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Workfare Helps Yemen Cope With Food Crisis

June 15, 2010

  • Cash-for-work program employs more than 41,000 Yemenis in areas hard hit by high food prices.
  • Projects to build infrastructure employ people for 50 to 60 working days; each worker earns $300 to $400.
  • Safety nets needed as social spending declines, poverty rate rises in rural areas.

June 15, 2010—High in the hills of rural Yemen, Ghaleb Ahmed sat his young daughter on his knee and prepared to eat lunch. He was taking a break from his job building a new rock and cement road in the village of Hababa—one of many places in the country where jobs are scarce and people struggle to put food on the table.

Now, that struggle would be a less difficult, at least for a while.

 “The village was in need of a road, and when the project came we got a road and we also got money for building it. So, we are able now to buy household basics like flour,” Ahmed said in December.

The project was among several in the country designed to help poor communities cope with higher food prices by employing large numbers of people to build or repair local infrastructure.

As of March 2010, Ahmed was one of 41,000 people to get such a temporary job. The projects, supported by a special World Bank fund to help countries recover from the global food crisis, have so far benefited 17,000 households and paid out $6.7 million in wages.

Those are relatively small numbers in a country of 23 million people, where 40% of the rural population lives below the poverty line, acknowledges Afrah Alawi Al-Ahmadi, a senior human development specialist at the Word Bank working on social assistance programs in Yemen.

But the success of the first phase of the cash-for-work program (workfare) is leading to more expansive efforts for helping the poor through workfare programs and other social assistance, such as direct cash transfers, she says.

“Given the need and the trend and the level of poverty, the advantages of the workfare program are clear. Now we want to be more expansive and to hone the design of the program to address chronic poverty and at the same time have the flexibility to respond to shocks when they arise.”

Yemen Struggles to Recover

Yemen, one of the poorest countries in the world, is still struggling to recover from the 2007-2008 global food crisis, which saw a dramatic rise in the price of such staples as corn, wheat and rice.  Yemen now faces food shortages and high food prices resulting from recent drought and sharply rising prices for imported food and fertilizers, in particular grain.

The Yemeni government initially tried to control wheat prices in 2008 through doubling the government’s portion of the wheat imports, but a drop in the price of oil—Yemen’s main source of export income—later that year forced the government to cut its spending on social sectors, says Al-Ahmadi.

The cuts and high food prices have led to further economic hardships and a surge in poverty, especially for the majority of rural residents. Today, about 32% of Yemen’s population is considered undernourished and food-insecure as prices remain elevated.

And prices will likely continue to rise as the government gradually abandons unsustainable energy subsidies, worsening the problem for the poor in the short-term, Al-Ahmadi says.

“It’s very simple —people eat less when they have less money,” she says. “In a country where you already have a fairly high level of malnutrition, it means there are fewer meals, and within a meal, less on your plate. A safety net at scale is highly needed now,” she says.

 Food Crisis Grants Help Communities

When the food crisis hit, the World Bank’s Global Food Price Crisis Response Program (GFRP) allocated $10 million to Yemen. The money was a grant from the World Bank’s fund for the poorest countries, the International Development Association (IDA), and was used to fund the Hababa road and other labor-intensive projects in 2009.

The cash-for-work projects were designed to employ people for 50 to 60 working days, so that each worker would earn $300 to $400—enough to cover gaps in earnings over a year to meet the extra cost of basic food staples and to help pay debts amassed during the food crisis. Because wages are set below the market rate, the projects draw mostly poor applicants.

The success of the program so far has led to a call to cover more families and areas, says Al-Ahmadi, team leader of a second project funded by a GFRP grant of Euro 17.5 million from the European Union.

That project will assist around 14,000 poor households through the workfare program, and deliver unconditional cash transfers to another 41,000 households over 12 months.

$60 Million for Yemen’s Social Fund

Both GFRP grants were implemented by Yemen’s 13-year-old Social Fund for Development, a government program supported by 15 donors including the World Bank.

The fund, known for its community-driven development approach in which communities determine how to help themselves, has successfully delivered social services in an environment where government and nongovernmental capacity is low. The fund was therefore seen as the quickest, most effective way to channel GFRP assistance to people in rural areas, says Al-Ahmadi.

In March 2010, the Bank approved $60 million in new IDA grants for the Social Fund for Development, including $25 million to improve access to basic social services, $15 million to strengthen microfinance providers, and $5 million to increase the capacity of local and central government to run the programs.

Another $25 million will be used for cash-for-work programs that will likely run for several years in selected hard-hit communities. The goal will be to create a safety net to protect 100,000 people initially, and eventually 300,000 people, from economic shocks and agricultural shortfalls.