Armies of Liberation

Al-Baidha’a is second poorest province in Yemen, WB’s report says

[21 December 2007]

SANA’A, Dec. 21 (Saba) - Al-Baidha’a province was considered the second poorest province in Yemen after Amran province, the World Bank’s (WB) report on Poverty said.

According to the report, the poverty rate in al-Baidha’a was about 51.9% generally and that poverty rate in urban areas of the province was 16.6% and in countryside about 59.8%, however the poverty rate in Yemen is 34%.

The province leadership has organized a symposium on poverty with participation of international experts to evaluate poverty in the country.

World Bank 41336
YEMEN ECONOMIC UPDATE
Yemen Economic Update is a quarterly report that consists of five sections. The first section highlights
major economic and policy developments. The second section provides a special topic on the Yemeni
Economy. The third section summarizes new legislation, publications, data, conferences, and donor
activities in Yemen. The fourth section describes World Bank operations in Yemen and summarizes
ongoing operations. The fifth section gives detailed information on World Bank publications and
providescontactinformation.

Inside this Issue:

1 Summary
2 Recent Economic
Development
SUMMARY
3 Macroeconomic
Development and Progress was made in resolving some areas of internal conflicts,

Outlook but new fissures are opening up. The long-running conflict

4 Structural between the Yemeni government and the radical Houthi group in

Reforms and the Saada governorate, northern Yemen, is moving closer to a
peaceful resolution, with the government already announcing plans
Policies
and financial aid packages for the reconstruction of the war-
5 Outlook damaged areas in the North. The government is taking serious
6 Economic and measures towards controlling the spread of personal arms. Holding
Sector Dialogue a fair election process for the president and the local councils is
7 New and widely viewed as a good sign in political stability. However,
Noteworthy failures in managing short-term costs of civil service reforms and
8 World Bank inflation have sown seeds of discontent mainly in the southern parts
Operations of Yemen, where riots are repeatedly breaking out.

9 World Bank
Publication
Yemen’s macroeconomic performance showed mixed results in 2006.
Oil production declined by 8.8 percent, while non-oil growth
continued at a fair pace of about 5 percent, leading to an overall
growth rate of 4 percent, slightly less than the 4.6 percent of the
previous year. Meanwhile, 2006 prices of Yemeni crude exports

The World Bank Group increased by 22 percent, helping to sustain a positive–albeit a small–
current account balance and push foreign reserves to the equivalent of
Sana’a Office
about 11 months of imports. Similarly, government-related oil and
gas income increased by more than 40 percent, leading to a small fiscal
surplus for the first time in many years. On the negative side,
inflation soared by 18.4 percent, due to demand pressures and a
significant jump in the cost of food and transport.

For more information about items in this Update contact Ali Alabdulrazzaq (aalabdulrazzaq@worldbank.org) or Abeer Aleryani
(aaleryani@worldbank.org) the World Bank Office, Sana’a.

FALL 2007

The outlook for 2007 calls for a slight deterioration. In the oil sector, while prices are
expected to remain unchanged from the previous years, crude oil output and exports are
expected to fall by about 10 percent, following the 8.8 fall in the pervious year. As a
result, oil’s contribution to growth in fiscal and current accounts will fall. Therefore,
average growth will slightly decline to 3.8 percent, with the non-oil output remaining
relatively stable, sustained capital spending both from private and public sources. Owing
to rising expenditure and shrinking oil revenue, the fiscal balance is projected to result in
a relatively large deficit of more than 5 percent. Similarly, the current account balance is
expected to turn into deficit (about 4 percent of GDP), for the first time in many years. On
the positive side, the trend of inflation for the first half shows promising a decline in the
average rate for the year as a whole.

Inflation cooled off for most of the first half of 2007, but started to edge up again in
June and July. In 2006, the inflationary peak occurred during the months of September
and October when the all-items price index jumped by nearly 12 percent. Since then, the
inflation rate has gradually been easing, with the average rate increase in the first half of
the year dropping to 3 percent over the previous period. The restraint in public spending
in the early part of the year and good seasonal rains are factors behind the slowing of
inflation. Higher food prices led by imported wheat and the expected surge in public
spending in the later part of the year are expected to push inflation higher for the rest of
the year. Overall, the inflation rate is projected to moderate from its 2006 highs, reflecting
smaller rises in food prices during the first half of the year. Meanwhile, the rial’s
exchange rate with the U.S. dollar continued to depreciate, but at a much slower rate,
falling by less than 0.4 percent since the beginning of the year.

The authorities have embarked on an extensive set of structural reforms since early
2006, although outcomes have yet to materialize. These reforms covered areas such as
governance, public financial management, civil services administration, and general
investment climate. The formation of the Supreme National Anti-corruption Commission
(SNACC) was finalized when Parliament gave its approval to the selected board
members. The government has officially joined the Extractive Industry Transparency
Initiative (EITI), while steps are continuing to increase the effectiveness of internal and
external auditing. A public procurement law, procurement manual and a restructured
High Tender Board are now in place. A new land registration law was recently passed by
the Cabinet, and the Land Registration Authority is undergoing restructuring. Work has
also proceeded satisfactorily in various areas of public financial management, including
the Automated Financial Management Information System (AFMIS) project, income tax
system modernization, budget classification and reporting and preparation of financial
law. In the area of civil services reform, good progress has been made towards
establishing a biometric identification system (with current rate of completion nearing 80
percent of civil servants) and the Civil Service Fund (CSF).

YEMEN UPDATE. . . . . . . . . . . . . . . . 2

FALL 2007

Donor response to progress on reforms has been positive. Owing to policy reforms in
2006, Yemen was reinstated to the Threshold Program of the Millennium Challenge
Account (MCA) in February 2007. Recently, the MCC announced its overall approval of
Yemen’s reform program, and the subsequent allocation of about $21 million. The first
post-consultative group meeting in June 2007 noted that good progress has been made in
the allocation of pledges, with about $3.1 billion (or 62 percent) already having been
allocated to specific projects.

Yemen continues to face daunting challenges as oil and water resources continue to
deplete and as the population grows at 3 percent annually. At current rates of crude-oil
production and domestic consumption, Yemen could be a net importer by 2015, and will
cease production by 2018. Since exports and public finances rely heavily on oil, the
impending oil depletion and the slow adjustment on the fiscal and production sides will
saddle the government with heavy debts and cause deterioration in external accounts,
accompanied with rising inflation and political instability. Examining the prospects of
future debt sustainability, depletion, and the slow adjustment on the fiscal and production
sides will saddle the government with heavy debts and cause deterioration in external
accounts, accompanied with rising inflation and political instability. To examine the
prospects of future debt sustainability, a recent Debt Sustainability Analysis (DSA) exercise
shows that the probability of debt distress is particularly high if the authorities do not
undertake a major fiscal adjustment effort in light of the dwindling oil reserves. With
unchanged policies, major debt indicators are expected to breach the sustainability thresholds
between the years 2012�18. However, even under the baseline scenario that assumes full
implementation of a comprehensive set of fiscal and structural reforms, Yemen will be at risk
of breaching at least one of the debt thresholds within the next 20 years. To avoid debt
distress, Yemen would need to take strong fiscal and structural reforms, as well as to rely on
highly concessional financing.

According to the recent poverty assessment study conducted by the World Bank, Yemen
has reduced poverty with the percentage of poor falling from 40.1 to 34.8 percent over the
period 1998-2005. It is creditable that this reduction has been achieved in the context of a
high population growth of 3 percent per year. Most of the improvement has occurred in
the urban areas, with poverty rate falling from 32.2 to 20.7 percent. In rural areas, where
73 percent of the total population lives, the decline was much less noticeable as poverty
headcount declined from 42 to 40.1 percent.

However, at the current pace of poverty reduction, Yemen is likely to fall short of meeting
most of its MDG goals by 2015. According to the poverty assessment study, the goal of
reaching the first MDG adopted by the government will require quadrupling of the one
percent per year rate of growth in per-capita consumption achieved over the last seven
years. Overall poverty gap index of 8.9 percent implies a monthly poverty deficit per
capita of about YR497. Therefore, on average a poor person should, receive YR1431 a

YEMEN UPDATE. . . . . . . . . . . . . . . . 3

FALL 2007

month to be lifted out of poverty1 – about a third of the mean consumption of the poor. In
addition, the recent poverty data also cast doubt on the ability to meet the Development
Plan for Policy Reduction (DPPR) target of lowering the country’s poverty rate to 19.8
percent by the end of the decade.

I . R E C E N T P O L I T I C A L D E V E L O P M E N T

The long-running conflict between the Yemeni government and the radical Houthi
group in the Saada governorate, northern Yemen, is moving closer to a peaceful
resolution. The conflict dates to September 2004, and has been mostly localized and low
key, but conflict has escalated in recent months, after the killing of a number of Yemeni
soldiers. Various meditation efforts were attempted in order to bring the two sides to
negotiate. The most recent reconciliation effort, led by Qatar, seems to have succeeded in
maintaining a cease-fire and an agreement to settle the issue peacefully. Already, the
Yemeni government has announced plans and financial aid packages for the
reconstruction of the war damaged areas in the North.

The government is making serious efforts to control the spread of personal arms. In
January 2007, the government issued a decree setting stringent requirements (such as
training and the wearing of special uniforms) for carrying arms by bodyguards who are
escorting senior officials and tribal sheikhs. The decree also set limits on the number of
bodyguards who could be assigned to every official (and paid for by the government).
Later in April, the Cabinet made another decision to close temporarily stores trading in
arms, ammunition, and fireworks throughout Yemen, and required traders to undergo
formal licensing procedures by the Ministry of Interior. In most recent developments, in
August the government issued a decree banning the carrying of personal arms in all
major cities. Under the new rule, which became effective immediately, carrying arms in
public places in the designated cities is regarded as a punishable offense. The rule has
also introduced further restrictions on the bearing of arms for bodyguards and security
forces accompanying officials and tribal sheikhs.

