Economic Research Forum reveals scary facts:Yemen’s future economy in serious trouble [Archives:2005/819/Front Page]

February 24 2005

Yemen Times Staff
Compiled from a report by
Economic Research Forum

A report was recently drafted by the Cairo-based Economic Research Forum on the occasion of the upcoming Arab summit in Algiers. The report said that in Yemen, where 45.2% of the population lives below the income poverty line of $US2 per day, the economic outlook is serious. Economic growth rates deteriorated noticeably in the past four years, slumping from 6.1% in 2000 to a tentative rate of 1.9% in 2004.

The government has failed to accomplish many targets previously set within the five-year plan. Declining oil production is likely to further reflect unfavorably on the current account and the fiscal balance as well as on the pace of real GDP growth. Yemen's national oil reserves also look likely to be depleted by 2012, close to a decade earlier than was expected.

Around 50% of the population is under the age of 15, and the government estimates that it must now deal with about 25,000 new job seekers on the market each year.

The World Bank had estimated that in 2002 that adult illiteracy in Yemen was a striking 54%. This compares with an average for low-income countries as a whole of under 40%. The statistics are even starker when broken down by gender, with 73% of Yemeni women being illiterate compared with 21% of men. This compares with around 45% and 20% for women and men respectively in low-income countries as a whole, and around 35% and 20% for Middle Eastern countries.

Another important issue is the low level of access to basic education, particularly for girls. In 2002, 67% of Yemen's children in the relevant age groups were enrolled in primary schools and only 35% in secondary schools, while the figure for female enrolment drops to 49% and 21% respectively. This compares with an average of over 95% and 40% for all children and around 45% and 35% for girls in low-income countries. Supported by donor agencies, the government is now seeking to address these disparities, with the emphasis to be placed on access to basic education. Change is likely to be slow, as resources are limited.

Although Yemen's universities do have science, engineering and medical faculties, a substantial proportion of graduates are arts students. Yemeni and foreign businessmen therefore find it extremely difficult to find bilingual, literate and IT-proficient local workers. The World Bank and European donor countries have made technical, vocational training a priority in their aid programs, with Germany taking the lead in skills transfer initiatives.