Gianni Brizzi: “The more problems, the more committed I become to working in Yemen.” [Archives:1999/19/Business & Economy]
May 10 1999
The World Bank is Yemen’s most generous aid partner. Its loans are mainly IDA terms – about 30 to 40 years of repayment time, an initial 10-year grace period, and less than one percent interest.
Five years have passed since the establishment of a World Bank office in Yemen. Next week will witness yet another expansion of this office, which will move to larger premises.
Abdulaziz Al-Saqqaf, Chief Editor, had an extended chat with him covering different issues concerning relations between Yemen and the World Bank.
Excerpts.
Q: You have been here almost a year. What is your initial assessment of your work in Yemen and how is your effort organized?
A: The World Bank is the largest donor in Yemen. As a result, we have a certain level of work in the country.
I would say, I am generally satisfied from the professional point of view. The work is challenging. As I was moving to Yemen, a major decision was taken in Washington to decentralize management of project implementation. Thus, I took over the job with a lot of enthusiasm and responsibility trying to organize the (World Bank) office (in Yemen) along sectoral lines. We have 11 professional staff – 6 international, and 5 local. In addition, we have the support staff such as secretaries, accountants, etc.
One team deals with human development process, basically education and health. Another team deals with agriculture, a third with infrastructure such as transport, water supplies and sanitation. Finally, we have a new team which is led by my deputy handling public sector management and private sector development.
We carry out some policy dialogue on these areas in addition to sharing responsibility in implementing projects. It is very challenging, and sometimes it is very difficult because I have to admit that the implementing capacity of the country’s administration is rather limited.
Q: What is the average volume of annual World Bank disbursements, and their ratio to outstanding allocations?
A: Last year, disbursements reached about $ 124.5 million. In 1997, they were $70.2 million. This is encouraging.
In terms of the disbursement ratio, it is now above 22%. In 1994 the rate was just 4%. This means that, on average, we are implementing our projects over a period of less than 5 years.
This year, 1999, we look forward to a similar and possibly even better performance than 1998.
Q: Enhanced disbursements are good, but does the money go to the target projects? Are there worries regarding mismanagement and corruption?
A: Let us look at this from different angles.
First, corruption is a serious problem worldwide. Here in Yemen, we are working with the authorities to address it. We now have several projects to improve good governance.
Second, during the procurement process for the projects we finance or co-finance, we are trying to make sure that the procedures of the Bank are fully applied. These procedures in principal should limit corruption.
Corruption is the cancer of the world. It is part of human nature. What counts is to set up systems which control and limit this problem. We have tried to implement our systems here.
Whenever there is a contract that is tendered by the WB, it is open for international bidding. The process is transparent. Even in small projects, we require at least three competitive bidders.
If something happens in this process, something we are not aware of, it would be very difficult for us to follow. Obviously, whenever we find out that there is a case of collusion between government officials and a particular bidder, or if there are irregularities, we intervene.
Q: What does that mean?
A: If the irregularities are serious, we could re-launch the procurement.
Q: Has that ever happened in Yemen?
A: Not to my knowledge. We try to address such issues very early in the process.
Q: Sometimes the problem is inefficiency or lack of proper planning of resource allocation on the government’s side. For example, there are many schools, clinics, etc., that have been built by World Bank money but which are not operational because the government does not have the resources.
A: That is a good point. Our considerations when agreeing to finance projects now include looking into the operational phase. We want to make sure that once we have completed the project, the assets which have been created are properly and fully used. We don’t want to build a school, while the Ministry of Education doesn’t have the means to equip the school, provide the teachers, etc.
This is an area, I must say, with which we have a major problem. In the past, we looked mainly at the implementation of the project. Now we are focusing on the operational and maintenance phases.
Q: Let us talk about the reform program, which is four years old. There have been some improvements in monetary and budgetary aspects, partly due to a continued infusion of money from the World Bank and IMF. How do you assess the reform program so far?
A: I would say so far we have been engaged in many aspects related to micro-economic and financial management. I think it was a successful start by all counts.
Of course, there are external disruptions, like the dollar crisis last year, and the fall in oil prices. The government took very courageous measures and managed to come out of a very difficult situation with a respectable efficiency. Let us not forget the budget deficit in 1994 was around 70%. This went down to 2% in 1997. Last year it rose again to around 6%.
Inflation and the pressure on the Riyal has been managed, though over the last few weeks we have witnessed renewed weakening.
Going to your question, I will say that in the area of the micro-economic management and the financial sector, the performance was adequate. I am not saying that the agenda is complete. There are a lot of things that still need to be done, but I think that these processes have proceeded very well and we can expect continuity.
We are in the second phase of reform. Obviously, you can have all the micro-economic fundamentals straight, but you can see that without private sector development and investment, the situation cannot progress much. Yemen needs to create job opportunities and obviously some serious work has not been taking place.
