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Development Key to Sustaining Reform Process in Yemen

March 27, 2012

March 2012 - Following an agreement to establish a unity government in Yemen and the resulting improvement in the security situation, the World Bank was able to resume operations after an eight month suspension, but the situation remains fragile. The need for a program of sustainable development is more acute than ever, to provide a stable environment in which Yemenis can concentrate on the critical task of drawing up a new constitution, and building the institutions for a more open and equitable society.

Country Manager Wael Zakout is back in the capital Sana’a, and will lead World Bank efforts to support Yemen with a range of social and economic projects. This will involve assistance with responding to immediate needs, such as coping with the aftermath of the recent social unrest, speeding up the implementation of key poverty alleviation programs, and financing projects to meet longer term development goals.

We caught up with Wael to discuss the current situation in Yemen, and how the World Bank plans to meet the multiple challenges ahead:

What are the main development challenges in Yemen, and how have they been affected by the recent political turmoil?

Wael Zakout: Yemen has limited natural resources like water, coupled with a growing population. It has one of the highest population growth rates in the world, which will exert ever greater pressure on its limited natural resources. There is severe malnutrition, especially among children, and acute poverty. Around 47% of the population lives on under US$2 dollar a day. There is high unemployment and limited job opportunities, especially for young people.

What will be the primary focus of the World Bank as it re-engages with Yemen?

WZ: We have lifted the suspension of disbursements and opened a small presence in the capital, Sana’a, operating out of the Movenpick Hotel. Our immediate goal is to accelerate the implementation of the Bank-financed projects to restore basic services that were affected by the crisis, and create short-term job opportunities. We are also working with the government and our development partners, the European Union, the United Nations and the Islamic Development Bank, to assess the social and economic impact of the crisis. We are also helping the government to prepare an economic transition plan to cover the two-year transition period. These two documents will be ready by the end of April. The Bank will use these two documents to identify and prioritize the areas to be supported by the Bank over the coming two years.

In what ways can development support of the political transition?

WZ: The government and our development partners see the main challenge during the transition period as the need to improve basic services, restore the economy and build modern institutions. Everyone is looking to the Bank to lead on these three areas. Restoring the economy will provide the political space for the transitional government to undertake the national dialogue to draw up the new constitution, and undertake the serious reform that is needed to build the foundation for the next elections.

Has the Bank's approach changed in any way in response to the mass protests?

WZ: Definitely, we are now talking with civil society, youth organizations, the opposition, academia and think tanks, and no longer is our engagement limited to the government. One of my first meetings I had when I arrived in Sana’a was with the youth leaders and civil society organizations. I met with Tawakkul Karman in her tent, in Change Square. We discussed many issues related to the political process, the change Yemeni youth hope for, and how to achieve the goals of the revolution; of building a modern civil state based on the rule of law, with a strong economy that provides good paying jobs for all its citizens. With respect to the donor community, we are working very closely with the other partners as part of the Donor Forum, which I co-chair along with the head of the UN office.

What are the Bank's long term goals in Yemen, and how can they be achieved?

WZ: We are working with the transitional government to identify transformational engagement over the next 2-3 years that will make a lasting improvement in the social and economic development of Yemen. These will include addressing the core causes of fragility and conflict in the country. It will also involve building the foundation for a modern civil state, by improving infrastructure like power and water supply, and assisting in the reform of the education system. We will support improvements in public financial management, and encourage private sector engagement, to generate jobs, grow the economy and reduce poverty. Throughout this process we will maintain a true dialogue and partnership with all stakeholders, including the new transitional government, civil society, youth groups and political parties.