprecedented humanitarian crisis persists, aggravated by COVID-19 and the global rise in commodity prices, leaving many Yemenis dependent on relief and remittances.

Distortions created by fragmented institutions and diverging rules across control lines have compounded a crisis created by protracted conflict, the interruption of essential services, and rising fuel and food prices. The impact on Yemen's population has been devastating.

Around 18 million Yemenis are without safe water and sanitation. A staggering 16.2 million people require urgent emergency assistance because of food insecurity and even malnutrition. As a result, Yemen has been grappling with recurring outbreaks of preventable diseases such as cholera, diphtheria, measles, and dengue fever. Waves of currency depreciations in 2018 and 2019 created lasting inflationary pressure on the Yemeni riyal, exacerbating the humanitarian crisis. The disruption of infrastructure and financial services has severely affected private sector activity. Many of the more than 40% of Yemeni households that find it difficult to buy even the minimum amount of food have also lost their primary source of income. Poverty worsened even before the crisis, affecting almost half of Yemen’s population of about 29 million. Now it affects 71% to 78% of Yemenis, with women being the most vulnerable.

Prospects for economic improvements in 2023 and beyond will depend on rapid advancements in the political and security situation and on a cessation of hostilities and political reconciliation allowing for a rebuilding of Yemen’s economy and social fabric. Days after the UN announced a two-month truce at the beginning of Ramadan in April 2022, Yemen’s President Abdrabbuh Mansur Hadi transferred authority to a “Presidential Leadership Council” (PLC) following talks sponsored by the Gulf Cooperation Council in Riyadh. The Kingdom of Saudi Arabia and the United Arab Emirates announced an economic package worth US$3 billion and US$300 million in humanitarian support. The economic package can help cover the deficit of the external account, stabilize the exchange rate, and ease upward pressure on prices. However, such one-off windfalls do not eliminate the need for structural reforms.

Last Updated: Mar 21, 2023

The overarching goal of the World Bank Group’s Country Engagement Strategy for Yemen 2022–2023  is to support the people of Yemen and preserve the institutions that serve them. The WBG will stay engaged in Yemen across multiple possible scenarios, with a focus on: (i) basic service delivery and human capital; and (ii) food security, resilience, and livelihood opportunities. At the heart of the humanitarian-development nexus, institutional preservation will remain a fundamental objective of the WBG program across the two tracks.

The World Bank — through its concessional arm, the International Development Association (IDA) — has been providing large‑scale emergency grants to Yemen during the conflict. Using an innovative partnership with the UN, IDA has financed over US$3 billion in emergency interventions since the Bank’s reengagement in 2016 by investing in people and the institutions they rely on for critical services. 

The IDA portfolio^[1] comprises eleven active projects:   (1) the Emergency Integrated Urban Services Project II, US$170 million; (2) the Emergency Electricity Access Project Phase II, US$100 million; (3) The COVID‑19 Response Project, US$35.9 million; (4) the Desert Locust Response Project, US$25 million; (5) the Emergency Social Protection Enhancement and COVID‑19 Response Project (ESPECRP), US$840 million; (6) the Yemen Restoring Education and Learning Project, US$100 million; (7) the Yemen Food Security Response and Resilience Improvement Project, US$250 million; (8) the Yemen Emergency Human Capital Project. US$300 million;  (9) the Emergency Lifeline Connectivity Project, US$50 million; and (10) the Sustainable Fishery Development in Red Sea and Gulf of Aden, US$45 million.

Responding to Urgent Needs

The COVID‑19 pandemic has created a unique challenge to Yemen, a country where only about half of health facilities are fully functional. Even those that are functional lack enough specialists, equipment, and medicine to be truly effective. There are no doctors in 18% of the country's 333 districts, most health personnel have not received their salaries for at least two years, and immunization coverage has dropped by nearly a third since the conflict began. 

IDA's US$35.9 million COVID‑19 Emergency Response Project is designed to strengthen Yemen's fragile health systems for public health preparedness, including the detection, diagnosis, containment, and treatment of COVID‑19, as well as deployment of COVID‑19 vaccines. The project finances the procurement of medical supplies, equipment, training, implementation expenses, the rehabilitation and upgrading of existing health facilities, and the deployment of COVID‑19 vaccines. The project target is nationwide, but it specifically focuses on large communities with a high risk of local transmission by strengthening surveillance and response capacity. The World Health Organization (WHO) is implementing the project through local health authorities.

Last Updated: Mar 21, 2023

IDA grants have provided financing for critical service delivery as well as for preserving human capital and the capacity of national institutions. IDA assistance has targeted the poorest and most vulnerable Yemeni households and communities. It is helping them cope with the impact of the crisis through income support, cash transfers, health and nutrition interventions, cholera response and restoring agricultural production. 

The Emergency Crisis Response Project  (ECRP), the World Bank's US$848.58 million project that supported livelihood opportunities in partnership with the United Nations Development Programme (UNDP) and local institutions, namely the Social Fund for Development (SFD) and the Public Works Project (PWP), supported a cash‑for‑work and community‑based investment program. The project closed on March 31, 2022, and achieved remarkable results over its seven year implementation period. The project reached over 443,008 direct beneficiaries with wage employment. 5.4 million people received access to community services (such as water, irrigation, and better roads), and 12.23 million workdays were created. Over 678,723 mothers and children received nutrition services. Five microfinance institutions and over 5,101 microfinance clients were supported.

