Advertise   Subscribe Contact Yemen Post
 
About Us   Our Mission Terms & Services
Yemen Post Newspaper Logo  
Editor Picture In a couple of months, closed door meetings for Hadi will be limited..... Foreign embassy searches not ruled out.... Foreign censorship halted..... Yemenis linked with foreign intelligence hunted for.  
Hakim Almasmari  
 Publisher & Editor in Chief   
  Email the Editor
Advanced Search
HOME EDITORIAL LOCAL INTERVIEW REPORT POLITICS BUSINESS HEALTH YEMEN IN THE NEWS MIDDLE EAST INTERNATIONAL ARCHIVE
LATEST UPDATES Houthis inspect US Embassy packages :: Press Release: U.S. Embassy Presents Yemen Customs Authority with Inspection Equipment :: Clarification on the CSR Program of 2014 in Block 10 Concession Area :: Yemen to release 64 Egyptian fishermen :: Militants break into Yemen Interior Ministry, shut office :: Houthi Militant Group rejects participation in Yemen government :: Reports reveal deal to seize cities as Security Council prepares for Yemen sanctions :: Houthi militants attack checkpoint killing officer, soliders in central Yemen :: JMP: No government participation if factions not equally represented in Yemen :: Yemeni factions to hold Brussels conference to salvage transition accomplishments ::
BREAKING NEWS
z
LOCAL
Last updated: 12:31:45 PM GMT(+03) Thursday, 07, March, 2013
 
 

Yemen at the midpoint to its new future

 
*
 Yemen Post Staff

By Wael Zakout, World Bank Country Manager

This month marks the midpoint of the transition process in Yemen. The peace agreement brokered by the Gulf Cooperation Council was signed in November 2011, but the actual implementation of the process began with the election in February last year of Abd Rabbo Mansoor Hadi as president of the Republic of Yemen, and head of the Government of National Reconciliation. As agreed upon in the peace initiative, the transition will include a national dialogue that brings together a broad geographic and political cross section of the country, the drafting of a new constitution, and concluding with new parliamentary and presidential elections. The two year transition is due to be completed in February, 2014.

The formal transition process has three important political, security and economic components.Much has been said about the progress on the political and security fronts. I want to focus today on economic developments. The picture at this stage is mixed. There is good news, and not quite as good news.

Let me start with the good news. First, at the macro level, things are stabilizing. The Central Bank of Yemen reported an increase in foreign currency reserves to US$6.2 billion, from a low of around US$3.7 billion that was reached at the height of the crisis. This is partly the result of a US$1 billion deposit made by Saudi Arabia,but also due to improved management by the Central Bank. The currency is stable at around 215 Riyals to the US Dollar. Inflation is also under control. The International Monetary Fund expects a growth rate of around 4.4 percent this year, compared to a mere 0.5 percent last year and a contraction of around 19 percent in 2011, the year of the political crisis. Finally, the Central Bank recently reduced interest rates to 15 percent. While this is still high, it is much lower than the 22 percent of only six months ago.

Donor and government funded projects are now progressing. Almost all donors have now returned to the capital, Sana’a and a large number of contracts are currently being awarded. The projects being launched are not focused on the capital alone, but in cities and villages throughout Yemen. Roads are being repaired, schools are being built, streets are being cleaned, airports are being constructed, and a major tunnel project on the road from Sana’a to Hudeida is under bidding. Soon the government will start building the expressway that will connect Aden toTaiz. There are many other projects at the design and bidding stage.

Not only have donors returned to Sana’a and projects come back to life, but an additional US$7.5 billion was pledged to Yemen at conferences last year in Riyadh and New York. These new funds will finance priority projects over the next three years. There have been extensive discussions between the government and donors as to which specific projects the new pledges will finance, and some of the promised funds have already started arriving. On February 14th, the World Bank Board of Directors approved a number of grants to Yemen totaling US$206 million, the first installment of a pledge of US$400 million in additional support. Other donors are also moving to fulfill their commitments. Saudi Arabia has already reached an agreement with the government on the allocation of most of their pledge of US$3.25 billion.

Now for the news that is not quite as good. First, not all donors are delivering on their pledges. While Saudi Arabia has moved quickly by depositing US$1 billion with the Central Bank and aligning most of its promised funding with specific projects, some countries have neither delivered on their pledges, nor started the conversation with the government on the destination of the funds.

Second, while things are improving, both at the macro level and with the pace of government and donor financed projects, overall economic activity, especially as it relates to the private sector, has not improved enough to make a difference in either the jobless rate or poverty levels. More than 50 percent of Yemenis are still under the poverty line. Food insecurity is still very high, and high malnutrition levels, especially among children persist.

Lastly, the government has not made progress in the implementation of their commitments made with donors at last year’s conference, and formalized with the signing of the Mutual Accountability Framework (MAF). It has taken the government almost five months to agree on the establishment of the Fast Track Mechanism, a critical agency that will ensure the rapid absorption of donor funds and their distribution to earmarked projects. It will probably be a few more months yet before it is fully operational. Neither has there been significant progress on key policy actions itemized in the MAF. These include measures to improve governance and promote anticorruption, reforms to the power sector and the business environment, and the building of partnerships with Civil Society and Private Sector.

Where do we go from here? The government needs to accelerate the establishment of the Fast Track Executive Bureau and launch serious efforts to implement the commitments made at the donor conference in Riyadh, or their credibility will suffer. The donors in return need to deliver on their pledges, and deliver quickly. There is no time to waste on either side.

 

 

 

 


*
Source: Yemen Post Newspaper
 
 
MORE LOCAL
 
Houthis inspect US Embassy packages
Press Release: U.S. Embassy Presents Yemen Customs Authority with Inspection Equipment
Yemen to release 64 Egyptian fishermen
Militants break into Yemen Interior Ministry, shut office
Houthi Militant Group rejects participation in Yemen government
Reports reveal deal to seize cities as Security Council prepares for Yemen sanctions
Houthi militants attack checkpoint killing officer, soliders in central Yemen
JMP: No government participation if factions not equally represented in Yemen
Yemeni factions to hold Brussels conference to salvage transition accomplishments
Dozens of Houthi killed in two days in AQAP Yemen stronghold
 
 
Comments
 
Leave a Comment
Comment will be published once it has been approved by our moderators.
Name:
Title:
Comment:

TERMS AND CONDITIONS
Yemen Post may edit comments for length and clarity but will not change the tone of the message. Comments will only be accepted if all fields (including name) are filled correctly and the message isn't abusive, defamatory or offensive. All comments sent may be forwarded for use in the Yemen Post newspaper.
Article Tools
Email this Article Email this article
Print Friendly Version Print
Email this Article Email the Editor
 
Most popular
 Houthis and Foreign Policy Changes in Yemen (2015 & Beyond)
 Houthis inspect US Embassy packages
 Press Release: U.S. Embassy Presents Yemen Customs Authority with Inspection Equipment
 Houthi scarecrow can't hide post-Arab Spring game in Yemen
 Clarification on the CSR Program of 2014 in Block 10 Concession Area
 Yemen to release 64 Egyptian fishermen
 Militants break into Yemen Interior Ministry, shut office
 
Services
  Letters to the Editor
  Dear President
  Advertise
  Subscribe
  Submit Your Articles
  Classified
  Readers' Letters
 

 
Quick poll
Do you think President Hadi is building the base to rule Yemen for many years?

VOTE  OR SEE POLL RESULTS
 

   
   
   
© Yemen Post. All Rights Reserved 2007- 2014    

 Designed and developed by
  HyperLink