Yemen - Bank Information Center

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Yemen is the poorest country in the MENA region, with an estimated 54.5% of the population living in poverty.

The escalation of the Houthi insurgency in 2014 and the onset of Saudi Arabian-led coalition airstrikes in March 2015 has compounded an already devastating humanitarian situation, tipping Yemen’s ailing economy into further crisis. In view of the dire security situation and the lack of an effective government counterpart, the World Bank has now closed its central office in Sana’a and suspended its operations in the country until further notice.

In 2012 the Yemeni government embarked upon an ambitious development plan to address key governance reforms, structural economic issues, as well as an urgent humanitarian crisis. During this period the World Bank took a leading role in providing technical and financial assistance to the country.

While Yemen has typically relied on oil revenues for approximately 70% of its GDP, it has also been heavily reliant on donor funds from bilateral and multilateral sources. The World Bank has had enormous influence over the policies and programs of the government and the country’s ability to receive further loans or aid. To date, Yemen has had a turbulent experience implementing some of the reforms prescribed by the Bank and its sister institution, the IMF, and the country has not had the capacity to absorb all of the money it has received in grants. As Yemen faces a number of critical development challenges, compounded by the violence in recent years, the World Bank has been providing technical and financial assistance to the Yemeni government, while also helping to coordinate donor finance to Yemen. These roles make transparency, accountability and participatory mechanisms for civil society at the World Bank critical. BIC’s Middle East & North Africa (MENA) Program has been working to ensure that these spaces are available at the Bank and is working closely with Yemeni civil society in making use of these spaces.

As of March 2015, the Bank had 36 active projects in Yemen but recently suspended all operations in Yemen due to the on-going political crisis. BIC recently produced a country study for NGOs and other actors to find out more about the work of the World Bank in Yemen and how civil society can play an active role in engaging and influencing it.

Read the 2014 study below:

An Overview of the World Bank in Yemen and Civil Society’s Role, Bank Information Center, February 2014

BIC also maintains an up-to-date list of all World Bank projects that are proposed or active in Yemen and this list can be found below:

Proposed and Active World Bank-funded Projects in Yemen, Compiled by Bank Information Center, June 2015

The World Bank played a pivotal role in helping shape the development agenda after the political transition that began in 2011:

Setting the stage – The Bank led a team consisting of the Bank, the United Nations, the European Union, and the Islamic Development Bank, in producing a Joint Social and Economic Assessment (JSEA) analyzing the impact of the political turmoil on Yemen’s socio-economic condition. This assessment is considered a “key component of the transition process, informing the economic recovery plan of the Government of National Reconciliation, and serving as a basis for coordinating the efforts of the international donor community in support of the plan.” It identified socioeconomic challenges and opportunities and proposed priority areas for support thereby offering a framework for more coherent international assistance.

Setting the framework – The Bank advised the Government in developing its Transitional Program for Stabilization and Development (TPSD) which was aimed at reflecting the Government’s priorities for the short and medium term. The TPSD balanced responding to the major humanitarian crisis, which had been compounded during the 2011 instability, and institutional and governance reforms which were necessary for the transition period and beyond to be successful.

Finding the money – The Bank co-hosts Yemen’s donor conferences and associated technical meetings the biggest of which took place in Riyadh on September 4 and 5 2012, in which the Bank rallied for financial support to Yemen and played a key role in raising the level of commitments to USD 6.4 billion (later to become almost USD 8 billion). Part of this financing came from the Bank’s own commitment of USD 1.1 billion which included USD 700 million from earlier undisbursed commitments along with USD 400 million of new commitments. The World Bank has also helped the GoY access funding from the Deauville Partnership/MENA Transition Fund which was set up in 2011 to support Arab countries undergoing political and economic transitions.

Coordinating the plan – The Bank also plays the donor coordination role. Donors and the GoY agreed upon and signed a Mutual Accountability Framework (MAF) which included the reforms the GoY committed to in the short and medium term, as well as the corresponding commitments from donors. It consists of six pillars namely:

Work towards Coherence between the Priorities of the Budget, the Public Investment Plan.
Create Employment Opportunities particularly for Youth and Women.
Good Governance, Rule of Law and Human Rights.
Increase effectiveness of key service sectors, and partnering with the private sector.
Meet Emergency Humanitarian and Material Needs and Deliver Basic Services to Citizens.
Civil Society Empowerment and Partnership.

One of the Bank’s roles is to ensure that all parties adhere to the MAF.

What we can say then, is that the Bank is a key influencer of the development process in Yemen. The Bank Information Center’s (BIC) Middle East and North Africa (MENA) team has been working to promote transparency, accountability and participation of civil society in the Bank’s strategies and operations in Yemen, and this work is even more important given the Bank’s role in the transitional period. We work on two fronts: pushing the World Bank to increase its openness, and providing civil society with the necessary tools to take advantage of the spaces available for them and engage the Bank.

Useful Webpages

World Bank Yemen country page
IMF Yemen country page

Useful Documents

Yemen’s Transitional Program for Stabilization and Development (TPSD) 2012-2014, Ministry of Planning and International Cooperation, Government of Yemen, 2012
Mutual Accountability Framework, Government of Yemen, September 2012

Civil Society Analysis

Assessment of the World Bank Consultations with Civil Society Organizations in Yemen (in Arabic), June 2016
World Bank Road Projects: Between Rural Development and Environmental Hazards, The Studies and Economic Media Center (SEMC), December 2014
An Overview of the World Bank in Yemen and Civil Society’s Role, Bank Information Center, February 2014
Proposed and Active World Bank-funded Projects in Yemen, Compiled by Bank Information Center, February 2014
IFIs and the Middle East & North Africa: A Primer for NGOs, Bank Information Center, 2007
BIC’s Middle East & North Africa Program, Bank Information Center
Did You Know? Private Sector Participation in the Water Sector: The Role of the IFIs in the MENA region, Bank Information Center, September 2007

Should you have any questions or comments about the work that BIC is doing in Yemen, please contact:

Amy Ekdawi
Bank Information Center
1023 15th St. NW, Washington, DC 20005
Email: aekdawi@bicusa.org
Follow BIC-MENA on Twitter @BICmena

As for the World Bank, you may contact:

Ebrahim Al-Harazi
External Affairs
Middle East and North Africa Region
World Bank-Yemen
P.O. Box: 18152
Tel: (+967-1) 413 708/10
Fax: (+967-1) 413 709
Mobile: 736600510
http://www.worldbank.org/yemen

Update: The World Bank’s Sana’a office remains closed following the suspension of operations in Yemen in March 2015. The Yemen country team is currently operating from the Bank’s Cairo office.