As an official report warns of poverty MPs criticizes wages strategy [Archives:2005/853/Business & Economy]

June 23 2005

A recent government report warned that around 2 million Yemeni workers might fall prey to poverty unless serious steps are taken to expand the coverage of social insurance of private sector workers.

In its vote of the law draft on jobs and wages, the Parliament linked between poverty line and the surveys of family budget that is estimated between YR 40-45 thousand per month, taking into consideration that the average family members are seven.

A broad controversy took place concerning the definition of poverty line and the Article No. 8, where the MPs voted in favor of the article of poverty line definition.

Minister of Civil Service Hamoud al-Sofi has been impressed by the law since it has an economic definition and its being limited to a particular value is not accepted since prices keep on changing from time to time.

Some MPs mentioned the law might cause fear among members and political organizations that many employees may be fired, and have shown concern that the political affiliation is the measure to be adopted while manipulating wages of employees.

The MPs commented: “we know that some employees were fired in the past due to their political affiliation and others were retired early.

They added the article of the poverty line definition contained ambiguous statements and never showed an attempt to tackle the issue.

Regarding the national strategy for wages and salaries, the MPs said: “the strategy was unanimously rejected since it lacks many rules necessary for the administrative and financial areas.

On the other hand, official statistical indicators clarified that the number private sector workers whose insurance is obligatory reached 64,181 with an insurance rate of 2.2% till 2003.

Meanwhile, there are over 2,868,000 out of 2,914,000 private sector workers, making up 97.8% of the overall number of private sector workers, who are not included by the social insurance.

Specialists estimate the number of public and private sector employees are supposed to be obligatorily involved in the social insurance at 771,497 up until 2003.

Although the obligatory social insurance coverage was estimated at 21.3%, Mohammad al-Afandi, a famous Yemeni academic, considered it very low and a limited percentage and therefore can not achieve the social goal sought by social insurance authorities.

On the level of different sectors, according to figures of social role indicators, the obligatory social insurance coverage in the public sector has not exceeded 19,5%.

In the private sector, the social insurance coverage is comparatively low as it never exceeded 1.8% of the total number of workers, and this to a great extent clarifies that a large number of private sector workers are not included in the social insurance.

Public and private sector workers involved in the social insurance numbered up to 412,000 in 2003, compared to 400,000 workers in 2000, making up around 58.2% out of the workforce.

According to the official statistical indicators, there is about 42% of the workforce who are not yet involved in the social insurance. Though the effective indicator of the social insurance coverage confirmed the number of private sector workers involved in the social insurance rose from 45,305 in 2000 to 46,297 in 2003, with an annual average growth of 12.4%, up until 2003, the real number of workers registered in the social insurance did go beyond 1.8% of the total number of workers in the economic sector and 2.2% of the entire private sector workforce.

The social insurance coverage indicator reveals that 98% of private sector workers are not involved in the social insurance.

A government report, presented as a work paper of a symposium on the role of civil service in alleviating poverty, showed that Taiz tops the list of governorates in terms of job seekers with 14.4% of the overall number of applicants, and is followed by Ibb Governorate with 7.57% and then Hodeida with 6.98%. Al-Jawf Governorate occupies the bottom of the list in terms of job seekers.