Yemen receives 70 percent of London donor pledges [Archives:2008/1127/Front Page]

February 7 2008

By: Yemen Times Staff
SANA'A, Feb. 6 – Participants at a Feb. 4 post-consultative group follow-up meeting in Sana'a noted that Yemen faces many challenges, with development being achieved slowly.

More than 250 attended the meeting, including donor representatives from both regional and other nations. Abdul-Karim Al-Arhabi, Yemen's Minister of Planning, Abdul-Rahman Al-Atiyah,Gulf Cooperation Council Secretary-General, and Daniela Gressani, World Bank regional vice-president for the Middle East and North Africa, co-chaired the event.

Entitled “One Year after the London Consultative Group Meeting,” the event sought to review what had been implemented during 2007 concerning donor nations' billions of dollars in pledges made to Yemen at the 2006 conference in London. Such pledges totaled $5.31 billion by December 2007, with $2.92 billion in grants and $2.39 billion in soft loans.

The pledges cover 84 percent of the Public Investment Program financing gap of $6.3 billion, with 70 percent of such pledges already received by Yemen's government. Distributions for funding projects within the financing gap are at 57 percent. However, in terms of effectiveness, only 18.5 percent of the total allocations have been signed into actual agreements.

As for GCC pledges, 65 percent have been distributed, with Saudi Arabia having given 91 percent of its London pledge. Organization for Economic Co-operation and Development/ Development Assistance Committee bilateral donors have distributed 73.3 percent of their pledges, with 23.2 percent of such allocations being signed into agreements, whereas multilaterals have allocated 75.4 percent of their pledges, with 24.2 percent being signed into agreements.

At the meeting, Gressani noted that Yemen continues to face a difficult economic situation. “For the past two years, the [Yemeni] economy has averaged 3.2 percent annual growth. While this is slightly faster than the population, it's less than half the 7 percent needed to make a significant dent in poverty, which continues to affect more than a third of the population,” she indicated.

Gressani added that Yemen's inflation, fiscal and current account balances remain mediocre due to a sharper than expected decline in oil production.

Yemeni Prime Minister Ali Mohammed Mujawar noted that the nation's economic and social development have improved over the past years, especially regarding education, health and infrastructure.

“Constant economic growth and poverty fighting require an appropriate atmosphere for investment; thus, Yemen has made extensive investment reforms. The coming period will witness even more economic reforms seeking to make the investment atmosphere more attractive,” he stated.

Despite such achievements, the Yemeni prime minister indicated that many challenges remain for such development, topped by rapid population growth, high illiteracy, poverty and unemployment rates, Yemen's being among the lower developing countries, aggravated water and environmental crises and limited government resources.

Concluding his remarks, Mujawar said, “We in [the Yemeni] government look forward to working with the donor community and our development partners to overcome such challenges and plan a brighter future for Yemen.”

A statement on behalf of those bilateral donors represented in Yemen urged the Yemeni government to attend to the needs of citizens in its remote underserved governorates, where failure to address development needs could increase the risk of further conflict.

“Deteriorating security also makes it more difficult for Yemen's development partners – both domestic and international – to carry out their vital development work. Overall, the deteriorating security situation will make it even harder for us all to achieve the ambitions set out in the Development Plan for Poverty Reduction and the National Reform Agenda,” the statement read.

The statement went on to say that the fragile state of Yemen's economy as well as its extremely high population undermine the country's ability to meet the United Nations' Millennium Development Goals.

“Instead of halving the proportion of those without access to safe drinking water by 2015, Yemen faces the risk that water soon may be unavailable in all critical water basins. Therefore, strong national leadership is needed to reverse the current unsustainable use of water in Yemen,” the statement noted.