WB decreasessubsidies to Yemen [Archives:2005/903/Front Page]

December 15 2005

By: Mohammed Al-Jabri
SANA'A, Dec. 12) In a press conference held Sunday in Sana'a, Christiaan Poortman, World Bank Vice President for Middle East & North Africa Region, urged Yemeni government to fight corruption and to adopt anti-corruption programs. He affirmed that the performance indicators for Yemen fell remarkably and did not show progress. Therefore, the World Bank's assistance decreased by 34 percent, that is the US 420 million -assistance will be reduced to US 280 million over the next three years.

Mr. Poortman made it clear that Yemen failed to achieve reforms and did not succeed in improving the investment environment. He pointed out that only 15 percent of oil derivatives subsidies goes to the poor, while 85 percent goes to those who are not poor.

“The poor should receive more subsidies in order to make progress,” said Mr.Poortman. The reduction of World Bank's subsidies to Yemen has been decided after it was clear that much of the assistance does not help reduce poverty rate and achieve benefits.

Regarding the evaluation of WB in Yemen over 2004 and the first half of 2005, Mr. Poortman explained that “Yemen's performance was not as good as it should be”, and yet there is still an opportunity for Yemen to “actually improve its performance and consequently some of that 34 percent of reduction is going to be put back.” Next year, he added, WB will look again at those indicators and the extent to which Yemen's performance improved. However, Mr. Poortman appreciated the government initiatives to improve its performance. He said the government has succeeded in implementing projects funded by the WB through the Social Fund for Development to develop educational and urban routes fields.

On the other hand, Mr. Poorman referred to population issue, where he said, ” Population growth in Yemen is very high, with 3 percent of population growth rate.” He warned the increasing growth of population would not help Yemen achieve economic progress. He called on the government to multiply its efforts to reduce the problems resulting from population growth.

Moreover, it will be difficult for Yemen to achieve most of the Millennium Development Goals, as it is the case in some countries, said Mr.Poorman.

As for corruption, Mr. Poorman said, ” corruption is the enemy of the poor and development. Yemeni government should give this issue priority and take it for granted.” He also asked the civil community society and pressmen to fight corruption.

He pointed out when the WB asks them to fight corruption; it is not a way to impose policies on government. If corruption will not be fought, subsidies will be reduced, he added. In this regard, Mr. Poorman affirmed the WB is ready to help Yemen fight corruption, but it would be more appropriate in order to help its people.

With respect to Yemeni society view on WB, Mr. Poorman said, “People do not have a good image of what the World Bank does. 90 percent of the aid is supporting projects for the poor in a very direct manner. The World Bank is the bank of the poor. Most of the projects implemented have helped girls receive education.”

On the other hand, Mr. Mustafa Rouis, Manager of World Bank Office in Yemen, remarked that the WB's support to Yemen is very strong, as indicate by the fact that Yemen has one of the largest project portfolios in the Middle East and North Africa region. Yemen's current portfolio has 18 projects with total commitments of US$ 731.1 million of which US$ 191.2 has been disbursed.