New terms for WB assistance to Yemen [Archives:2005/898/Business & Economy]

November 28 2005

Despite the reservations of several donor countries and global organizations in offering financial grants to Yemen, the Yemeni government is appealing to donors with the hope of receiving more aid and grants to implement several development projects and economic reforms in the country.

Yemeni deputy prime minister and minister of planning and international cooperation Mr. Ahmed Sofan has affirmed Yemen's keenness on cooperation with the World Bank in order to increase the Bank's grants and assistance to development projects in the country.

In a consultation between the World Bank and the Yemeni government held in Sana'a recently, Mr. Sofan discussed areas of cooperation and measures taken by the government since 1990. He described the bank's regional strategy for assistance as a spring of experience and there better be a mutual benefit from the technical assistance and consultations it offers.

Mr. Sofan also illustrated how Yemen is at present in a viable economic situation; he says the rate of economic growth amounts to 8-10% and would continue in its upscale rate in the five years to come. Sofan also pointed out the importance of regulating efforts between the government and the WB to establish a real partnership and increase in benefiting from investments provided by the bank.

On his part, WB's regional director has clarified that the strategy of regional assistance to support Yemen in the coming three years includes financial and technical aspects, pointing out that Yemen could benefit from the bank's non-interest easy loans extending over forty years with a ten-year grace period. He said the grants the WB receives from donor countries every three years were distributed to countries that deserve them the most provided that they are subject to audition every year, adding that the results of audition would either increase or decrease assistance to Yemen. He also made it clear that there are new terms for assistance and grants offered by the bank to Yemen as a result.

It is worth mentioning that the World Bank has reduced its assistance to Yemen to two third of its previous programs. Economists in the country attribute that to government way in implementing projects already funded by donor countries and financial corruption among officials and government agencies, which is evident in auditors' reports. Opposition parties claim that Yemen's crisis is the result of government failure and political corruption, the root problem producing corruption in all government agencies.