International Day for the Eradication of Poverty 2006 Working together out of poverty [Archives:2006/991/Business & Economy]

October 19 2006

By: Raidan Al-Saqqaf
[email protected]

The United Nations International Day for the Eradication of poverty is celebrated throughout the world in October each year. One of the main aims of the commemoration is to make the voice of the poor heard, therefore the United nations invited all States and concerned parties to devote this Day to presenting and promoting concrete activities on the eradication of poverty and destitution. The theme of this year's poverty day is “Working together out of poverty.”

Poverty in Yemen is likely to increase unless there is greater economic growth especially in rural areas in Yemen, says a July report by the unit for poverty reduction affiliated to the Ministry of Planning and International Cooperation. The report indicated that the year 2005 has performed slightly better than 2004 in slowing down the speed of poverty growth in Yemen. In 2004 Poverty has grown by 1.4 percent while in 2005 poverty has grown by 0.9 percent. This growth in poverty was the result of the inability to meet the minimum growth percentage required to sustain the same level of poverty in Yemen, which was 5.3 percent in 2004 and 5.5 percent in 2005.

The Economist Intelligence Unit has even reported an even more pessimistic image on Yemen's economy; it has forecasted economic growth in 2006 will be at 2.4 percent and 2.3 percent in 2007, falling far behind the target of 7 percent the government has set in its five-year development plan 2006-2010, which relies on two factors, the first is to promote economic activity increasing overall national productivity and in turn increase the income per capita, while the other factor focuses on combating poverty using seven mechanisms which we will discuss hereafter.

1. Encourage Investments in labor-intensive industries which employ a large number of workers in industries such as agriculture, manufacturing and services such as tourism in order to increase employment and financial yield to people. Also to extend the Infrastructure such as roads and power services to remote areas in order to reduce their disconnection and also potentially facilitate the expansion of labor-intensive industries in rural areas into rural areas which might prove economically more feasible compared to urban centers.

2. Revising economic policies and the legal framework as well as the fiscal and financing policies and tax regulations in order to become more investor-friendly and encourage investors to play a larger role in the economy in turn providing employment.

3. Partnerships with the privet sector, civil society institutes, international organizations and donor countries can prove instrumental in poverty reduction, especially with regards to the most deprived and poorest segments on the society through production projects, tiny enterprises and the activities of civil society organizations in promoting entrepreneurship.

4. Capacity building for the poor and unemployed and training them to enhance their productivity, building their capacity through education, health care, vocational training and other sorts of training aiming at improved efficiency and productivity eventually increasing the income per capita.

5. Micro Financing and facilitating the purchase of productive assets and equipment through improving the lending mechanisms for tiny and small scale enterprises, these include the establishment of the HOPE bank which will be focused on financing micro and tiny projects.

6. Strengthening social security networks and expanding welfare networks for the disabled and those who cannot play an active part in the economy, and also coordinate between various government welfare agencies in order to synergize efforts made in this regards.

7. Improving local administration and the role of local councils in terms of collecting 'Zakat' donations as well as other funds and directed income, and using those funds to build productive assets for the community as well as providing various services such as education, sanitation and infrastructure.

This seven-mechanism package of poverty reduction adopted by the Yemeni government might seem adequate in theory, but the key measurement is the impact of these mechanisms in reducing the level of poverty. Official statistics issued by the Minister of Planning indicate that during the period of 2000 – 2005 poverty in urban centers have decreased from 25.3 percent in 2000 to 18.7 percent in 2005, while in rural areas which accommodate roughly 70 percent of the population the poverty rate has dropped from 43.6 percent in 2000 to 40.6 percent in 2005.

One of the main reasons for the poverty in urban centers is the unemployment and underemployment, the official statistics indicate that unemployment stands at 15 percent of the urban work force and have a direct bearing on level of poverty in urban centers, while the biggest concern of poverty lies in tackling poverty in rural Yemen.

Poverty in rural Yemen lies mainly in the nature of economic activity carried out in rural areas, for example agricultural activity. The economy of Yemen is still agricultural-based as agriculture employees 54 percent of the workforce and provides livelihood for over 66 percent of population focused in rural areas. This means that roughly 4 percent of the rural population is supported by value-added activities in rural areas such as trade, services and industry in various parts of the country.

Understanding poverty in rural Yemen which relies on agricultural activity necessitates that we study the agricultural yield in Yemen we can see that it can be divided into two types in accordance to the irrigation techniques, agricultural lands which relay on rainfall and do not have access to advanced irrigation techniques represent 60.8 percent of total agricultural land, but it only produces 14.2 percent of the total agricultural produce. On the other hand, 39.2 percent of the agricultural land uses advanced irrigation techniques and in turn produces 85.8 percent of the total agricultural produce. This indicates that poverty is rural Yemen suffers from a vicious cycles as those unable to afford advance irrigation have a fraction of the yield otherwise possible with the help of better irrigation techniques.

The seven mechanisms laid down by the government of Yemen in order to reduce poverty are destined to have a favorable impact if executed property and efficiently, as the failure of tackling poverty in Yemen doesn't only have an impact on the economy, but the political stability as well. Poverty in Yemen is a complicated issue, however, on the occasion of the UN day for eradication of poverty works as a reminder of the enormous size of the task and the many steps to be taken.