Yemen made improvement in its institutional and political stance over the last four
years, but signs of fragility in some areas continue to be present. Under the
classification shared by the World Bank, the Organization for Economic Co-operation and
Development (OECD) and the United Nations (UN), Yemen has graduated from the list of
Low Income Countries under Stress (LICUS) in 2003. The current list involves around 30
countries, most of which are in Africa. Although Yemen is no longer in the list, it
continues to manifest symptoms of fragility in a number of specific sectors and sub-
regions. Related to the issue of state fragility, the Fund for Peace, and the Foreign Policy
magazine prepare the “the Failed States Index.” Yemen’s ranking on this index in 2007 has
witnessed some improvement over the last year, rising from 16th to 19th position among

1Per-capita poverty deficit is calculated for the population as a whole. While per capita deficit per month is
YR 497, average deficit per poor person is YR 1,431.

YEMEN UPDATE . . . . . . . . . . . . . . . . 4

FALL 2007

146 countries.2 The index ranks countries according to 12 social, economic, political, and
military indicators. Yemeni government officials downplayed the findings of the report,
citing its lack of rigor and its outdated survey results, which do not take into account
many of the achievements made under the National Reform Agenda (NRA) over the last
12 months.

A deadly blast in early July in a popular tourist center in the North left eight Spanish
tourists and two Yemenis dead. The event, which is believed to be Al-Qaida related,
occurred when a suicide bomber attacked a busload of tourists in the Marib area. The
incident has negative implications for Yemen’s image as a country with weak security
preparations and a breeding ground for fundamentalists. It is likely to have a short-term
affect on tourism, particularly from European countries.

Riots erupted in July in some of the major cities in the South, such as Abyan and Aden,
leading to violent clashes and the arrest of some demonstrators. The riots started when
army retirees from the South demonstrated to protest economic hardships resulting from
their early dismissal after the end of the civil war and the subsequent inappropriate
application of the retirement law to their cases. There were also protests over the
perceived delays in the implementation of the salaries and wages strategy. Protests
broadened to touch other issues, such as high inflation, unemployment, and shortages of
power supply.

Following the July riots, the Yemeni president took a number of political decisions
aimed at addressing grievances and calming down emotions. He issued instructions to
bring back army retirees from the South to their workplaces, compensate them for the
elapsed period, and give them the promotions and other benefits for which they were
eligible. He also instructed the government, through the Yemen Economic Corporation
(YER), to directly import and sell wheat and wheat flour. Others measures included
granting a one-month salary to all public-sector employees, to coincide with the month of
Ramadan, and issuing instructions to the Cabinet to devise new plans to create jobs,
increase national power supply, and speedily implement the second phase of the wage
strategy.

In response to recent political unrest in some parts of the country, the government is
placing some restrictions on political freedoms. According to Human Rights Watch,
there are growing signs that human rights and freedom of expression in Yemen are
deteriorating, with incidents of political activists and journalists being harassed and
detained by security forces. In May, the authorities closed the Socialist Party-run Web
site. More recently, the government announced plans to introduce a new law banning
direct criticism of the president, and unauthorized public demonstrations.

Owing to policy reforms in 2006, Yemen was reinstated to the Threshold Program of
the Millennium Challenge Account (MCA) in February 2007. First admitted to the
program in 2004, Yemen was suspended in November 2005 following slippage in its

2Ranking normalized in 2007 to reflect the same number of countries as in 2006.

YEMEN UPDATE. . . . . . . . . . . . . . . . 5

FALL 2007

policy performance against MCA threshold indicators.. 3 In the case of Yemen, the
Millennium Challenge Committee (MCC) listed a number of reasons for the
reinstatement, including the “free and fair elections” in September, as well as a series of
anticorruption reforms, including financial disclosure laws. Having reviewed the reform
program document submitted by the government, the MCC has recently announced its
overall approval and the allocation of about $21 million.

I I . M A C R O E C O N O M I C D E V E L O P M E N T S

World oil markets continued to build
strength during the first half of 2007. Figure 1. Crude Oil Prices
After falling sharply to below $55 per
barrel (Brent- Europe) in January 2007, Brent Spot – Europe: Monthly Prices (US$/bbl)

prices resumed recovery from February 80

2007 onwards, supported by earlier cuts in
75
OPEC production, and continued tensions
in the Gulf. Oil prices for Brent crude 70

averaged $71 and $77 per barrel in June,
65
and July, respectively. Oil prices are
expected to continue to hold firm for the 60
rest of 2007 as growth in global demand
continue at its current moderate pace of 1 55

% per annum, and non-OPEC supply
50
remain tight.4 Jan-06 Jan-07

Supported by buoyant international oil
markets, the price of Yemeni crude exports firmed up during the first half of 2007,
rising by 11 percent since the beginning of the year to reach $71.2 per barrel by June
2007, or $62 per bbl average for the first six months. Despite the firming trend, average
Yemeni crude prices for the first six months remain slightly below the 2006 average of $63 per
bbl5. Meanwhile, in terms of monthly volume, the first half of 2007 witnessed a 9.5 percent
decline in production and about a 12 percent decline in exports. For 2007 as a whole, and
with average prices expected to remain close to their 2006 levels, the value of output and

3The Threshold Program is designed to assist eligible countries (those that have demonstrated significant
commitment to undertake reforms) to speed up their reform process to qualify for full MCA membership,
known as Compact Status. MCA eligibility is based on three broad policy categories–ruling justly,
investing in people, and promoting economic freedom, as measured by 16 performance indicators. Under the
MCC policy, the board of directors may reinstate a suspended country to the program if the country has taken
corrective action or has demonstrated sufficient commitment to correcting each condition for which
assistance eligibility was suspended.
4. Based on actual prices for the first 8 months and the forward prices prevailing at end of August, average
Brent for 2007 is expected to be $65.9 per bbl, about 1 percent above the 2006 level.
5Implicit price based on CBY reported oil exports quantities and revenue.

YEMEN UPDATE . . . . . . . . . . . . . . . . 6

FALL 2007

exports will mirror the physical decline in quantities, which is expected to be between 9 and
12 percent.

Table 1. Average Production and Exports (in thousand bbls per day)

2006 2007 * % change
Crude oil output 357 324 -9.4
of which: State’s share 235 210 -10.4
Exports of crude oil 293 258 -11.9
of which: State’s share 171 145 -15.1
* Projected based on first half year data
Source: Ministry of Oil and the IMF estimates

Economic growth witnessed a slight deceleration in 2006. Real GDP grew at 4 percent,
slipping by less than one percentage point from the previous year. The slowdown largely
reflected the sharp loss in oil output, estimated at more than 8 percent. Growth momentum
in the non-oil sector, however, remained stable at about 5 percent6. Manufacturing-sector
production slowed from 8.1 percent to 5 percent. Meanwhile, fisheries and trade sectors
showed improvement in 2006, with the former expanding by 16.4 percent (compared to 10.1
percent in 2005) and the latter by 8.3 percent (compared to 3.5 percent a year ago). On the
expenditure side, growth was primarily sustained by the expansion in public final
consumption. Investment spending, on the other hand, remained stagnant, with the bulk of
activity taking place in the energy and infrastructure sectors.

Figure 2. Growth in Yemen’s Main Non-Oil Sectors, 2006 (in percent)

Growth rate of main non-oil sectors in 2006

30

20

10

0

-10
e Trade
-20 Fishing Mining on at.

Agricultur Manufact. Financial
Constructi Communic

Avg. 2002-05 2005 2006

6A recent IMF mission revised 2006 growth estimates upwards, from 3.3 to 4 percent for total GDP and
from 5.0 to 5.8 percent for non-oil GDP. The revision seems to reflect the omission by the Central Statistics
Office (CSO) of capital spending on some large projects, in preparing the 2006 preliminary GDP estimates

YEMEN UPDATE . . . . . . . . . . . . . . . . 7

FALL 2007

Figure 3. Real GDP Growth in Yemen, 2002-07 (in percent)

% Real GDP growth 2002-07
8.0
6.0 Projected

4.0
2.0
0.0
-2.0 2002 2003 2004 2005 2006 2007
-4.0
-6.0
-8.0
-10.0

Oil and Gas Non -Oil Aggregate GDP

The 2007 outlook suggests that GDP growth will show a further–albeit small–decline
to 3.8 percent. A stable non-oil GDP growth of about 5.5 percent will partially offset the
contraction in the oil output estimated at about 10 percent. Growth in the non-oil sector
will be sustained by new public investment projects, supported by pledges from
Consultative Group donors, and ongoing projects (including Yemen Liquid Natural Gas
(YLNG), Marib Power, and the first private-sector refinery). Private investment is also
expected to start picking up in response to recent legislative and administrative reforms
aimed at improving the investment climate.

Figure 4. Annual Change in CPI and Main Components

Annual change in CPI and selected components

30.0

25.0

20.0

% 15.0

10.0

5.0

0.0
2001 2002 2003 2004 2005 2006

Transport I. Food and Non-Alcoholic Beverages All-items

Inflation in 2006 surged to 18.4 percent, driven primarily by higher food prices. The
jump in food prices, estimated at 28.6 percent, has largely reflected the 45 percent price
escalation in fruit and vegetable prices. This increase was sustained by domestic supply
factors, the continued increase in international food prices, and higher domestic demand
linked to the award of a pay rise in the public sector in 2006. The effect of the partial
removal of domestic-oil price subsidies in late 2005 has also continued to ripple through
various sectors in the economy in 2006, including agriculture, which is heavily dependant
on diesel fuel for irrigation.

