WB Report: Yemen Between Pincers Claws [Archives:2001/12/Focus]

March 19 2001

Jalal Al-Sharaabi
Yemen Times
The 1995 economic reforms have ironically led to economic disaster instead of rectifying Yemen’s economy. Today, the percentage of people living below the poverty line, the unemployment rate and other economic problems have risen drastically.
This could be due to the fact that reform concentrated on price control and lifting subsidies on basic goods and services.
The International Monetary Fund focused on service establishments and called for the privatization of some service sectors, such as the National Bank which is considered one of the most successful banks in Yemen. As well, privatization of many of the government hospitals such as the Republican Hospital has resulted in an increase in medical expenses.
Because both IMF and WB are preparing ready-made theories for economic construction, application of these theories in Yemen leads to negative results due to the fact that the Yemeni Economic infrastructure is not prepared for that. Besides, primary studies on what is convenient for economic reform process are not conducted yet.
The concern the IMF has displayed regarding the increase of inflation in Yemen by 11% is groundless and exaggerated and misses the core problem. It did not build its reforms program on the infrastructure or on addressing economic corruption which is the main reason for the position Yemen’s economy is in today. In fact, relying on oil and presuming the increase of international prices is a myth in itself which will not itself solve the economic problem of the country.
The experience of the IMF and WB in Sudan is an example of how tragic the reform programs are, and the 35% increase in the unemployment rate there is a sure sign of failure.
While Yemen is struggling hard to overcome its foreign debts, WB and IMF are trying to dump Yemen with more debts under the excuse of following economic reforms policy of free market and globalization.
After a period of 6 years, it is obvious that there is no serious intention for rectifying the economic deterioration, in spite of the wide-spread activities of the WB as well as the IMF in the country. So, for how long will Yemen have to give in to the threats of inflation, or currency breakdown these organizations keep waving in the government’s face? What is the actual aim behind all this interfering which reached the level of promoting constitutional amendments under the excuse of reform.
It is a clear outcome of all these strategies that Yemen has come to be at the mercy of pincers claws; it’s a new type of invasion this country is suffering, and a heavier burden on the citizen as well.