The World Bank In Yemen

Yemen has long been one of the poorest countries in the Middle East and North Africa (MENA) and is facing one of the world’s worst humanitarian crises. The conflict that started in 2014 has inflicted massive economic and social costs on the country and its people. From 2015 to 2022, the country experienced a staggering 52 percent contraction in real GDP per capita, currently leaving two-thirds of the population, around 21.6 million individuals, in need of humanitarian assistance.

Moreover, the ongoing conflict has intensified the fragmentation of the country into two distinct economic zones, each governed by its unique set of institutions and policies, with increasing disparity between them. During 2022, a UN-brokered truce brought a glimmer of hope. Although it expired in October 2022, an informal truce remained in place. However, the situation worsened in 2023 due to a Houthi-imposed blockade on oil exports. This blockade is severely impacting foreign currency liquidity and exacerbating existing economic difficulties, including the fiscal position of the Internationally Recognized Government. The exchange rate depreciated to historic lows on Aden’s market, leading to price increases despite a global decline in commodity prices. Moreover, reliance on remittances and aid flows, coupled with climate change vulnerability, leaves Yemen exposed to external factors.

In the face of escalating poverty and heightened food insecurity, many households have depleted traditional safety nets and are now resorting to dire measures. Since the onset of the conflict, the steep rise in the prices of essential goods, particularly food items, has pushed food insecurity to the forefront of concerns in Yemen. Presently, over 17 million people face food insecurity, with 3.5 million experiencing severe malnutrition. Simultaneously, approximately 18 million Yemenis lack access to safe drinking water and dependable sanitation facilities. Consequently, Yemen grapples with recurrent outbreaks of preventable diseases like cholera, diphtheria, measles, and dengue fever. A 2023 mobile phone survey highlighted that, with limited viable options to weather adverse shocks, households are resorting to detrimental coping mechanisms, such as withdrawing children from school (33 percent of the sample) or engaging in precarious, high-risk work (19 percent).

Looking ahead, while Yemen’s prospects remain uncertain due to oil export constraints and ongoing political negotiations, a lasting truce or peace agreement could swiftly strengthen Yemen's economy. Using innovative night-time light (NTL) emission data to assess economic activity during the 2022 truce, the World Bank’s recent Yemen Economic Monitor reveals there was a sharp increase in economic activity during the period. On the longer run, achieving prosperity in Yemen depends on resolving the political disputes that have fractured its economy. An equitable and inclusive peace settlement addressing economic barriers, conflict-related grievances, and structural issues will be critical for Yemen’s recovery and lasting stability.

Last Updated: Jan 25, 2024

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$3.9 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 comprises nine 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 Desert Locust Response Project, US$25 million; (4) the Emergency Social Protection Enhancement and COVID‑19 Response Project (ESPECRP), US$840 million; (5) the Yemen Restoring Education and Learning Project, US$100 million; (6) the Yemen Food Security Response and Resilience Improvement Project, US$250 million; (7) the Yemen Emergency Human Capital Project, US$600 million;  (8) the Emergency Lifeline Connectivity Project, US$50 million; and (9) the Sustainable Fishery Development in Red Sea and Gulf of Aden, US$45 million.

Responding to Urgent Needs

The COVID‑19 pandemic 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 was 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 closed on December 31, 2022.  The project supported the development of an Emergency Operations Center for COVID-19 and set up 18 laboratories with COVID-19 diagnostic equipment, test kits and reagents. It also supported training for 3,468 health personnel in infection prevention and control. Ninety-five percent of beneficiaries were satisfied with the COVID-19 services they received, whereas 88 percent of health staff expressed satisfaction with training provided. The World Health Organization (WHO) implemented the project through local health authorities.

Last Updated: Jan 25, 2024

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 comprised 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) in all 333 districts across Yemen reaching an average of 1.43 million poor and vulnerable households.

To provide essential health and nutrition services, the Emergency Human Capital  Project (EHCP), in partnership with UNICEF, WHO and UNOPS, supports 2,200 health facilities across all 22 governorates. It brings quality primary health and nutrition services to the hardest-to-reach communities through a network of more than 15,000 community health workers and volunteers. The project has expanded access to antenatal care services for 590,000 pregnant women, mental health and psychosocial support for 180,000 people, and immunization to 1.3 million children. The project has also expanded access to water and sanitation services. More than 530,000 beneficiaries now have restored access to rehabilitated water supply services, while 390,000 beneficiaries with restored access to rehabilitated sanitation services.

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 is supporting provision of regional and global public goods through the Yemen Desert Locust Response Project. This project’s focus is on control and response to the desert locust outbreak, and on supporting livelihoods in locust-affected areas, and strengthening Yemen’s preparedness for future locust infestations. The project is implemented in partnership with the Food and Agriculture Organization (FAO) and the Social Fund for Development (SFD). The project has regional and global significance because it helps control and monitor the movement of desert locust – a transboundary pest that destroys agricultural productivity and affects livelihoods. The project monitored and surveyed 819,360 hectares by visiting 7325 sites, which considerably exceeded the original project target of 400,000 hectares, generating valuable information about locust breeding areas and movements not only in Yemen and the Arabian Peninsula, but also in the entire Middle East and North Africa Region.  The project supported desert locust surveillance and monitoring covering winter and summer breeding areas in 11 governorates. In addition to surveillance and monitoring of desert locust, the project supported affected communities by providing livelihood assistance. Around 21,020 vulnerable farmers in four governorates (Abyan, Aljawf, Hajja and Shabwa) were provided with emergency support. The project supported farmers whose  production was  destroyed by locust infestation. The project provided access to the basic needs and tools to sustain production activities, such as quality inputs, water for irrigation, operational infrastructure, feed, livestock and beekeeping kits, seeds and fertilizers—all of which promoted farmers’ production  and generated income. Also, the project supported the rehabilitation of some critical agriculture production infrastructure, including 608 ha of agricultural lands, improving 16.6 km of rural roads, 800 m3 of water harvesting structure and 17 water wells and springs.

The World Bank has partnered with the United Nations Office for Project Services (UNOPS) and local institutions in conflict-affected cities, acting through the Yemen 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) partnered 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 also contracted 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. Six MFIs participated in the program and a total of 114,000 households with over 787,000 beneficiaries, of which 389,000 were female, gained household access to electricity. Solar powered electricity has been installed in 494 critical service facilities (220 health facilities, 234 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 3.2 million beneficiaries. All electricity solutions supported under the project are fully renewable.  The successful RY-EEAP has fully disbursed the $50 million allocated and closed 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 project aims to provide 200,000 households with access to electricity and support 700 critical facilities with solar powered electricity. 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: Jan 25, 2024