YEMEN UPDATE. . . . . . . . . . . . . . . . 8

FALL 2007

Figure 5. Trends in Crude Oil and Selected Food Commodities

Trends in crude oil and selected food commodities prices
2 0 0 5 – 2 0 0 7
%

170

150

130

110

90
2005M1 2006M1 2007M1

Crudeoil Food Fatsandoils Grains

Source: World Bank data

Box 1. The Impact of Soaring Wheat Prices on the Yemeni Economy

World wheat prices have soared to historic heights in recent months due to poor harvests, and the
outlook for the next six months is grim for consumers. Benchmark U.S. wheat prices7 have risen
by about 40 percent during the year ending August 2007, reaching US$6.84 per bushel in August
2007. The future prices for March 2008 are quoted between US$8.45 and US$8.81 per bushel,
implying market expectations of a further surge in prices of about 23�28 percent in the coming six
months before the new harvest arrives.

The rising prices of wheat, has profound impact on poverty levels in Yemen. A typical Yemeni
family of 8 members consumes about 100 kg of wheat per month. The retail price wheat has
spiked, reaching YR 6,000 for 50 kg bag in Sept 07, and coming on top of a year of record
inflation at 18 percent. Since wheat is the staple food for most Yemenis–the rich and poor–,
and almost all of it is imported, high wheat prices have adverse effects on welfare. Yemen is the
15th-largest importer of wheat in the world, buying about two million metric tones. On average,
before the price surge, a Yemeni family spent 7 percent of its consumption expenditure on wheat
and flour. The poorer families spent more (12 percent) and the food-poor spent as much as 15
percent. A doubling of wheat and product prices would increase poverty by six percentage points,
reversing the gains in poverty reduction achieved between 1998 and 2005.

With high wheat prices feeding political discontent, the government has responded with ad hoc
interventions, which could have adverse long-term consequences. In a reversal of policy, the
government has authorized Yemen Economic Corporation (YEC), a public entity, to import
600,000 tones of wheat and directly market to the public at cost, in direct competition with the
four major private traders. Though this is intended as a temporary move, the private traders may
lose the incentive to invest in marketing and distribution, and the gains may not all go to the poor.
There is no conclusive evidence that the private wheat traders were indulging in collusive behavior
by profiteering on wheat prices. It is welcome that at the same time, the government is taking
steps to increase the contestability of the market by allowing foreign companies to enter wheat
trading. The fiscal cost of the implicit subsidy is estimated to be small. In addition, the
government must examine ways to increase cash-transfers to the poor through the Social Welfare
Fund. The food-poor families spent on average about YR 4,900 on wheat and products, whereas
the ceiling of assistance under cash-transfer was only YR 2,000.

7U.S. wheat, Hard Red Winter No. 1, ordinary protein, export price delivered at the Gulf port for prompt or
30 days shipment

YEMEN UPDATE . . . . . . . . . . . . . . . . 9

FALL 2007

Recent episodes of food price inflation in Yemen are closely associated with the trend
of rising oil prices. Food prices in Yemen have increased rapidly in recent years,
accounting for about two-thirds of total inflation during 2005�06. The link between the
two could be established through a number of local, regional, and international channels.
On the local level, higher oil prices contributed directly to rising domestic demand
through their effects on current public spending. On the regional level, higher oil prices
and booming conditions in the neighboring Gulf countries helped Yemen to attract more
remittances and capital flows, particularly to nontradable sectors, while also increasing
demand for exports of food crops such as fruits and vegetables. On an international level,
rising fuel prices contributed directly to the cost of producing agricultural commodities
worldwide, and indirectly through its effects on freight cost. Additionally, it increased
the demand for bio-fuels derived from the conversion of grains and other agriculture by-
products, thus helping to tighten the supply of grains and edible oil and pushing their
prices further up. In 2006, the increases in food prices in Yemen have come primarily
from food categories that are domestically produced, such as vegetables, fruits, and
meats. In 2007, while good seasonal rains helped to somewhat moderate inflation in local
agricultural produce, prices of imported foods such as cereals and edible oils have shown
a strong increase. Other possible factors that could have helped to push food-price
inflation in Yemen are the shift in the pattern of domestic crop production towards Qat,
and the subsequent shortage of agricultural land and irrigation water.

Despite the surge in June, CPI data for the first six months of 2007 indicate inflation
continuing to stay below last year’s record level of 18.5 percent. Following the big surge
in September and October of 2006, where the all-items price index (raw data) jumped by
nearly 6 percent (about 100 percent on an annualized basis) in each month, inflation has
been gradually easing. In semiannual terms, the inflation rate averaged about 3 percent
for the first half of 2007, compared to about 10 percent in the second half of 2006, and
about 6 percent for the first half of 2006. It is expected that for the rest of 2007, seasonal
factors and rising international food and oil prices will push inflation further up, with the
likely outcome for the whole year reaching about 14 percent.8 The latest surge in inflation
in June–about 2.8 percent over the previous month–is primarily attributed to recent
increases in international food prices, particularly grains and edible oils.

8Another factor that will likely cause the annual inflation rate to exceed the current annualized monthly rates
relates to the survey methodology used to construct the consumer price index (CPI). Surveys of food and
vegetables are taken on weekly and monthly basis, depending on individual items. For other categories in the
CPI, surveys also vary from monthly to annual intervals. Thus, for some items like housing and some
services, which are expected to show increase in 2007, the effect on the CPI will not show until later in the
year.

YEMEN UPDATE . . . . . . . . . . . . . . . . 10

FALL 2007

Figure 6. Changes in Monthly Price Indices, 2006-2007

Changes in monthly price indicies: 2006-2007
Jan-06 Jan-07

12.0 120

10.0 100
8.0 80
6.0 60
4.0
40
2.0
20
0.0

-2.0 0

-4.0 -20

-6.0 -40

-8.0 -60
Annualized All-items I. Food and Non-Alcoholic Beverages All-items

In response to recent surge food prices, the government is expanding the role of the
Yemen Economic Corporation in supplying imported wheat and flour. YEC is the
trading arm of the military establishment, which in the past has been engaged in trading a
wide range of consumer products, including wheat and flour, directly to the military. In
support of these efforts, the government announced the allocation of a $50 million credit
facility for YEC, enabling it to expand its operations and increase its storage capacity in
different parts of the country. Meanwhile, the government maintains that YEC will
continue to sell flour and wheat at cost and without any subsidy. The new measures were
accompanied by increased efforts to persuade local grain merchants to limit their profit
margins under current conditions of rising international grain prices. The Ministry of
Industry and Trade (MOIT) increased its monitoring of international food prices and the
levels of national inventory stockpiles of wheat and other grains. At times, it also warned
traders against price collusion and threatened to take legal action under the competition
law. Over the longer run, the government claims that this action will be superseded with
measures to increase domestic production of grains, encourage more domestic players in
the trading sector, and strengthen the targeting of cash transfers to the poor. On the
supply side, the Cabinet has already amended the Commercial Law (Article 28) to extend
the right of importation of basic food commodities to foreign firms. The government has
also initiated studies on the feasibility and cost-effectiveness of various options to support
local production of wheat in areas with good agricultural potential.

YEMEN UPDATE. . . . . . . . . . . . . . . . 11

FALL 2007

Table 2. Consolidated Budget for 2007

2007* % change over Contribution to
2006 incremental revenue
(Million YR)
and expenditure (%)

Total revenue and grants 1372180 -4.6 100

Total revenue 1352287 -5.9 128

Oil and gas revenue 977752 -9.9 164

Non-oil revenue 374204 7.6 -40

Tax 265404 -0.3 1

Direct 127378 -3.1 6

Indirect 138026 2.5 -5

Nontax 108800 33.4 -41

Grants 19893 1253.3 -28

Total expenditure and net 1596474 13.6 100

lending
I. Current expenditure 1220461 14.6 81

Wages and salaries 463284 20.1 41

Materials and services 152061 17.6 12

Operation and maintenance 21298 7.8 1

Interest obligations 96226 8.2 4

Transfers and subsidies 464213 10.8 24

of which : Subsidies 334568 8.3 13

unclassified current 23379 3.9 0

expenditure
II. Development capital 301387 4.2 6

expenditure
III. Net lending 74626 46.0 12

IV. Loan repayment 22548 12.4 1

Overall balance �Cash -224,294 -793.0 -134

* Based on revised budget estimates and reclassification using GFS2001

After recording a small surplus in 2006, the fiscal balance under the 2007 budget is
expected to revert to a deficit of more than 5 percent of GDP. The widening deficit
underlies the continued loss of oil revenue, and continued –albeit moderating– growth
in expenditure. Current revenue is projected to decline by some 6 percent, primarily
reflecting the cut in oil revenue projections by 10 percent, and to a lesser extent, the
shortfall in taxes due to the adoption of transitional measures related to tax reforms. On
the expenditure side, about 40 percent of projected increase comes from higher wages and
salaries, which reflects the continued implementation of the national wage strategy, and
some increase in hiring–largely related to ongoing efforts to decentralize government
services. Other major sources of increase in current expenditure come from higher
subsidies and transfers, primarily resulting from higher valuation of fuel subsidies.
Capital spending represents the second-largest source of growth in public expenditure,
with an increase of 17 percent to YR1 290 billion. However, budgetary figures on capital
projects could be much higher if the entire government commitments to cofinance pledges
made earlier at the Consultative Group conference in London were included. The overall
deficit in 2007 is expected to reach YR1 224 billion, equivalent to 5.8 percent of GDP, and
slightly above the deficit limit set out under the DPPR.

