January 2010 - From what was historically known as “Arabia Felix” - a land of prosperity and happiness - Yemen has become the poorest among the Arab countries. The Government of Yemen has launched so far three five-year economic reform plans since 1990 with the goal of reducing poverty and enhancing development in various sectors. Have these efforts succeeded? What policies are needed to further reduce poverty?
Poverty in Yemen declined
- The percentage of poor declined from 40.1 % in 1998 to 34.8 % in 2005/06.
- In rural Yemen, the poverty declined from 42.4 % in 1998 to 40.1 % in 2005/06.
Despite the recent reduction, poverty in Yemen is deeper and more severe than in other MENA countries
- The poverty gap index is 8.9 %, implying a monthly poverty deficit per capita of about YR 497. On average, a poor person should receive YR 1,431 per month to be lifted out of poverty.
- Perfect targeting of the poor would require only about YR 124.4 billion per year (about 4 % of GDP) to fill the gap between the actual spending of poor households and the poverty line.
Poverty by region
There are large intra-governorate differences in the incidence of poverty. Poverty varied between 5.4 % and 71 % in 2005/06 among governorates. It is highest in the rural part of the Amran governorate, where 71 % of the population is poor. Amran is followed by Shabwah and Al-Baida (60 %). The incidence of poverty is the lowest in the Al-Maharah and Sana’a City governorates.
Changes in the key characteristics of the poor
- Educational attainment of the poor has improved, and the poverty incidence has marginally declined among illiterate families. However, at a time of rapid surges in enrollment, children from poor families are falling behind.
- Poor families spend less on health expenditure as a share of their total expenditure compared to the non-poor.
- More people are seeking medical treatment when sick, but the gap persists between the rich and poor.
- High health cost is stated as the single most important reason why the poor do not seek care when they are sick.
- Using self-reported status, the poverty rate of female-headed households in Yemen is not significantly different from male-headed households.
- Female-headed households allocate resources better than male-headed households.
Social spending and poverty
Social spending in Yemen has decreased in the recent past to 7 % of GDP. Although public recurrent education expenditure equally benefits all levels of income, the distribution is more unequal at higher educational levels.
Immunization coverage in Yemen has been improving over the last decade. For measles immunization coverage - one of the MDG indicators - the national average rate was less than 80 %.
In the poorest quintile, more individuals sought care at private health facilities than public facilities. Private clinics were the most popular in terms of seeking care by the poor.
- Crafting a growth strategy that enables rural Yemen to also participate in prosperity is vital for the success of poverty reduction.
- Besides, such a strategy needs to be tailored to suit the needs of Yemen’s special socio-economic context.
- Managing well the transitional costs of reform on the poor is an important area of focus.
- Better targeting social spending in education and health sectors to reach the poor.
- Redesigning the nearly non-functioning poverty reduction monitoring system towards best-practices will help.
Water scarcity another challenge for Yemen
While demand for water is still rising, groundwater resources are virtually all developed. Since none-renewable groundwater is being mined, the large part of the economy depending on the groundwater resource is now under threat. Competition for water is growing between users at both the local level and between town and country.
Groundwater resources are being depleted overall, but the situation is uneven. In the cities and towns along the coast, the water problem is generally less severe, and groundwater resources are expected to be adequate for the medium term.
In the Sana'a basin a very deep aquifer is now being tapped. It requires wells that are about a kilometer deep, and energy costs for pumping are very high. That aquifer is estimated to have sufficient yield to meet the projected demand in the basin for about 10-15 years.
Elsewhere in the uplands, the water resource situation is far more dire. In Taiz and Ibb groundwater resources are effectively depleted. Negotiations are underway to pump desalinated water up from the Red Sea. The bulk supply cost is estimated at about US$1.75 per cubic meter.
Overall, the groundwater overdraft is about 30% country-wide (i.e. 30% more water is being pumped than the sustainable yields of the aquifers). In some basins the overdraft is as high as 250%.
Unaccounted for water in piped systems is, on average, around 40 - 50%. Consumers in parts of Sana'a only receive water from their pipes once every two weeks. In Taiz water is supplied only once every 3 - 4 weeks.
Of the 90% of water resources that is used for irrigation, a very large percentage goes to Qat cultivation.
In urban areas, only about 56% of the population has access to network water supply, and only 31% to sewerage. In rural areas, about 45% of the population has access to safe water, and only 21% to adequate sanitation. In addition, towns – particularly the largest cities such as Sana’a and Ta’iz - are very short of water, and are faced with very high cost for new supply options. Low access of the poor to water and sanitation services has negative and impoverishing effects on public health, children’s education and general well being.
Overall supply is 5.1 billion m3 but renewable supply is only 2.5 billion m3 while demand is 3.5 billion m3, meaning the deficit of 1 billion m3 every year! This deficit is recovered by mining fossil groundwater. The difference of 5.1 and 2.5 billion m3 in supply is loss through evaporation and flood water flowing into the sea.