WB economic reform angers the poor in Yemen [Archives:2005/817/Business & Economy]

February 18 2005

Mahyoub Al-Kamaly
The lack of social security in Yemen has created criticism of World Bank economic reform. Much of the public believes that through its policies, the WB has further hurt the poor in the country. Yemen has embarked on implementation of economic reforms despite that it is among the least developed countries. In this regard, Yemen occupied the 149th place among countries, according to the report on the human development issued by the United Nations Development Program issued in 2004.

The poor in Yemen's rural areas are estimated at 45% of the total population and those live on less than two dollars per day.

Information reveals that the social safety net, due to weakness of its capabilities, has not succeeded, up to now, in putting an end to poverty and it is impossible for it to help meet all the people needs and requirements.

The dissimilarity between the inhabitants of the cities and countryside with regard to demanding assistance from social security funds leads towards the increase in number of the poor every year.

Field studies affirm that the phenomenon of child labour is growing in Yemen. The volume of child labour in 1999 is estimated at around 350,000 children. More than half of them perform agricultural works. However, this contributes to the increase in proportion of the poor in Yemen.

Systems of social safety net in Yemen, supported by the World Bank, are various and here is a short account on each of them.

The Social Fund for Development:

The World Bank (WB) and the Yemeni government with the aim of improving living circumstances and creation of income-yielding job opportunities through securing basic services for the poor established the Fund under support. This would be realised through supporting small and smaller projects and development projects in areas of education, health and providing of waters.

Appropriation of the Fund in its working plan for the year 2005 amounted to around $80 million. Those appropriations include the implementation of 1037 projects aimed at developing more than 1.2 million citizens have benefited from programs and plans of this fund and there has been availability of many thousands of job opportunities for the unemployed.

Securities, salaries and programs of social care

According to studies conducted by the International Labour Organisation, the programs of securities and salaries accredited in Yemen arouse concern. That is ascribed to intermingling of responsibilities of administrative bodies and the existence of gaps in legal texts. For instance the terms of the law of social security No. 26 for the year 1991 stipulate that the employees in the private sector of institutions employing 5 workers the proportion of subscription for workers is 6% and 9% for employers while the state does not contribute to this proportion and also there is the absence of pension salaries of low rank jobs. That has led to the remaining of a large number of salaries paid to pensioners 25% below the line of poverty and this doubles the poor cases.

State Establishment for Social Security

This establishment undertakes the running of the fund of salaries and the fund of the handicapped that cover affairs of around 45 thousand persons and a proportion of 1.5% of the workforce. It has been merged with the state authority for salaries in 1996 under recommendation of the International Monetary Fund the it separated from it in 1999 according to recommendation by the WB and that made it face big challenges due to transfer of the public sector workers to the private sector in the privatised establishments.

Preliminary statistics studies confirm that contribution of this establishment is not enough in raising the number of beneficiaries from those who are dead, those pensioned, and this contributes to increasing the proportion of the poor.

The state authority for securities

This is specialised in files of insured employees affiliated to the public sector and covers about 480 thousand employees, 180 thousand of whom are in education. The state authority is however suffering from its non-possession of electronic information systems and depends on files of the civil service. In addition, that has led to rise in the proportion of the shadowy contributors to records of employees of double jobs at the expense of those insured ones.

Social Welfare Fund

Among the social safety net is the Social Welfare Fund established in 1996 to alleviate the negative impact of the program of economic reforms and it is considered one of the more important elements of social protection. It has managed to offer financial assistance to half a million persons in 2000 and in 2002 it allocations amounted to YR 11 billion. It has been planned to increase the number of beneficiaries from it by a rate of 200 thousand persons each year and to allocate an amount of 2000 to 4000 riyals to a family, but the sum is very little for a family comprising of five members and not enough for its living for five days.

Although the authorities efforts for controlling the assistance and conveying it to those deserving it of the poor segments, the field reports indicate that there is an interference by certain influential persons registering individuals who are listed under the well-to-do at the expense of the poor who deserve it. This also creates resentment against the net of social safety supported by the WB.

Professional health and safety

The ministry of social affairs and labour undertakes organisation of professional health and safety in case of incidents taking place during work but indicators point out that it is a low standard service in non-governmental sector and that leads to rise in cases of poverty due to absence of health insurance for the workers.

Project for building capacity

In completion of the social protection, there has been an adoption of a project concerned with building capacities in the field of equality between the two sexes in the establishments through the application of strategies between workers and employers tackling the question of the social gender and to upgrade the women participation in development. However, the project is still at the beginning for improving living circumstances of the woman and her family and the work for reducing the rate of poverty.

According to opinions of citizens, al the efforts that have been exerted for alleviating impact of the economic reforms, under support of the WB, have not succeeded until now in achieving the goals aspired for from them along with the increase of poverty rates in Yemen by doubled percentages.

Establishments of social security include the Social Fund for Development, the securities and salaries, programs for social welfare, the state establishment of social security, the state authority of insurance and the social care fund.

Nevertheless, despite of the efforts those funds exert, the shortage in financial appropriations does not help them achieve the aspired for success for reducing the number of the poor in the country.