YEMEN UPDATE . . . . . . . . . . . . . . . . 12

FALL 2007

Table 3. Budget Estimates versus Actual Results for First Half of 2007

Million YR Budget Actual % Change

Grand Total Revenue 676,281 640,399 -5

I) Tax Revenues 132,702 138,403 -24

Income & profit tax 60,304 70,688 17

Goods & Services tax 47,872 44,879 -6

customs 21,142 19,472 -8

Other Tax Rev 3,386 3,364 -27

2) Property Income & Charges 543,276 498,913 -8

oil and gas 499,009 422,706 -8

Crude oil export 221,546 217,574 -2

Domestic oil and gas 277,463 205,132 -26

Other property Income 44,267 76,207 72

3) Grants 138 2,767 1,911

4) Disposal of non financial assets 166 316 91

Grand total of expenses 772,122 667,839 -14

Current Expenditure 609,160 537,212 -76

I) Compensation of Employees 231,642 184,333 -40

Civil Wages & Salaries 217,942 173,276 -20

Others 13,700 11,057 -19

2) Operations and maintenance 86,679 75,871 -12

Goods & services 75,885 66,207 -13

Maintenance 10,648 9,659 -9

Others 146 5 -97

3) Interest Payment 48,113 43,201 -10

4) Subsidies & Transfers 231,036 223,260 -3

Oil subsidy 164,284 168,308 2

Electricity subsidy 3,000 6,000 100

Other social transfers 38,722 29,096 -25

Others 25,030 19,856 -21

5) Non-classified Items 11,690 10,547 -10

Development and Capital Expend. 112,641 111,539 -1

Gain of Fixed Assets 107,734 110,610 3

Gain of Produced Assets 4,907 929 -81

Net Lending & loan repayment 50,321 19,088 -62

*Local Lending & Gain of local Fin. Assets 38,578 10,280 -73

Foreign Lending & Gain of Foreign Assets 469 205 -56

Loan Repayment 11,274 8,620 -24

Disposal of financial assets – 17

Overall -95,841 -27,440 -71

Data released on the first half of 2007 indicate some improvement in the fiscal position.
Compared to budget estimates, actual revenue shows a shortfall of about 5 percent,
matched by savings in expenditure of about 14 percent, therefore causing a reduction in
the overall deficit of about 70 percent. Major sources of the decline in revenue are the
lower income from oil and gas owing to declining production and lower share of
government from exports, and to a lesser extent, the shortfall in tax revenue. On the
expenditure side, savings are primarily related to the delayed implementation of the
second stage of the wage strategy, which is now expected to be gradually implemented
beginning from the fourth quarter of the year. Overall, the fiscal outcome for the year will

YEMEN UPDATE . . . . . . . . . . . . . . . . 13

FALL 2007

be affected by a number of factors that could result in substantial divergence from the
budget. On the up side, oil prices are now likely to continue firming up for the rest of the
year, narrowing the gap between actual and expected income. In addition, the second
half of the year is likely to see stronger tax revenue, due to the settling of disputes related
to the new sales-tax system. Other favorable factors relate to lower expenditure on
defense, as the cease-fire with the rebels in the North continues to hold. On the down
side, rising oil prices will affect expenditure directly through higher fuel subsidies and
could indirectly lead, through their global inflationary impacts, to heightening pressures
on the government to increase public-sector wages and other transfers.

Despite the manageable fiscal position in recent years, fiscal policy continued to be on an
unsustainable track. Strong oil revenues over the past six years helped to maintain the
average fiscal balance with a small surplus. However, the non-oil primary balance, the major
indicator of fiscal sustainability, continued to show deterioration, reaching about 25 percent of
GDP in 2006, up from about 15 percent in 2000. Some progress in this regard is expected in
2008 as reforms in civil service administration, taxation, and other areas of public financial
management are implemented more fully. Yet to achieve sustainability, the government
must address longer-term, structural fiscal-policy measures and adopt explicit policy
objectives and time-bound plans to restore balance between non-oil resources and
domestic expenditure.

Figure 7. Fiscal Sustainability Indicators, 1999�2007 (in percent of GDP)

% 30.0

25.0

20.0

15.0

10.0

5.0

0.0

-5.0 YR99 YR00 YR01 YR02 YR03 YR04 YR05 YR06 YR07
-10.0

Overall deficit/GDP non-oil primary deficit/GDP

The current account balance for 2006 recorded a surplus of about US$200 million,
equivalent to 1 percent of GDP. This represents a sharp downward revision from earlier
official estimates of a surplus of about 10 percent of GDP, which came in light of new data
regarding capital equipment imports related to the Yemen LNG project. The current
account surplus in 2006 was sustained by record oil revenues, which increased by 14
percent to US$6.7 billion despite having an 8 percent fall in production. With the
continuing current account surplus for the eighth consecutive year and large inflows of
direct investment in recent years, the country’s foreign reserves climbed by end of 2006 to
US$7.6 billion equivalent to 11 months of imports.

YEMEN UPDATE . . . . . . . . . . . . . . . . 14

FALL 2007

Figure 8. BOP indicators, 1998�2006

Balance of Payment Indicators 1998-2006
(billion US$)
2000 10000

1500 8000
1000
6000
500 reserves
4000
0

-500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2000 Gross

-1000 0
Gross reserves Trade bal. CAB

The rate of depreciation of the Yemeni rial versus the U.S. dollar has been slowing
down in recent months. In 2006, the rial depreciated by 2.9 percent, below the 3.6 percent
recorded in 2005, and the near 4 percent average rate during the period 2000-2004. The
slowdown in depreciation continued in 2007, with the rial reaching to YR1 199.06 per US
dollar by the end of June, equivalent to 0.36 percent on a year-to-date basis (or to 0.7
percent on an annualized basis). The recent stabilization in the exchange rate versus the
dollar, which was brought about by active intervention of the monetary authorities in the
foreign-exchange market, seems to have been prompted by the desire to lessen the
inflationary impact of the weaker rial–particularly as the dollar continues to wane
against other major currencies.

Figure 9. Average Monthly Exchange Rate

Average Monthly Exchange Rate

YR vs. US$
200

195

190

185

Jan-05 Jan-06 Jan-07

In the monetary sector, broad money growth witnessed noticeable moderation during the
first seven months of 2007.9 After sharply increasing by some 29 percent in 2006, money-
supply growth began to moderate beginning early this year. By the end of July 2007, the
money supply increased by only 5 percent (year to date), or about 9 percent on an
annualized basis. This represents about a 23 percent increase over the last 12 months.10 The
moderation in growth comes on of considerable deceleration in the growth of net foreign

9Analysis is based on comparing recent months’ figures with the stand at the end of 2006.
10The relatively large increase over July 2006 mirrors the sharp increase that occurred in August through
October and in December of 2006.

YEMEN UPDATE . . . . . . . . . . . . . . . . 15

FALL 2007

assets, which have increased by less than 1 percent since the beginning of the year (or 1.1
percent on an annualized bases for 2007 as compared to 38 percent for 2006), owing to the
decline in oil export revenues. Growth in money supply during the first seven months of
2007 was primarily sustained by the expansion in credit to the private sector, which has
grown by about 38 percent on an annualized basis, and to a lesser extent by the claims on
government, which went up by 12 percent on an annualized basis.

Figure 10. Factors Affecting Money Supply

Money Supply and main underlying factoprs
(change in % of broad money at beginning of period)
8

6

4

2

0
J a n – 0 6 J a n – 0 7
-2

-4 Money Supply Net Foreign Assets Claims on non-gov’t. sector Net Claims on Gov’t.

The slowdown in liquidity in 2007 comes on top of increased use of certificates of
deposits (CDs) by the Central Bank of Yemen (CBY). The expansive use of CDs to control
liquidity is relatively new to the CBY, which until recently was relying primarily on
treasury bills. Towards the end of 2006, and under the conditions of positive fiscal balance
in that year, the bank shifted its focus to the use of CDs for controlling liquidity. During the
first half 2007, and as shown in Figure 11, the increasing use of CDs kept its growth
momentum, while new issues of T-bills remained stable for the first few months, then
picked up as deficit-financing needs increased.

Figure 11. Monthly Issues of T-Bills and CDs by the CBY

M.YR Outstanding value of T-bills and CDs issued by CBY -2006-2007

700,000 T-bills CDs

600,000

500,000

400,000

300,000

200,000

100,000

0

Jan-06 Jan-07

Yemen’s total external public debt stood at about US$5 billion (26 percent of GDP) by
year-end 2006, a significant reduction from the US$11.4 billion in 1996. Some 50 percent
of current external debt is owed to multilateral agencies, with the International
Development Association (IDA) accounting for about 38 percent. Major bilateral creditors

YEMEN UPDATE . . . . . . . . . . . . . . . . 16

FALL 2007

include Russia (about 30 percent), followed by Kuwait and Saudi Arabia (6 percent each).
Meanwhile, net domestic government debt stood at 4 percent of GDP at year-end 2006,
resulting in a total net public debt stock of about 30 percent of GDP at the end of 2006.