Responding to the risk of famine, the US$472.14 million emergency cash transfer component of the ECRP, implemented by the United Nations Children's Fund (UNICEF) successfully completed ten cycles of emergency cash transfer payments to poor and vulnerable households across Yemen's 333 districts. The Emergency Cash Transfer program was financed partially through the Bank's Crisis Response Window, with co‑financing from the UK’s Foreign, Commonwealth and Development Office and the United States Department of State, through the Yemen Emergency Multi‑Donor Trust Fund. Post‑distribution monitoring found that, on average, 91% of beneficiaries used cash transfers to purchase food. Women comprise about 45% of the direct recipients. 

The ESPECRP, a US$840 million IDA Grant-supported project similar to the ECRP that it replaced, supports the provision of cash transfers, temporary employment, and increased access to basic services and economic opportunities to food insecure populations affected by COVID-19, the conflict and climate-related shocks. It as well  strengthens the capacity of national institutions. The project is also being implemented by UNDP and UNICEF in partnership with the SFD and PWP. To date, and since becoming effective in December 2021, the project has reached 1,856 direct beneficiaries with wage employment. 3,666 million people have received access to community services (such as water, irrigation, and better roads), 484 mothers and children have received nutrition services, and 2904 people benefitted indirectly from nutrition services. The project has also supported 265 micro, small and medium enterprises, and provided 155,200 people with improved access to sanitation services to reduce water-borne diseases.

Under the ESPECRP’s Unconditional Cash Transfer component, the project has carried out three payment cycles (PCs 10, 11 and 12) to 333 districts across Yemen reaching an average of 1.43 million poor and vulnerable households.

To provide essential health and nutrition services, the Emergency Health and Nutrition Project (EHNP), in partnership with UNICEF and WHO, has assisted over 32 million people in all governorates across the country since 2017. Over 3.3 million people have gained access to improved water sources, about 3.2 million to improved sanitation, and over 3.5 million people in districts at high risk of cholera have received oral cholera vaccines. About 6 million women and children have received basic nutrition services, and 7.8 million children have been immunized. As many as 41,000 health personnel have been trained, and over 4,200 health facilities have been supported with equipment and medical/non‑medical supplies.

The World Bank has also been supporting activities to mitigate the risks of COVID‑19 through the Yemen COVID‑19 Response Project (with a US$35.9 million grant to WHO) since April 2020. This project helps with the implementation of the National Preparedness and Response Plan developed by Yemeni health authorities, WHO and other partners. To date, over 3,300 health workers have been trained on infection prevention and control, 48 isolation units and 18 laboratories have been supported and a monitoring and evaluation system has been established to monitor COVID‑19 response activities. The project also helps deliver COVID-19 vaccines to beneficiary residents in Yemen.

The World Bank has partnered with the United Nations Children’s Fund (UNICEF), the World Food Programme (WFP), Save the Children, and local institutions to implement the Restoring Education and Learning (REAL) project (co-financed by US$100 million IDA and US$53 million Global Partnership for Education funding). The project finances a package of evidence-based interventions delivered to 1200 schools and over 550,000 students at basic education level in the most vulnerable districts. The interventions will be implemented over three school years and support teacher payments and teacher training, including payment of 2300 Rural Female Teachers to promote girls’ education; school feeding; school infrastructure improvements, including rehabilitation of WASH facilities; the distribution of learning materials and school supplies; alternative learning models and national capacity building.

The World Bank has partnered with the United Nations Office for Project Services (UNOPS) and local institutions in conflict-affected cities, acting through the Integrated Urban Services Emergency Project (YIUSEP) to provide citizens with access to critical services. The project provided over 3 million Yemenis with restored access to critical urban services, including water and sanitation, transport, energy, and solid waste management. The second phase of the project—the US$ 170 million YIUSEP II—is currently underway. 

To increase people's access to electricity in a sustainable way, the Yemen Emergency Electricity Access Project (RY-EEAP) is partnering with local microfinance institutions (MFIs) to help them set up financing windows for high-quality, small‑scale, solar power solutions for households and to provide partial grants to make the systems more affordable. The project is contracting solar suppliers and installers to provide grant‑financed solar power systems to key facilities, including clinics, schools, and water wells in rural and peri‑urban areas. As of March 2022, six MFIs were participating in the program and a total of 83,000 households with over 557,000 beneficiaries, of which 275,000 were female, had gained household access to electricity. Solar powered electricity has been installed in 493 critical service facilities (220 health facilities, 233 schools and 40 rural drinking water wells). In addition, 23 COVID-19 isolation units were provided electricity and 2,250 health workers were provided Pico solar systems under the project’s Contingent Emergency Response Component. Critical services were restored to over 3.3 million beneficiaries. All electricity solutions supported under the project are fully renewable.  The successful RY-EEAP has fully disbursed the $50 million allocated and was scheduled to close on 31 December 2022.

On 30 June 2022 the  US$100 million  Yemen Emergency Electricity Access Project – Phase 2 was approved by the World Bank board. This new project will build on activities supported by the original RY-EEAP project, with an expanded focus on technical assistance designed to support access to electricity supply and prepare for post-conflict restoration of the Yemen power sector. The operation will adopt an integrated, area-based approach to expand electricity access for households and electricity-dependent critical public services for the rural and peri-urban population within Yemen and support the preparation of interventions to improve electricity supply across Yemen in a sustainable manner.

Last Updated: Mar 21, 2023