Will Yemens poverty alleviation strategy be successful? [Archives:2002/12/Business & Economy]

March 18 2002


It is expected that both ministers of economic cooperation of Germany and the Netherlands will pay visits to Yemen from April 2 to 4, with the view of discussing with the Yemeni officials issues of bilateral cooperation and means of enhancing them. The two countries are scheduled to contribute to the activities of the poverty alleviation strategy currently under implementation in the Republic of Yemen.
The two countries are two of the top donor countries to Yemen and have funded many development projects across the country.
The visits of the two ministers will coincide with the launch of the poverty alleviation strategy, after a seminar organized by Aden University has stressed the importance of creating a climate to help for investment and create more job opportunities.. Similarly, the seminar called for creating a competent management which is capable to efficiently run the social care network.
Minister of Planning & Development, Ahmed Sufan said in a press conference held recently that the ability of the Yemeni economy to create more jobs tops the current government’s agenda.
“The real test is to eradicate poverty and to achieve a remarkable economic growth,” he added. The Minister of Planning also pointed out need to tap into the resources of different social groups, especially women.
The partial objectives of the strategy are represented by reducing the rate of food-related poverty to 21.7 percent, reducing the population growth to 3 percent, raising life expectancy from 61.1 years to 62.3 years. The strategy also aims at providing 69 percent of water to urban areas instead of the current figure which is 64 percent. Electricity as well as water sanitation services coverage are expected to surge to 4 percent and 8 percent respectively.
The strategy also focuses on reducing infants and children moralities under 5 years to 95.9 per thousand newborn. As for mothers mortality rate, it will aim at reducing this to 15 percent.
The strategy also aims at increasing the overall enrollment at the basic grades of education to 69.3, and increasing the overall enrollment to 41.3 percent instead of 31.7 percent.
Women’s presence at the labor market will rise to 24.4 percent instead of 21.5 percent, while unemployment as well as partial unemployment rates will be reduced to 9.5 percent and 12.5 percent respectively.
Poverty is one of the gravest problems, which a high portion of the society are suffering from, as the individual share of the gross domestic product GDP does not exceed USD 280, according to some statistics of the World Bank.
Similarly, the average individual share of the gross domestic product rose from US $302 in 1995 to US $375 in 2000. However, the survey admitted that the real living standard dropped by 6.9 percent after deleting the annual average inflation totaling 3 percent in 2000. It was 10.2 percent in 1999, which in turn has made the problem even worse.
The government has attempted to secure US $39 million for funding the projects implemented by the Social Fund for Development. The government also decided last December to establish a bank for the poor, named the Hope Bank for Microfinance to help alleviate poverty. This bank will not have any interests for the loans made to the poor. This is the first bank of its kind in Yemen where 60 percent of the population here (18.5 million) live under the poverty line.
The capital of the bank will total US $6 billion of which $2.5 billion will be allocated by the government of Yemen. Whereas the Arab Gulf Fund for supporting UN development organizations will fund it with $2.5 million. The Yemeni private sector will contribute with USD one million.
Unemployment is the second largest problem in Yemen, after poverty, which is the direct results of the difficult economic situation the country has been going through since the second Gulf crisis in 1990. The current unemployment rate is 20.2 percent, i.e, it has doubled within the last five years. Though independent sources confirm that the actual rate is 40 percent and it is subjected to increase in annual basis.
Minister of Planning & Development confirmed recently say that 250,000 Yemenis enter the job market each year which is a low proportion of the Yemeni labor force estimated at 4.1 million.
Will the government be able to reduce the poverty rate and improve the living conditions of the poor segment of the society?
It sounds that the answer for this question will be through having more investments and attracting foreign investment in particular, otherwise, all the government’s efforts will come to know avail.