The outlook for 2007 calls for slight deterioration. In the oil sector, while prices are
expected to remain unchanged from previous years, crude oil output and exports are
likely to continue falling by about 10 percent, following the 8.8 fall in the previous year.
As a result, oil’s contribution to growth, fiscal and current accounts will fall. Therefore,
average growth will slightly decline to 3.8 percent, with the non-oil output remaining
relatively stable, owing to sustained capital spending both from private and public
sources. In the fiscal area, budget estimates already put the deficit at about 5.8 percent of
GDP. Despite the improved outlook for oil and tax revenue, spending is also expected to
exceed budget targets, hence causing the actual fiscal deficit to remain close to budget
projections. Public expenditure is expected to rise due to higher fuel subsidies and possible
increases in wages and transfers in response to rising pressures on the government to relief
hardship. Similarly, the current account balance is expected to turn into deficit (about 4
percent of GDP) for the first time in many years. One positive outlook relates to inflation,
with the trend for the first six months pointing to an average rate for the whole year
below that of 2006.

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FALL 2007

I I I . S T R U C T U R A L R E F O R M S A N D P O L I C I E S

In early 2006, the government introduced a series of economic and political reforms
under the banner of the National Reform Agenda (NRA). The NRA focuses on four key
areas: increasing political participation, improving governance and fighting corruption,
enhancing public administration, and improving the business environment. The program
encompasses concrete measures designed to reform public financial management, civil
services, procurement, public audit, judicial system, debt policy, fiscal policy, and the
business regulatory environment. Since its launch in early 2006, the NRA made
significant progress in implementing its key items, while the few remaining elements are
progressing satisfactorily.

Concerning governance, national reforms are categorized into three major areas:
general corruption, the judicial system, and revenue transparency. While some progress
has been achieved on the judiciary-system front over the last 16 months–particularly
concerning increasing system’s independence –major breakthroughs did not come until
recently, with the ratification of the Anti-corruption and the Extractive Industries
Transparency Initiative (EITI) laws. A third milestone that could also serve the same
purpose, but has been discussed within the context of the public finance reform agenda,
is passage of the Procurement Law by Parliament in late July. With these three important
legislations in place, the ground for improvement in governance is largely paved.
However, final progress in the coming stage will depend on implementation of the laws
and the political will to carry out the reforms.

At the end of June, the Yemeni Parliament, after more than two months of scrutiny, has
approved the selection of the board members for the Supreme National Anti-
Corruption Committee (SNACC) from the list of candidates proposed by the Shura
Council. Under the new anticorruption legislation, the commission is an autonomous
body with an independent budget. The 11-member body will be responsible for
establishing a national anticorruption strategy (which is expected to be finalized during
the first half of 2008), monitoring all government agencies for corruption, and sending
suspected officials to court when necessary. Among the first priorities declared by the
board is establishing the agency’s executive by-laws and strengthening its institutional
framework. The board also declared its intention to conduct a baseline survey on public
perception of corruption in Yemen and to activate the recently approved Financial
Disclosure Law by being first public agency in Yemen to piloting the legislation to its
members.

In August 2007, the government officially announced the joining the EITI. The
announcement was accompanied by the establishment of the Yemeni Council for EITI,
comprising representatives from government, oil and gas companies, and civil society

YEMEN UPDATE. . . . . . . . . . . . . . . . 18

FALL 2007

organizations. The role of the council is to ensure adherence to the principles of EITI11 to
improve transparency and accountability in managing hydrocarbon resources. Given the
significance of hydrocarbon revenue to the budget, the move is a major contribution to
enhanced transparency, better governance and accountability, and improved performance
of public financial management.

Box 2. Yemen’s Progress on Governance–the Kaufman, Kray and Mastruzzi Indicators

The latest governance report published by the World Bank, “Governance Matters 2007,” shows
Yemen scoring a slight improvement from last year. The report, compiled by Kaufman et. al. by
aggregating reviews made by various think tanks and NGOs, presents governance indicators for
212 countries and territories over the period 1996�2006, covering six dimensions of governance:
(1) voice and accountability, (2) political stability, (3) government effectiveness, (4) regulatory
quality, (5) rule of law, and (6) control of corruption. These indicators measure the perceptions
of corruption and not necessarily governance itself. Furthermore, the report, though published
by the Bank, does not represent its official views. Among these six dimensions, Yemen in 2006
scored best in control of corruption and regulatory quality. Compared to other countries, Yemen
has attained 9.6 to 33.0 percentile ranks on the six dimensions, indicating a low rank. However,
Yemen showed some improvement in 2006, particularly in regulatory quality and rule of law,
and to a lesser extent in voice and accountability and government effectiveness. Meanwhile, two
areas–voice and accountability and control of corruption–have witnessed slight deterioration
in 2006.

Efforts to improve public financial management (PFM) continued in the second half of
2007. The PFM Reform Strategy, initiated in 2005, is being implemented through annual
public financial management reform action plans. The agenda includes reforms related to

11The principles and criteria of EITI are described in EITI website:
http://www.eitransparency.org/section/abouteiti/principlescriteria

YEMEN UPDATE . . . . . . . . . . . . . . . . 19

FALL 2007

budget preparation, execution, and implementation, particularly in the areas of budget
classification and reporting, information systems, bidding and procurement, financial
accountability, and budget decentralization. As a part of the 2007 action plan, the
following activities are underway:

� Modernizing the budget classification and reporting system. Efforts are underway to
develop a functional classification of expenditure under the GFS 2001 system and
consolidate the extrabudgetary accounts into the budget.
� Benchmarking the performance of the public financial management system under a
Public Expenditure and Financial Accountability (PEFA) framework. This task is
expected to be completed in the fourth quarter of 2007.
� Embarking on the development of a Medium Term Expenditure Framework (MTEF),
which establishes a three-year rolling budgetary framework closely integrated with
the longer-term development plans.
� Establishing a treasury and debt management functions within the Ministry of
Finance, with technical assistance received from the U.S. Treasury department and,
later, the International Monetary Fund (IMF).
� Strengthening the internal financial controls and internal audits and implementing the
new internal audit manual. In addition, work is underway to finalize the new
Financial Law.
� Building capacity in the Ministries of Finance and Planning to improve
macroeconomic projections and analysis.
� Continuing efforts with budget decentralization. Local councils have recently been
required to collect their own revenue and manage their expenditure.

A revised version of Procurement Law, consistent with international standards, was
passed by Parliament in July 2007. The revision amends some weaknesses in the original
law passed by Parliament earlier in the year. The law, comprising 114 articles in 10
chapters, aims to ensure transparency, equity in government bids, and standardized and
efficient process. It calls for the establishment of an independent agency under the title
High Tender Board (HTB) to monitor government purchasing and bidding operations.
New measures are already underway to finalize the details of organizational structure at
the High Tender Board, and to implement the National Procurement Manual and
Standard Bidding Documents (SBDs) by various government agencies, after their
introduction last April. Other steps taken include training in pilot spending ministries,
and the circulation of instructions by the HTB and Ministry of Finance (MOF) to spending
ministries to request their compliance. Work in progress also includes building capacity
and training in various line ministries to use the new procurement and bidding
documents.

The government is undertaking major revisions of the income tax law. A revised
income tax law, which is currently before the Cabinet for approval, was initiated in
response to problems with the existing legislation in terms of low efficiency of revenue
generation, high rate of evasion, and significant disincentives for investment. The new
law will cover income resulting from commercial, industrial, services, and real estate

YEMEN UPDATE. . . . . . . . . . . . . . . . 20

FALL 2007

activities that would accrue to individuals, corporations, and small businesses. Exempted
categories under the new law will be reduced, which will primarily affect nonprofit and
cooperative organizations, agricultural and farming activities, and technical training
institutes. Exemptions also apply to an individual’s income from dividends, interest
payments, and other financial transactions. In general, the new law is expected to
eventually lower the effective corporate tax rate from 35 percent to 20 percent. Once the
law passed by Parliament, its executive bylaws are expected to be issued in the next few
months. The authorities also announced plans to strengthen the capacity of tax
administration in preparation for the new law’s implementation.

Reforms are progressing at moderate pace in the areas of civil service and public
administration. To deal with the large and inefficient public sector, the government
introduced the National Wage Strategy in 2005, which was to be implemented in two
phases: the first provides basic increase in wages across the board, and the second links
further salary hikes to sector reforms and performance. As supplementary measures, it
also established the Civil Service Fund (CSF) in order to help retrench excess labor in the
public sector, and introduced a biometric identification system with the objective of
eliminating “ghost workers” and “double dippers”. In 2006, the first phase was
implemented, resulting in an across-the-board wage increase and a doubling of minimum
wages. The second phase, which has yet to be implemented, requires a number of prior
reforms that include the completion of the biometric ID system, and reforms at individual
agency levels, such as re-engineering studies and job descriptions. Progress on the
biometric identification system has been satisfactory, with the current reported
completion rate approaching 80 percent of civil service and the judiciary. The wages of
some 60,000 potential double-dippers and ghost-workers (who have not submitted to the
biometric identification) have been frozen and planned to be removed from the system by
November 15, 2007, resulting in potential savings to the government of about US$97
million a year. Other reforms that were concluded recently include the establishment of a
budgetary program for CSF for 2007�2010. Under the CSF, the government has
retrenched and benefited about 4,000 employees. However, efforts to contain the wage
bill and adhere to the implementation plan of the wage strategy’s second phase have seen
some impediments in recent months. As it faced increased pressures during recent riots,
the government has resorted to awarding a one-month salary bonus for the month of
Ramadan, and expressed intentions to expedite the implementation of the second phase,
possibly ahead of the completion of all required prior actions.

