Social Service Development [Archives:1998/12/Focus]

March 23 1998

Dr. Adel Salem,
Ministry of Labor & Vocational Training
Social services of all types are needed by a large proportion of society. The annual per capita income ($95 in 1995) is below the poverty line, illiteracy rates are high, purchasing power is weak, the real wage value is decreasing, and the local currency is weak against major hard currencies. All these factors have led to large increases in poverty and unemployment. All efforts made until now to tackle these problems have not been able to satisfactorily contain them.

However, considering that Yemen is one of the least developing countries in the world with an acute conflict between a rapid population growth of 3.7% per annum and limited economic development, what has been achieved so far raises optimism. The impediments that led to greatly slowing down the social development process were mainly due to almost insurmountable causes:

1- The concentration of most population centers in mountainous areas has impeded providing basic services to the majority of the people in Yemen for the last 20 years.
2- About 70% of the people live in small populations as farmers living in little villages of no more than 500 inhabitants.
3- The proportion of people under 15 years old forms 50.3% of the total population. This is one of the biggest population problems because this age group heavily relies on others for livelihood and is in need of various services.
4- Deficiency in water resources and a low individual share of water has continuously led to neglecting arable land and letting them be claimed by the desert. This in turn also leads to the deterioration of pastures and an increase in internal immigration. Data indicates that underground aquifers are depleted at a rate far exceeding the rate of replenishment. It is expected that 20% of the population will suffer from lack of drinking water by the year 2000.
5- The high ratio of illiteracy – 56% – reflects the general low living and cultural standards of the population and their deteriorating economic activity. Illiteracy will continue to negatively affect social development plans for the next 30 years, unless it is tackled by far-reaching practical measures.
6- Despite the high population growth rate of 3.7% and a 9.3% real domestic product growth retained in 1995, the standard of living during 1990-1995 had dropped by an annual rate of 20%. This means a real drop in the population’s living standard, reaching $95 per capita in 1995. The proportion of poverty has, accordingly, risen from 21.3% to 34% of the population.
7- Tackling social development issues has in the past relied mainly on the government’s efforts. It did not expand to include wider popular participation such NGOs and the private sector.

NGOs are able to assume a larger, more important role in the process of social development through improving women’s conditions, family care, family planning, eradication of illiteracy, child care, implementing reproduction health programs, vocational training for women, etc. The number of cooperative associations established up to the end of 1995 reached 596, while, the number of charities, social organizations, and trade unions reached 611 during the same period.

The private sector can also make a valuable and effective contribution to the process of social development through employing and developing the skills of the workforce and supporting the Vocational Training Fund and the Poverty Combating Fund. The private sector has been able to absorb 39.78% of the total workforce through its 9 universities, 66 schools, 350 hospitals and health centers, 364 factories, 12 navigation companies, 100 poultry farms, and many other establishments. The government is now promoting the private sector and understanding its important role in development. It has been keen on providing a suitable economic climate to induce the private sector to invest more capital. The following steps are being taken by the government:

1- Reducing the rate of interest on bank loans and removing the ceiling on private sector credit.
2- Reviewing financial and taxation laws and reducing taxes on non-luxury and non-consumer goods as well as raw materials for the manufacturing industries.
3- Reducing customs tariff rates, simplifying the levying procedures, implementing comprehensive reforms in tax and customs levying organs.
4- Delegating more financial and administrative powers to ministries and governorates in order to speed up the execution of service, developmental and environmental projects.
Gauging the extent of the government’s success in its social development policies is closely associated with the improvement in the people’s living standards. So the government is primarily responsible to successfully implementing the process of social development through short and long-term measures. It must support social projects and programs, assist charities, cooperatives and women, implement illiteracy-eradication programs tackle poverty, improve public works, security, education, health care, transport, water, care for minors, the handicapped and the elderly, combat unemployment; protect the environment, develop the judicial system and modernize public services and the infrastructure.

The progress of social development has been able to gather momentum since 1995. During the first and second stages of economic, financial and administrative reform in 1995 and 1996, the government had been able to achieve tangible results. These achievements include reducing inflation to 10%, absorbing surplus cash, reducing the budgetary deficit of 1996 to 4%, stabilizing the rate of exchange of the local currency against the dollar between 125 and 135 riyals to the dollar, and halting the increase in the prices of consumer goods. The improvement in the financial sector was reflected in the increase and development of social services provided to the people. The following was achieved:

1- Establishing the Social Development Fund, working with World Bank support, to reduce unemploy-ment and develop the workforce.
2- Establishing the Social Care Fund, which studied 50,000 cases.
3- Alleviating the hardships experienced by public and mixed-sector employees and pensioners by providing them with a 10% salary increase.
4- The number of cases benefiting from the Social Care Law rose to 100,000.
5- Allocating YR200 million for assisting youth and sport activities.
6- Increasing social service allocationsin the general budget, especially for the health and education sectors, in order to improve the quality of the service they provide.
7- Completing infrastructure projects, especially those connected to water resource development, roads, ports and airports.
The following table shows budgetary allocations for various social development sectors during 1996 and 1997.