Budget committee limits deficit by 3% for next year,WB warns against failure of economic reforms in Yemen [Archives:2004/785/Business & Economy]

October 28 2004

In its meeting chaired by prime minister Abdulqader Ba Jammal, the Higher Budget Committee stressed on encouragement of government for productive investments for the creation of employment opportunities.
The meeting requested the ministry of finance and relevant parties that the proportion of deficit in the budget of the state for the year 2005 must not exceed 3% of the gross national product.
The committee has also approved to go ahead in the policy of economic reforms in Yemen in a way harmonious with Yemen's pledges to development partners, such as Funds, banks and donor countries.
The meeting has shown the government keenness on creating job opportunities and expansion in building investment projects and establishment of stability in the national currency exchange rate against foreign currencies.
On the other hand the World Bank has warned Yemen against failure in the execution of the program of economic and financial reforms, drawing a dim picture of the situations if the authorities would not commit themselves to implementation of the program according to what had been agreed on and raise the level of its performance. The WB mentioned what it named as serious failures in application of reforms as the Yemeni government was unable to utilize the opportunity of the rise in world oil prices in preserving the level of economic stability and preparation for development securities based on non-oil revenues.
The World Bank report has displayed that Yemeni export of non-oil products dropped by 13% in the last year and by 19% in this year. The WB report also criticized weakness of the private sector contribution to local investment as it has been revealed that the proportion of its investments contribution did not exceed 13%.