As a part of efforts to improve the enabling business environment, a new land
registration law that takes into account the recommendations of the Land Policy Task
Force was approved by the Cabinet in September 2007. The bill is expected to be
referred to the Parliament soon for final approval, which will be followed by the
appointment of an independent registrar, and the establishment of an organizational
structure for the authority that sets up its mandate and functions vis-�-vis other
authorities and agencies. The law takes into account a number of environmental
safeguard measures, including undertaking a clear classification, demarcation, and

YEMEN UPDATE. . . . . . . . . . . . . . . . 21

FALL 2007

registration of environmentally sensitive areas. It also includes measures to mitigate the
impact on vulnerable social groups, such as the poor and women.

Reforms in the in the financial sector are expected to be stepped up. The need for
comprehensive reforms in the sector has been increasingly voiced in recent months,
particularly in the wake of the modest macroeconomic results of 2006, and in the context
of the investors’ conference in April 2007. More recently, and following the July riots, a
presidential directive was issued requesting to declare the issues of financial sector,
monetary policy, and interest rates to be of maximum urgency in government reform
agenda.12 This was followed by CBY announcements that it was initiating a process to
change the banking law in order to ease entry conditions for foreign banks and strengthen
the oversight of Islamic banks. Efforts are also underway to expedite the establishment of
a stock exchange; a specialized committee is preparing a draft law that could lead to the
establishment of a private stock exchange and a securities and exchange commission in
2008. The rush to expedite reforms in the financial sector emanates from the need to
foster growth in the non-oil sector, attract and mobilize foreign and domestic capital,
improve general transparency and corporate governance standards, and increase the
efficiency and size of government tax revenues. 13

Privatization of public enterprise has slowed in recent years. Privatization efforts date
back to early 1995, following the end of the civil war. Right after unification Yemen had
more 200 SOEs, employing over 86,500 employees (more than 25 percent of all civil
servants at the time). These enterprises, which were inefficiently run, imposed a heavy
burden on the budget, as operational losses had to be covered by budget transfers or
accumulation of arrears. Table 7 shows some of the milestones in privatization efforts in
recent history. Since 2000, efforts have been focused on smaller enterprises in various
sectors, with an estimated 35 firms being privatized. The government continues to
maintain ownership of a number of major enterprises in the areas of land transport,
refining, cement, pharmaceuticals, port handling, and financial services, with efforts
focusing so far on market liberalization and rehabilitation and restructuring. The slow
progress was ascribed to the lengthy time and high investments needed for the
rehabilitation of remaining state owned enterprises, and the absence of the equity market.
In recent weeks, the Cabinet has decided to revitalize the process and issued instructions
for an updated report on the situation, to be completed before the year’s end.

12Al-Thawra newspaper, August 22, 2007.
13Currently, the sector is dominated by the CBY and retail banks, which include 15 commercial banks and
two specialized banks. There are also a number of non-bank financial institutions with limited roles, such as
insurance companies, money exchangers, pension funds, the Postal Savings System, and the Social Fund for
Development. Meanwhile, other financial institutions such as stock exchanges, investment companies, and
other types of financial and capital market intermediary firms are absent. The banking system, despite its
relatively large number of institutions, suffers from a number of weaknesses related to asset quality,
capitalization, and operating and staffing efficiencies. Foreign ownership in banks is restricted to 20 percent.
Reflecting this environment, banks in Yemen have a very low penetration ratio and the number of Yemeni
citizens who have access to their services remains very low. Various reform efforts were attempted in the
past, but without tangible results.

YEMEN UPDATE . . . . . . . . . . . . . . . . 22

FALL 2007

Table 4. Main Milestones in Yemen’s Privatization Reforms

Year Measures Taken
1996 Establishing of the Technical Privatization Office (TPO)
1996 Compiling a census in mid-listing 192 enterprises, of which more than 110 were
located in the former socialist South.
1997 Completing the privatization of 60 small enterprises by mid-1997 (16 tourism and 53
other mostly agricultural units privatized primarily through restitution to their
original owners).
1999 -Promulgating the Privatization Law, which organizes and unifies procedures for
privatization across state owned economic units. The law stipulates the establishment
of a High Commission (HC) and a Technical Privatization Office (TPO) to ensure the
implementation of standardized and transparent privatization procedures. It also
calls for the establishment of various committees at ministerial levels to carry out the
privatization of some of the small enterprises in collaboration with the TPO.
-With the help of the World Bank, formulating the privatization strategy and
program. The program includes three components: (1) the privatization of five large
enterprises, (2) the privatization strategy work on three other large enterprises, 14and
(3) financial and legal assistance in the privatization of about 50 of the remaining 70
small- and medium-sized enterprises, including the financial sector.
2000 Restructuring the TPO as secretariat to the HC coordinating the privatization
program, with the latter in charge of approving the privatization program, and
appointing temporary executive board members to the state-owned units approved
for privatization.
2001- Focusing government privatization efforts on smaller enterprises in various sectors
present with an estimated 35 firms privatized, while efforts regarding major enterprises focus
on market liberalization, rehabilitation, and restructuring.

14Port of Nashtoun, Public Telecommunications Company, and Yemenia Airlines

YEMEN UPDATE . . . . . . . . . . . . . . . . 23

FALL 2007

IV. O U T L O O K

The government is continuing the reform process that was restarted in July 2005. The
implementation of the National Reform Agenda has been progressing satisfactorily, with the
bulk of the agenda items completed or adequately on track. The government is currently
drafting its second program of reforms, with key focuses on the areas of political and
economic liberalization and improving the investment climate. Currently, donors are actively
supporting the government reform program. For instance, the bank is supporting the
government with an Institutional Reform Development Policy Credit (IRDPC) –a quick
disbursing operation–and the U.S. doing the same, with Yemen’s access to the Millennium
Challenge Account.

Yemen faces daunting challenges as oil, water resources continue to deplete, and the
population grow briskly at 3 percent annually. At current rates of crude oil production and
domestic consumption, Yemen could be a net importer by 2015, and will cease production by
2018. As exports and public finances rely heavily on oil, the impending oil depletion and the
slow adjustment on the fiscal and production sides will saddle the government with heavy
debts and cause deterioration in external accounts accompanied by rising inflation and
political instability. To examine the prospects of future debt sustainability, a recent Debt
Sustainability Analysis (DSA) exercise carried jointly by the World Bank/IMF, shows that the
probability of debt distress is particularly high if the authorities do not undertake major fiscal
adjustment efforts in light of the dwindling oil reserves. With unchanged policies, particularly
with regard to improving growth in the non-oil sector, higher tax revenue and reductions in
current expenditure, major debt indicators (ratios of NPV of debt to GDP and to exports, and
of debt service to exports) are expected to breach the sustainability thresholds between 2012
and 2018. However, even under the baseline scenario that assumes full implementation of a
comprehensive set of fiscal and structural reforms, Yemen will be at risk of breaching at least
one of the debt thresholds (NPV of external debt-to-exports ratio) within the next 20 years.
This situation would be amplified in the standard DSA stress tests, especially if financing
would only be available on moderately concessional terms. In other words, if Yemen is to
avoid debt distress, this will require strong fiscal and structural reforms, as well as highly
concessional financing.

At the current pace of poverty reduction, Yemen is likely fall short of meeting most of
its MDG goals by 2015. The goal of reaching the first MDG adopted by the government
will require quadrupling of the 1 percent per year rate of growth in per-capita consumption
achieved over the last seven years. According to the recent poverty assessment study, the
overall poverty gap index of 8.9 percent implies a monthly poverty deficit per capita of about
YR1 497. On average, a poor person should receive YR1 1,431 a month to be lifted out of

YEMEN UPDATE. . . . . . . . . . . . . . . . 24

FALL 2007

poverty15–about a third of the mean consumption of the poor. Perfect targeting of the poor
would have required only about YR1 124.4 billion per year (about 4 percent of GDP) to fill the
gap between the actual spending of poor households and the poverty line in order to lift
everyone out of poverty. The severity of the poverty index (which attaches greater weight to
the poverty gaps of poorer families) at 3.3 percent is relatively high by the standard of Middle
East and North Africa countries. The food poverty gap averages about YR1 2,100 for the
food-poor, some 75 percent of the average consumption of the food-poor. To see this gap in
perspective, the cash-transfer program currently has a maximum transfer of YR1 2,000 per
family, not per person. The recent poverty data also cast doubt on the ability to meet the
DPPR target of lowering the country’s poverty rate to 19.8 percent by the end of the decade.
.

15Per-capita poverty deficit is calculated for the population as a whole. While per capita deficit per month is
YR1 497, average deficit per poor person is YR1 1,431.

YEMEN UPDATE . . . . . . . . . . . . . . . . 25

FALL 2007

V. E C O N O M I C A N D S E C T O R D I A L O U G E

I. Private Sector Development
Business Start-Up Simplification, Yemen. The IFC PEP-MENA’s Business Start-Up
Simplification Project in Yemen seeks to help the Government at the national and sub-
national level to establish simplified business start-up procedures to minimize
bureaucratic obstacles for private investors. The aim will be a comprehensive
restructuring of the relevant business start-up procedures, resulting in reduced cost and
time of business registration for start-ups, thus encouraging more local and foreign
investment. This project is working in Sana’a to ensure that all simplifications are in line
with national policy and applicable across the country as well as, at the sub-national level
in Aden where it will serve as the pilot case where these simplifications would be
implemented first as part of the Administrative Modernization and Simplification project
financed by the World Bank’s PCDP. IFC PEP-MENA is working closely with the
Ministry of Planning and International Cooperation, the Ministry of Industry and Trade,
the GIA, the Free Zone Authority and the Governorate of Aden to improve and
streamline business start-up procedures in Yemen. The project consists of four phases, the
mapping and Survey phase with the help of private sector, Re-engineering phase, the
Implementation phase, and then The Automation phase in Aden. So far, the business
start-up simplification project team (along with a consulting team) has concluded the first
phase of the project (The Mapping phase) in both Sana’a and Aden. The project team is
currently planning to conduct many workgroup discussions and workshops to
demonstrate and draft a reform agenda based on the results of the mapping phase in both
Sana’a and Aden.

