World Bank Continues Support for Yemen [Archives:1998/35/Business & Economy]

August 31 1998

Mr. Inder Sud, Middle East and North Africa Director, World Bank, came on a special visit to Yemen to review with government officials the status of World Bank operations in the country. This includes both the ongoing projects and the areas for future cooperation. He also discussed ways in which the World Bank could assist Yemen to meet the shortfalls in the development budget following the decline in oil revenues in 1997.
The World Bank has been helping Yemen implement its economic program. “Since 1995, when the government started its reform program, the World Bank has provided assistance totaling $360 million for 10 different projects,” said Mr. Sud. “This compares with only $80 million provided in the previous 3 year period. This is an indication of the strong World Bank commitment to help Yemen meet the needs of its population as it moves forward to readjust its economic management.”
The areas of World Bank assistance in the last 3 years have included support for the reform program in the form of balance of payments support as well as specific project assistance in the areas of infrastructure, education, agriculture and social protection.
Highlighting the projects of the World Bank has assisted within the area of social protection, Mr. Sud enumerated the following:
– the Social Fund Project ($30 million),
– the Public Works Project ($25 million) and
– the Southern Governorates Agricultural Privatization Project ($25 million).
All three of these projects are designed to help the poor with employment, basic services and income generation opportunities during the difficult period of economic adjustment. “I was pleased to see that these projects are being implemented efficiently, and are already showing good results. We hope to continue support similar projects in the coming years,” announced the World Bank executive.
With regards to the immediate needs of financial assistance in the light of the short fall in oil revenues, the World Bank discussed with the government a program that makes a start in improving the management of public expenditures. The components of the program includes for the first time a serious attempt to make the civil service more efficient and modern. It would also establish clear priorities among and within specific sectors. This is important to ensure that whatever expenditures are made are directed to the highest priority projects that can give early benefits to the people and towards basic needs such as education and health. “This prioritisation of expenditure, we expect, will become a normal part of the budget process since government resources, even with substantial assistance from the donors, will continue to be limited for the coming years.”
The government considers this program critical to maintain support of the people for the economic reform program that it is pursuing. With the agreement on this program, it is hoped that the World Bank would be able to mobilize the necessary financial resources to meet at least some of the shortfall in development budget.
“I believe that the focus on social protection needs to continue in the future. We have agreed on a follow up projects for the Public Works Project in view of the very good experience to-date with implementation and the fact that all funds have been committed.” The World Bank will allocate additional $50 million for this purpose and expect that a similar amount could be mobilized from other donors. It is also intensifying work in basic education and health.
“Looking to the next three years, I expect to maintain the same strong support for Yemen that we have done in the last three years. Although IDA resources (which are very soft loans available from the World Bank for the poor countries) are very limited, I’m hopeful that we will be able to convince the World Bank’s Board of Directors to allocate at least the same magnitude of resources for the next three years, and possibly even increase them further in view of Yemen’s very good performance.”
The areas of future World Bank support are expected to include health and education with an emphasis on women and children, water resource management, poverty alleviation and encouragement of private investment. “Yemen can count on the World Bank to be its partner in its efforts to improve the living conditions of the Yemeni people,” concluded Mr. Sud.
World Bank Contributions to Yemen’s Reform Program
Public Sector Modernization:
The adjustment credit will support (a) reforms in public administration, (b) budget and financial management reforms (c) expenditure allocations emphasizing poverty and growth oriented expenditures; and (d) reforms in cost recovery, tax and customs administration, US $ 50.0 million.
Civil Service Modernization Technical Assistance:
The program will provide technical support for (a) improvements to personnel and financial management systems; (b) Re-engineering of government agencies with an objective to improve the incentive framework for delivering services and to increase the efficiency of work flow, policies, procedures and organizational structure; (c) the development of a work force adjustment program, US $ 30.0 million.
Legal and Judicial Development:
The project would assist the government in (a) increasing the efficiency of the judicial process; (b) commencing the process of putting in place a legal frame work adequate to encourage private sector activities, US $ 3.0 million.
Privatization Support:
The project will help (a) strengthen the Republic of Yemen’s institutional capacity for privatization, (b) prepare a small number of large transactions for privatization, (c) provide programmatic support for the privatization of smaller assets. The project will primarily finance technical assistance, US $ 20.0.
Education Sector Management Reform:
The project will improve the ability and the effectiveness of the education system at the central and governorate levels to plan, finance, implement and monitor basic and secondary education services, US $ 29.3 million.
Health Sector:
The objective of the projects is to improve the delivery of essential curative and preventive services to the poor, particularly women of reproduction age and young children. The project will strengthen the planning and regulatory role of the Ministry of Health, improve health sector financing and support new interventions for services delivery at the community level, US $ 10.5 million.
Child Development:
The project will follow up on recommendations of a study conducted by UNICEF and the World Bank. The project will design and support maternal and child health care, girls education and early childhood development programs through community based approaches, US $30.0 million.
Sanaa Emergency Power:
The project includes the construction of a new 30MW power plant on a prepared site, and the rehabilitation and upgrading of the existing 20MW diesel-fueled power plant at the Dhabban Power Plant. The operations and maintenance of the power plant, including rehabilitation, would become the responsibility of a qualified private operator under a medium-term performance-based management contract. A PPF advance of US $1.5 million has been to finance preparation costs, US $58.0 million.
Sana’a Water Supply and Sanitation:
The Project will finance (a) an extension of water production and distribution facilities, (b) waste water collection, (c) exploratory water well drilling; (d) technical assistance, (e) preparation and implementation of sector reforms with the Business, No. 478, dated 16th January, 1998, a prequalification notice was published in No. 485, dated 30th April, 1998. Prequalification of contractors for the initial three civil works projects is in the final stages, US $ 35.0 million.
Rural Water Supply and Sanitation (RWSS):
The five year project is to (a) test a decentralized, demand based, community participation and management method, (b) improve rural health by expanding RWSS coverage, and (c) lay the ground for a RWSS Development Strategy and a large scale national program. The project would help rehabilitate existing water supply schemes and build new ones, and provide health education and sanitation infrastructure, US $ 10.0 million.
Solid Waste / Environmental Management:
The project will support improved solid waste collection in small towns and strengthened environmental management, particularly (a) protected area management method (b) coastal zone management, and (c) environmental assessment, US $ 12.0 million.
Ismail Al-Ghabiry,
Yemen Times