SANA’A // More than two years after a donors conference in London pledged US$5.5 billion (Dh20bn) to help Yemen, just over $375 million has been disbursed.

The challenge now, according to a top World Bank official, is obviously translating those pledges into action.

“We made significant pledges of financial and other assistance in London, but the challenge is now one of implementation, of ensuring that these pledges translate into actual action on the ground, and that the activities we finance are true priorities for the country,” said Daniela Gressani, the World Bank’s regional vice president for Middle East and North Africa.

Almost half of the pledges – $2.5bn – came from Gulf states.

Nabil Shaiban, Yemen’s general director of international co-operation at the ministry of planning and international co-operation, said the delay in using the funds was because of the time needed to meet donors’ requirements for allocating the money.

“There has been a small delay in disbursing the funds from the GCC states because of arrangements, problems of preparing feasibility studies as well as fulfilling the requirements of some of the financing agencies,” Mr Shaiban said. “Usually, it takes time to negotiate and agree about projects with donors and this is a normal process. In the case of the GCC, it has taken a little more time.”

Mr Shaiban refuted allegations that Yemen was not ready to put the funds to good use.

“It is not true that our capacity to use or absorb these funds is weak. We can absorb a lot of money depending on the delivery of the donors. We try to prioritise projects according to the donors’ interest,” he said.

He said this year and next year will see a big jump in terms of disbursing funds for projects already agreed upon and that the GCC contribution will be used to improve roads, power, water and education as well as vocational training.

Yemen, one of the poorest countries in the world, faces a number of challenges including reduction of oil revenue, poverty, conflict in the north, terrorism and piracy. Forty-two per cent of Yemen’s 22 million people live on less than $2 per day, and unemployment runs at 35 per cent.

“The global crisis is already hitting Yemen very hard through the sharp decline of oil prices, forcing authorities to make difficult budgetary decisions; the loss of some remittances, and potentially a loss of foreign direct investments,” Ms Gressani said. “This highlights the importance of our work today and of our efforts to implement effective assistance programs.”

According to a report two weeks ago by the planning ministry, Yemen faces significant obstacles in expanding economic growth and reducing poverty.

“The main challenges the country faces in achieving these twin goals remain largely the same as they were a few years ago: reducing dependence on oil, slowing down population growth, coping with scarce water resources, and strengthening governance,” the report said.

“Soaring food prices, flood disasters resulted by climate changes, rebellion in Sa’ada and terrorist phenomenon as well as impacts of the global financial crisis are the main challenges facing Yemen’s development,” Ali Mujawar, the prime minister, said in a recent address to officials and donors.

“The political unrest in the African horn, piracy and the continuous pouring of African refugees to Yemen have contributed to these challenges,” Mr Mujawar said.

Western donors say they support Yemen in overcoming its development challenges, but they want their assistance to be matched with a comprehensive Yemeni plan and reforms.

“The impacts of the global crisis could have been mitigated had the long overdue domestic economic and fiscal reforms been sufficiently implemented,” said a western diplomat who spoke on condition of anonymity.

“Disbursement of funds should reflect Yemen’s real needs rather than perceived needs of donors. Yemen does not need to spend millions of dollars on roads,” said the diplomat. He was referring to a $213m agreement signed recently between Yemen and Saudi Arabia specifically for the construction of roads.

“Population explosion, water scarcity, poverty and fewer resources are the real challenges people should be worried about. These funds of the GCC countries can be better channelled to address these concerns and build better schools. The GCC states seem as though they do not have a plan for their pledged funds to Yemen. This is why the disbursement level is not much more than 10 per cent; they need to identify good projects which takes time.”