Mining Policy Reform Project in Yemen. In September 2006, IFC, PEP-MENA signed an
agreement jointly with the Ministry of Oil and Minerals, represented by the Geological
Survey and Mineral Resources, to support the government further in its efforts to develop
the country’s mining industry through targeted support in the area of policy reform. The
Project is divided into three key phases: Diagnostic Assessment, Change / Re-designing,
and Implementation. The project has progressed well as the first phase has been
completed successfully. In order to present the findings and recommendations of the
assessment of Phase I to high level decision makers as well as to a broader audience,
workshops and a series of high-level client and stakeholders meetings were held in early
September 2007. The objective of these events is to finalize with stakeholders the reform
agenda of the mining legal policy and fiscal regime and create momentum for the planned
reforms. It will also help develop a national policy and reengineer administrative
procedures. With these events it is intended to transit into Phase II of the project. The
advisory project will partner with international experts with the government to reform
the mining codes according to international best practices. The government is sustaining

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FALL 2007

the project, as it will help in reforming a new mining policy, which will facilitate in
attracting the private sector including major mining companies to invest in Yemen’s
mineral resources as well as diverse Yemen’s economy currently dependent on Oil & Gas.

Yemen Leasing Project: The Parliament of Yemen and the President of the Republic
enacted the Law # 11 on April 27, 2007. The law was sponsored by the Central Bank of
Yemen; it was drafted in coordination with the International Finance Corporation,
member of the World Bank Group. The Law is based on international best practices
including the Model Law on Leasing developed by the International Institute for the
Unification of Private Law (UNIDROIT). (UNIDROIT is an independent inter-
governmental organization based in Rome. Its purpose is to study needs and methods for
modernizing, harmonizing and coordinating private and in particular commercial law as
between States and groups of States). Importantly, the Law was specifically developed to
incorporate the legal principles and traditions existing in Yemen.
The IFC is now assisting in the development of associated tax legislation, as well as the
establishment of a leased asset registry and related secondary legislation.

The Leasing Program works in Yemen with both governmental agencies and the private
sector, IFC:

� Advises policy makers seeking to create legal and regulatory environments favorable
to the development of leasing. This involves comprehensive diagnostics to identify
legislative and other constraints, drafting legislation and raising awareness of legal
and regulatory best practice.

� Builds capacity of local financial institutions (e.g., banks, leasing companies, MFIs,
etc.), equipment suppliers, investors, etc. to create and expand leasing markets on a
sustainable and profitable basis.

� Raises awareness of the benefits of leasing to MSMEs as a means to finance business
assets; and,

� Promotes and facilitates leasing investments, both for its own account and for other
investors.

Small & Medium Enterprise management Training program (Business Edge): In order to
address the gap in the supply of management training in Yemen, IFC’s management
training program, Business Edge contributed to catalyzing structural change in the
Yemeni market for management training. With its comprehensive training package, the
program has built the capacity of 6 training providers and trained 70 of their trainers,
helping them to generate demand, and to make a profitable line of business out of SME-
management training. Whereas the notion of SMEs paying for training did not exist,
owners/managers of SMEs are now willing to invest in management training as is evident
from the high numbers of trainees that enroll in Business Edge workshops. In the span of
a year, 2616 owners/managers of SMEs have been trained and certified by Business Edge.
Significant repeat rates are also an indication of the popularity of the workshops. To help
stimulate the market, a declining subsidy scheme was set up in cooperation with the

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FALL 2007

Royal Netherlands Embassy and the Social Fund for Development in January 2006.
Encouragingly, demand has increased despite the gradual reduction in subsidy levels. In
fact, the number of trainees reached 1030 owners/managers in April with the subsidy at
only 50%, in comparison to the 159 owners/managers who enrolled in February at subsidy
rates as high as 80%. Currently Business Edge is provided without any subsidies since
April of 2007.

II. Education and Health and Social Policy
Girls Secondary Education Project A joint World Bank, Netherlands, DFID, KfW and
GTZ mission was undertaken in Yemen in July 2007 to review preparation of the project
and to agree on detailed project components. The mission highlighted that, in close to
forty years of World Bank/IDA support to the education sector in Yemen, this is the first
time that a fully owned project preparation process has taken place by the GoY through
the MOE from the early stages of project design The appraisal mission is planned from
late October 2007.

Conditional Cash Transfer for Girls in Grades 4-9 Under the Conditional Cash Transfer
(CCT) scheme of the Basic Education Development Project (BEDP), the first cash transfer
was made to girls in 8 operational pilot schools in Lahej Governorate. Preliminary
findings of the operational pilot have shown parents’ strong preference of CCT to any
other schemes since they feel this is the first time that their needs are addressed most
adequately by a government scheme. After this successful completion of the operational
pilot, the MOE launched the CCT in 210 schools in Lahej in September 2007.

Basic Education Development Project, Mid-Term Review Supervision mission in July has
found that considerable progress has been made in the implementation of the BEDP
during this year which has helped to overcome the shortfalls that resulted from delays in
implementation during the first two years of the Project. Mid-Term Review mission is
planned in January 2008.

School Health and Nutrition Mission A School Health and Nutrition (SHN) mission
visited Yemen in early September to organize a workshop jointly with the Ministry of
Education, the Ministry of Health and World Health Organization. Recognizing that
effective SHN programs require strong and effective collaboration, both the ministries of
Education and Health agreed to establish an Inter-sectoral Steering Committee and an
Inter-sectoral Technical Committee. The MOE is considering using the third phase of the
EFA-FTI Catalytic Fund grant to support these activities in 2007-2008.

Immunization Resource Tracking: The Bank is leading a dialogue with the MOPHP on the
impact of financial resources planning, budgeting, and the flows of funds on program
outcomes. In partnership with the USAID-financed Health Systems project (managed by
Abt Associates, Inc), the Bank carried out in 2006 preliminary analysis on immunization
resource tracking. As a follow up from the recommendations of the preliminary analysis,

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FALL 2007

the MOPHP with Bank support is preparing for the implementation of an in-depth
resource tracking study of the National Immunization Program.

Health Sector review (HSR) The World Bank is involved in extensive discussions with
MOPHP and its development partners (donors) on the health sector review/donor
harmonization initiative. The development partners, including the Bank are supporting
the initiative that was launched in 2006. The HRS is expected to be finalized mid 2008
with a Health Sector Reform Strategy, which will set sector policies and strategic
priorities, as well as provide the framework for aid harmonization in the sector..

Rapid Result Approach (RRA): Given the success of the Rapid Result Approach
methodology in supporting project implementation of the HRSP, GOY requested Bank
support to institutionalize the use of RRA and scale up its use. The Bank is discussing
with the Ministries of Health and Planning the scope and potential of this process. A
national team is in place and the dialogue on applying the RRA for the Health Sector
Reform Strategy is in progress.

National Population Conference: The Bank is working closely with UNFPA, the National
Population Council and the Ministry of Planning and International Cooperation on the
preparation of the upcoming National Population Conference, planned for early
December 2007. The Bank is contributing technical assistance. Extensive discussions are
underway for how to ensure that this Conference, the fifth of its kind, will ensure
sufficient high-level support to have measurable impact on the ground.

III. Agriculture and Rural Development
Rain-fed Agriculture and Livestock Project. The main objective of this project, signed in
July 6, 2006, is to support the Ministry of Agriculture and Irrigation to improve the
services to farmers in five governorates. The project will also provide support to the
General Directorate for Animal Resources’ to fulfill its core functions and to improve
livestock owners’ access to quality services and goods to enhance the health and
productivity of their animals.

IV. Public Administration
Establishment of the Internal Audit Function in Yemen, A dialogue with COCA,CSMP
and the MOF regarding the establishment of the Internal Audit Function in Yemen and
also the re-engineering of COCA to be in line with the international standards, is being
carried out.

