Yemen relationship with the WB in the balance [Archives:2004/771/Business & Economy]

September 9 2004

Yemen has been much angered upon media statements mentioning that the World Bank has threatened the Yemeni government of denying assistance to Yemen because it has not met its promise of implementing some economic reforms. Official sources have given outright refuted to that news, stressing that the WB's relation with Yemen were based on mutual understanding of the real economic and social situations in the country.
Deputy Premier, the minister of planning and international cooperation Ahmed Soufan said international organisations were cooperating with Yemen in offering requirements of funding some development project in various fields. The minister added that Yemeni deliberations with the World Bank and the International Monetary Fund held recently had discussed directions of the third five-year plan 2006-2010 programs.
The Yemeni government is presently preparing the third five-year plan in cooperation with international organisations and the millennium development project of the UN Development Program. Meanwhile the acting director of the WB in Yemen Naji Abu Hatem says he has no information on what has been mentioned about the WB threats of cutting its aid to Yemen, adding that the bank had two years ago offered the Yemeni government three choices.
1- It would keep the present level of assistance the bank is offering if the government performance continued at this level of reforms.
2- It would raise the level of assistance if the government's performance levels regarding aspects of reforms were improved.
3- It world reduce the level of assistance from its present amount if he government performance in the area of reforms got lower.
Mr Abu Hatem said in a press statement that the volume of assistance represented by the total value of projects supported by the WB amounted to About $ 600 million while it is expected that $ 300 million would spent annually at the best of cases.
Observers of economic affairs in Yemen indicate that the government's performance for this year has seen a big receding in the area of fighting poverty and implementation of development and services projects despite of the rise in oil prices and improvement of its revenues in general. People specialized in economic affairs add that the WB is actually exerting pressures on Yemen to accept price reform doses that in turn would aggravate the living condition and create for the private sector and the society more problems and challenges. However, according to some official data, Mr Abu Hatem sees that the Yemeni government has walked long distances in the area of reforms and is working hard in administrative reforms.
The WB confirms that Yemen has in the coming stage record positive indicators in administrative reforms and without that; the state's plans would remain incomplete and inactive.