WB Report: Strategic Intervention urgently needed [Archives:2007/1061/Business & Economy]

June 18 2007

By: Raidan Al-Saqqaf
[email protected]

A recent report by the World Bank has indicated that during the last three decades, Yemen has experienced a profound and dramatic change, where the economy has seen a shift from an agriculture-dependent economy to a more diversified and market economy, hereby changing the underlying fundamentals of the Yemeni business environment. The report stated that the shift towards a market economy from the subsistence agriculture of the north and the command economy of the south has transformed livelihood systems.

This change is understandable considering the global economic transformations and the geo-political changes in Yemen. The report indicated that the emergence of a new governance system as a result of unification, hereby the formal and informal “rules of the game” has changed; in Yemeni culture, the land and the livestock were the source of wealth and employment

During the last three decades, this understanding has changed to the realization that the source of wealth and employment is the government. The report states: “the increasing concentration of economic and political power suggests that it carries with it the risk of elite capture of development benefits and the further widening of the gap between the rich and the poor.”

The World bank report, entitled 'Country Social Analysis' has the objective of analyzing the social context and trends in Yemen in order to identify the constrains and opportunities for development. Inline with that objective, the report concludes that the effectiveness of development support to Yemen can be enhanced by addressing the following inequalities:

– Access to water and land needs to be more equitably distributed;

– Youth, Women, and Rural people are becoming increasingly marginalized from the economy as traditional livelihood systems decline;

– With rapid urbanization, shanty dwellers are becoming increasingly socially and economically marginalized;

– State expenditures tend to favor the non-poor.

The report also highlights a number of strategic areas of intervention, including improving equity in the distribution of natural resources such as water resources, concentration of land ownership, and enforcement of expropriation laws which help the poor and marginalized social groups.

Another strategic intervention is in improving equity in distribution of public resources and services, in terms of inequality in public expenditures, inequality in access to healthcare, and the mismatch between education provided and labor market demands especially in rural inhabitants.

In addition to that, another strategic intervention is in promoting inclusion in economic opportunities; with focus on the high rates of youth unemployment and underemployment, and the employment of women in rural areas.

Moreover, improving social accountability was yet another area for strategic intervention, through the strengthening civil society to hold elected officials and service providers accountable, evaluate the quality of public service provision, provide access to justice especially for women and the poor, and involve women in decision making.