We didn’t have sufficient progress in privatization, which is very important because it links the civil service reform and it also passes a very important message to the business community. Also, some major reforms in the management of the civil service still need to be done.
In short, there are a few important items on the agenda in the near future.
Q: You have just completed the Country Strategy Program for Yemen. What is new in terms of emphasis and priorities?
A: Yes, we have just completed our discussions and formulations of the Yemen Country Strategy for the next three years. The focus is on the requirements of the second phase of the reform program. This involves modernization of public administration, and of the judicial system, speeding up of the privatization process, and above all, the package that relates to government. We will gradually create an environment conducive to private investment.
Q: You have just concluded discussions regarding the Country Strategy for Yemen. What are your redefined objectives?
A: We have slightly re-defined our priorities with respect to working with Yemen. I can summarize our new approaches and priorities as follows:
1. We looked at the aspects of selectivity of our involvement. In the past, we were spread thinly in many sectors. We think it is very important to be more selective and to focus our resources in areas in which we have comparative advantage. There are other donors who can do better in some sectors. So we leave these to them.
2. We now look at issue of sustainability. We have touched on this before, when we mentioned the need to finance only projects which have the chance to be operational and to be maintained.
3. We highly value partnership building in implementing our projects. We are a large donor, but we want to link up with other donors, who will bring into play their expertise. In our drive for partnership, we are also looking at civil society organizations, especially NGOs.
4. We are pushing for a more efficient public sector administration. We want to create an environment which is conducive to private sector investment. This means the civil servant must see his/her role as supporting private investments rather than as a controller or impediment unless remunerated.
5. We are intensively working on the elimination of natural constraints to development. I am talking primarily about water. Water resources are scarce in this country. So, we want an agenda in our assistance activities which will focus very much on the use of water
6. Finally, human resource development will continue to command a high priority in our agenda. Without educated and trained people, without a healthy population, you cannot have a productive economy or create a better future. In this area there is a very particular focus, which is gender. We want to see girls have an equal access to education. We will deal with maternal health, and a package of activities that seek a better future for Yemen.
Q: In the package of priorities you described, there is a lot of talk about restructuring the civil service. The government has just completed a census of its bureaucracy. Ostensibly, they now know how many people are employed by the government, and doing what and where.
What are the next steps?
A: The census was the first step to enable the government to know how many people work for it, where, and in what capacities. It is also important to root out corruption in the form of double payments by the state to the same person.
The second phase is to set up a database to manage the personnel and relate that to needs. This leads to re-structuring of the educational system and the bureaucracy. We have to define human resources which are required in order to operate the system. There will be a need to re-qualify and re-train people, to shift personnel, and to re-structure the hierarchy of responsibilities to match the human resources. Obviously, working out the mismatches in this area – between existing resources and the required work is the task ahead of us. This is the challenging part of the reform process.
Q: Will this lead to major lay-offs?
A: I think that this is something that we will have to handle in a human way, and with full and proper compensation for those who have to leave the civil services. We still don’t know the numbers. But whatever is done, it will be done taking into account the human dimension. The challenge is to find a balance which will lead to improved performance without hitting the potential victims too hard.
Q: Is this process limited to the civilian sector or will it encompass the military/security personnel. You know that there are a lot of ghost names in the army and security forces?
A: As an institution, we don’t deal with military affairs, unless the World Bank and the other international organizations were asked to look at these aspects. But today, our efforts are limited to the civilian sector.
Q: You speak about transparency, about opening up, etc. Yet, the World Bank stays clear of the media. Actually your important publications are for limited circulation only. How do you explain the contradiction?
A: I think we are gradually opening up. Here in Sanaa, for example, we are going to establish on our premises a library which will be open to the public. Of course, that includes the media, and it would be a good information service. We will also have a few computers, printers, etc., which will provide more information.
At the same time, may I inform you that the World Bank Board has decided that as of July 1st, 1999, all the country strategy documents negotiated with governments will be available to the public.
Q: What frustrates you in working in Yemen?
A: The notion of time. For me, any action follows another action in a logical sequence until you reach end result. Thus, time programming is fundamental in my mental attitude. Obviously in Yemen, things go in a different way. But, I am getting used to this, though occasionally it gives me some frustration.
Q: You have had some difficulties since your arrival here. A bomb went off just across from your residence, forcing you to stay in a hotel for a while. There were other nuisances. Foreigners are leaving as you are settling-in. In fact, you brought your wife, as well. Why?
A: The honest answer is ‘I don’t know!’. This is something I have yet to explain to myself.
My experiences here have tested me. But Yemen is enchanting and unique place.The more I was tested, the more I love the country and its people.
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