Friday, 10 April 2009

Terror behind Yemen's economic decline

Terror behind Yemen's economic decline
By Nasser Arrabyee/06/04/2009

The terrorism and rebellion were behind the slow economic growth in Yemen over 2006-2008 said the Yemeni Deputy Prime Minister, Minister of Planning and International Cooperation, Abdul Kareem Al Arhabi on Sunday.

"The slowness of the economic growth was because of the drop in oil production, terrorism, the Al Houthi rebellion in the north," Al Arahabi said in a conference to assess achievements of a socio-economic plan to reduce the poverty in Yemen.

The socio-economic plan of 2006-2010, was supported by $ US 5.5 billion by the GCC and international donors in a GCC-sponsored conference in November 2006, in London.

About $ US 3.7 billion came from the GCC countries which took a decision in 2005 to qualify Yemen for joining them in 2015.

Yemen has already joined eight GCC organizations in fields of measurements, industrial consultations, control and audits, radio and TV, education, health, labour and sports.

The plan aimed to achieve an economic growth of 7.1 %, but it was only 4.3 at the end of 2008.

It will not achieve the planned economic growth even at the end of the 2010.

"Over the two coming years, 2009-2010, we expect the growth to be 5.7 %, given the new exportation of the gas," Al Arahbi told about 250 participants in the third follow up meeting of the consultative group which was co-chaired by Yemen, WB, and GCC.

Al Arahbi said that the poverty was reduced from 41.8 % in 1998 to 34.7 % in 2006, but the inflation rates and impacts of the global food crisis affected those efforts of poverty reduction.

He said the overall assistance and aids given to Yemen was little compared to other less developed countries.

"Every Yemeni person takes only 13 dollars of all assistance and loans compared to 44 dollars in the less developed countries," he said.

The WB vice president for MENA, Daniela Gressani who co-chaired the meeting said," I believe the first and the second follow up meetings were very successful, and I hope this one will be equally fruitful."

The European donors, said in a joint EU statement read in the meeting, " There are other factors that impede Yemen's development: terrorism, piracy, refugees, and natural disasters, but we remain committed to work with Yemen on these challenges.

They expressed concerns over the approximately 50 % cuts of the state budget made by the Yemeni government after the drop of the oil price this year.

"We underscore the need for the government to present a sustainable plan to raise additional revenue and make expenditure cuts that do not negatively affect development in the country. We are concerned that there could be inadequate operational budgets to keep schools, health facilities and water supply running," Said the joint EU statement.

The UN representative in Yemen from her part, said," There risk that service delivery could further decline and would threaten even minimal livelihoods, thus leading to discontentment and social instability which could further destabilize an already precarious region."

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