Ongoing projects to build YemenWorld Bank gives $145 million credit [Archives:2004/717/Business & Economy]

March 4 2004

WASHINGTON – The World Bank approved a to $145 million credit for three projects in Yemen aimed at expanding access to basic services, addressing water scarcity in farm areas and providing essential infrastructure to improve services and environmental conditions in poor communities.
The three projects respond to the Government of Yemen's efforts to fight poverty through an economy-wide reform program to stimulate growth while ensuring that vulnerable segments of the population are protected.
Almost half of Yemen's population of 18.8 million live below the poverty line, with 73 percent living in rural areas.
Yemen remains one of the least developed countries based upon human development indicators. Life expectancy is 56 years. Only 45 percent of Yemeni adults are literate, with a wide gender gap in education. Yemenis have limited access to infrastructure such as safe water supply and sanitation, and electricity reaches only 35 percent of the population.
Yemen is also one of the most water scarce countries in the world. The average renewable water resources per capita is about 130 m3 per capita per year, which is about one-twentieth of the world average. As a predominantly rural country, irrigated agriculture remains the main economic activity and source of income and employment in rural areas. Therefore, water scarcity and the rapid depletion of groundwater directly impacts poverty and employment.
The $60 million Social Fund for Development Project builds on the success of the first two phases of the project and will support effective delivery of social services with the participation of local communities.
The Social Fund has emerged as the leading development agency in Yemen. Since 1997, it supported about 3,260 projects across the country. In this third phase, the Social Fund will finance projects in the areas of education, water and environment, health and social protection with a special focus on women and children, cultural heritage and rural roads.
The Social Fund will also seek to strengthen the management of microentreprise programs it supported in the past with over 7000 active clients. In addition, it will continue to finance activities for training and organizational support of NGOs, private sector and select government agencies who work in the same sectors.
The $40.0 million Groundwater and Soil Conservation Project is designed to address Yemen's critical problem of unsustainable groundwater extraction caused by the rapid spread of groundwater irrigation and dwindling rates of recharge. The project will assist the government of Yemen to conserve water in farming areas, improve recharge and protect watersheds by improving water use efficiency and increasing surface and groundwater availability.
It will also provide support to local institutions to enable them to manage local water resources in a sustainable manner.
The $45 million Third Public Works Project is an extension of past two operations which provided much-needed infrastructure services and environmental conditions, particularly those affecting women and children and creating short-term employment.
It will focus on infrastructure services in the areas of health, education, water supply, waste water, roads, irrigation and vocational training, while targeting poor communities. The project is designed to assist the government of Yemen in addressing the impact of economic reforms and the potential reduction in government budget as a result of the drop in government revenues.
The three projects fall in line with the World Bank's Country Assistance Strategy for Yemen which aims to fight poverty by building human resources with emphasis on girls' education and health, sustainable water management, job creation and public sector governance.
The International Development Agency (IDA), an arm of the World Bank Group which provides interest-free development assistance to the poorest countries, will issue the credit. World Bank commitments to Yemen total approximately $2 billion for about 130 operations.