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FALL 2007

VII. New & Noteworthy Laws, Decrees and Agreements

The Cabinet
� approved formation of the Ministerial Committee for identifying practical steps for
implementation of the second phase of National Salary and Wages Strategy;
� approved draft partnership agreement between the Ministry of Oil and Minerals and
three foreign companies regarding oil exploration at blocks 34 an 37;
� approved financial statement of the Civil Aviation and Meteorology authority as of
December 31, 2002 submitted by the Ministries of Transportation and Finance, COCA
and the Authority;
� approved the mechanism suggested by the Ministerial Committee regarding taxes
received on goods income and instructed the Minister of Finance to ensure necessary
procedures including setting up specialized department at the Tax Authority;
� in the light of the Presidential directives, approved administrative and institutional
reform matrix proposed by the Ministry of Civil Service and Insurance;
� approved restructuring of the Ministry of Civil Service and Insurance in the light of
the study in the framework of the Civil Service Modernization Project;
� approved draft proposals by the Ministry of Civil Service aimed at resolving the
situation related to retiree issues;
� referred to the Ministerial Committee draft Republican Decree presented by the
Ministry of Transport regarding establishment of Land Transportation General
Authority;
� Discussed aspects of technical cooperation were between the Central Bank of Yemen
and IMF concerning preparing fiscal, monetary, and economic data.
� approved allowing foreign companies and commercial enterprise to import and
market basic commodities;
� approved final accounts of the General State Budget 2006 and budgets of independent
units;
� discussed the report by the Minister of Fisheries and approved supporting the
following activities of the Ministry: traditional fishing, exports, quality monitoring
and fishery information net;
� approved increasing the capital of the Yemeni Company for Oil and Minerals
Investment from self-financing to YR 15 bln.
� approved draft law presented by the Ministry of Finance regarding supplementary
allocation to General State Budget 2007 in the amount of YR 268 bln and referring it to
the Parliament for finalizing constitutional procedures;
� approved the report by the Ministry of Local Administration regarding
developmental needs of Al-Dhala’a governorate including agriculture, infrastructure
and human development areas and instructed relevant ministries to take necessary
actions

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FALL 2007

� approved distribution of central support in the amount of YR 22.8 bln to the local
authority administrative units;
� approved a draft Land Registration Law and referred it to the Ministry of Legal
Affairs and General Land, Survey and Urban Planning Authority for finalizing
necessary procedures to transfer the Law to the Parliament;
� agreed to implement a one-room system at the Ministry of Finance for processing
customs clearances, exemptions and visas for donor agencies in Yemen;
� discussed a report by the Minister of Planning and International Cooperation
regarding results of negotiations with IFAD over a US$ 16.6 million loan for rainfed
agriculture project;

Other Government
� Yemen and Saudi Arabia are working on establishment of a joint economic zone at a
cost of USD 500 million for exporting Yemeni agricultural products and livestock.
� The government has announced establishment of Yemeni Council for Extractive
Industry Transparency Initiative.
� 29 local and international companies took part in international bidding for the second
phase on Marib Gas Power Plant.
� General Investment Authority has registered a YR 3.6 billion project for construction
of a soft drink factory in Lahej owned by the Aden Soft Drinks Co. Ltd (98%) and
Shahir for Trade and Sana’a Soft Drinks Company (2%).
� Board of Directors of the Social Fund for Development approved 2008 budget
amounting to YR 22.4 bln with an increase of 7.1% compared to 2007.
� An agreement was signed between Yemen and Syrian Establishment for Cereals to
import 50,000 tons of wheat.
� A workshop on “Decent Workplace and Social Justice” for handicapped was organized
by the Ministry of Social Affairs and Labor on September 21-22.

The Private Sector
� A Chinese company has initiated construction of Batis Cement Factory in Abyan at a
cost of US$ 240 million.
� An agreement was signed between Yemen and US Power Corporation to prepare a
feasibility study with regards to construction of a nuclear power-generation plant in
Yemen.
� International Finance Corporation and Yemen have launched a project for
improvement of set up procedures for service and development projects especially in
the field of mining which aims at attracting foreign investments.
� Ten local and international companies are competing for a US$ 28-million tender for
Batis road construction in Abyan governorate funded by the Qatar government.
� A workshop on Environment Protection was organized by the Environment
Protection Authority during September 16-20.

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FALL 2007

Development Cooperation
� The World Bank aid allocations have increased to US$ 194 million for FY 2008
signifying an increase by US$ 59 million compared to last year.
� European Union has granted 2 million to support de-mining activities under
National Mine Action Program.
� A grant agreement was signed between Yemen and USAID for the amount of US$
648,000 to support agricultural sector productivity in Yemen.
� Islamic Relief Organization has granted foodstuff for the poor at the total cost of YR
5.3 million.
� A grant agreement was signed between Yemen and the US Embassy for the amount of
US$ 515,214 for electricity access improvement in rural areas.
� Millennium Challenge Corporation has approved US$ 20 million grant for fighting
corruption and improving rule of law in Yemen.
� World Health Organization has allocated US$ 24 million for support during the
coming two years.
� The Kingdom of Denmark has announced financial support to Yemen in the amount
of US$ 6.2 million for the coming two years to support decentralization, human rights,
journalists syndicate and good governance.
� A credit agreement was signed between Yemen and OPEC Fund for International
Development for the amount of US$ 11 million towards public works project.
� A financing agreement was signed between Yemen and the Embassy of Japan for US$
7.5 million for building basic education schools in the framework of Realizing MDG
scheme.
� A financial agreement was signed between Yemen and the Embassy of Japan for the
amount of US$ 250 thousand for support of rainfed agriculture.
� The Government of Japan has granted US$ 120 thousand to support two community
development projects in the field of basic education and health services.
� The Kingdom of Saudi Arabia has donated vehicles and chemical materials for anti-
locust operations at the amount of US$ 1.75 million.

Seminars and workshops
� A seminar on “Democracy in the Arab World” was organized by the Cultural Bridges
Forum in cooperation with Jordanian Centre for Human Rights and Arab Women
Union during August 22-23.
� A workshop on “Problems of People with Hearing Disabilities” was organized by
Eman Center in cooperation with the Japanese Embassy during August 26-27.
� A training workshop on “Peer Education in Life Skills for HIV/AIDS Prevention” was
organized by International Development Foundation in cooperation with UNICEF
during August 12-21.
� A seminar on “Liberalizing Media in Yemen” was organized by the Women’s Forum
for Research and Training on August 26.

YEMEN UPDATE. . . . . . . . . . . . . . . . 32

FALL 2007

� A workshop on “Integrated Framework: What Is It and How Yemen Can Benefit from
It” was organized by the Ministry of Industry and Trade in cooperation with the
Dutch Embassy on August 28.
� Launch of the World Good Governance Indicators was organized by the World Bank
on August 29.
� A training course on Locust Combating was organized by the National Locust Control
Center in cooperation with FAO during September 6-8.
� The Second Democracy Forum was organized by the Sisters’ Arab Forum during
September 8-9.
� A Gender Auditing Workshop was organized by the National Women’s Committee in
cooperation with UNFPA during September 8-9.

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FALL 2007

V I I I . W O R L D B A N K G R O U P O P E R A T I O N S I N Y E M E N

Knowledge Services. Bank’s key non-lending support included of the following studies:
public expenditure management, civil service modernization, country financial
accountability assessment, petroleum price policy reform, household energy supply and
use, development of national gender strategy, environmental safeguard requirements,
and strategic plans for long-term development of coastal aquifers. Coordination among
donors has become more regular and, with the establishment of subgroups dealing with
key sectors and activities such public financial management, water and education. A
number of partnership agreements are already in place, including, education, health, PFM
and aid harmonization. Collaboration with, and support for, civil society organizations
has also deepened, both directly (e.g., NGO capacity building grants) and indirectly (e.g.,
through projects using NGOs for implementation).

Lending Services: As of end of September, 2007, there were 19 projects under
implementation, and three projects in the pipeline with total commitments of US$ 814.25
million of which US$395.1 million disbursed. About 20% of the portfolio, by value, was
dedicated to the water sector, 20% to education, almost 21% to health and other social
sectors, 15% urban development, 14% to agricultural/rural sector, 6% transportation, and
4% to public sector governance. Overall portfolio performance and management remain
satisfactory. To improve further the implementation of Bank-supported project, a Country
Portfolio Performance Review (CPPR) follow-up committee was established consisting of
senior government officials from the Ministry of Planning and the Ministry of Finance as
well as officials from the Bank. The committee meets regularly.

YEMEN UPDATE. . . . . . . . . . . . . . . . 34

FALL 2007

Ongoing World Bank Operations in Yemen

(As of September 30, 2007)

Cumulative Disbursement information

Project Name Close Date Loan $ Disb. $ Disb. % SOE Disb. $ SOE Smple $ % Revd

Groundwater & Soil Conservation 31-Oct-09 41.2 20.20 49% 4.71 0.25 5%
Rural Water Supply and Sanitation 31-Dec-07 23.9 22.70 95% 16.86 0.92 5%
Irrigation Improvement 30-Jun-07 24.6 20.20 82% 3.69 0.13 3%
Sana’a Basin Water Management 30-Jun-09 26.8 11.30 42% 3.12 0.21 7%
*Fisheries Res. Mngmnt & Conserv. 30-Sep-11 26.3 3.00 11% 0.03 0.00 0%
Urban Water Supply and Sanitation 31-Dec-07 158.5 77.60 49% 31.51 1.29 4%
Port Cities Development 30-Jun-07 26.9 15.50 58% 2.65 0.42 16%
Taiz Muni. Dev. and Flood Protection 31-Oct-07 54.1 51.50 95% 22.74 0.69 3%
Third Public Works 30-Jun-09 47.6 35.80 75% NA 0.00 0%
II Rural Access Project 30-Nov-10 40.5 9.20 23% 0.00 0.00 NA
Rainfed Agriculture and Livestock project 30-Jun-12 21.3 2.00 9% 0.00 NA NA
Power Sector Project 31-Dec-11 53.2 3.00 6% 0.00 NA NA

Civil Services Modernization 31-Dec-07 34.1 23.80 70% 3.94 0.52 13%

Health Reform Support 31-Dec-08 33.8 20.10 60% 7.16 0.00 0%
Higher Education 30-Jun-08 6.2 4.30 69% 0.45 0.04 10%
Third Social Fund for Dev. 31-Dec-08 63.4 59.80 94% NA 0.00 0%
Social Fund for Dev. III (supplemental) 1-Jan-09 15.0 2.00 13% 0.00 0.00 0%
Vocational Training II 31-May-13 15.0 2.00 13% 0.00 0.00 0%
Basic Education Dev. 30-Jun-10 67.4 11.10 16% 3.42 0.00 0%
779.77 395.10 51% 100.28 4.48 4%

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