Yemen's security void leaves resources untouched

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Amat al-Alim Alsoswa, the director of the Executive Bureau for the Acceleration of Aid Absorption and Implementation of the Mutual Accountability Framework, talks about the reforms Yemen needs to overcome political and economic instability.

The lack of political and security stability in Yemen hampers development work, Amat al-Alim Alsoswa, executive director of the Executive Bureau for the Acceleration of Aid Absorption and Implementation of the Mutual Accountability Framework (SEBAA), said in an interview with Al-Hayat.

She also noted that in light of its current capacities and conditions and the significant challenges it's facing, the government will be unable to achieve the desired development needed to reduce unemployment and poverty and to address the challenges related to chronic malnutrition and food security.

“Development requires first and foremost an acceptable level of necessary political and security stability that creates a stable economic and investment-related environment contributing to the mobilization of efforts of the government’s partners from the private sector, civil society and donors, as well as the government development efforts to reach acceptable development outcomes felt by the citizen and reflected in the improved standard of living,” she said. “The citizen is also responsible for supporting the government's efforts in terms of security and stability; his role is no less important than that of the other partners.”

Regarding her assessment of the level of implementation of the mutual accountability framework between Yemen and donors, and the criticism to both the government and the donors, Alsoswa said, “The overall situation in Yemen led to the slow implementation of a common framework for mutual accountability. The security constraints and the high level of fiscal deficit, which resulted in a significant shortage of oil derivatives and an increasing power outage during the second quarter of the year, are factors that delayed this implementation.”

She added, “A slow progress has been registered during the second quarter of the year in terms of the policies and reforms contained in the mutual accountability and aid absorption framework. However, the significant slowdown, especially the withdrawal of pledges due to challenges such as the fragile security situation, led to the reduction of the number of employees in many foreign diplomatic missions and development organizations, while some of them even closed their doors more than once in recent months.”

Alsoswa continued, “We have seen three main developments during the second quarter of the year, the first is the new structure of the Friends of Yemen Group, the second is the board of directors’ meeting of SEBAA in May 2014, and the third is the second follow-up meeting between the government and donors on June 23, 2014.”

Economic and administrative reforms

Alsoswa noted that the political and security situations in Yemen and the difficult fragile economic situation make it necessary to adopt financial, economic and administrative reforms. In this context, President Abed Rabbo Mansour Hadi ordered the government to implement a number of procedures for addressing the financial difficulties that affect the security and stability of the country, as part of the financial and administrative reform plan.

In response to a question about the economic reform priorities that fall within the main scope of work of SEBAA and about the government being committed to the implementation [of the framework] in the coming period, Alsoswa said, “The efforts of SEBAA were concentrated on supporting the government to implement the short list of reforms, out of 13 main reform actions, agreed upon under a common mutual accountability framework. These reforms include the implementation of the fingerprint system in the civil service, the army and security forces, the elimination of double functions and ghost employees, and the reform of the energy sector.” She added, "We are all aware that Yemen is in urgent need to implement financial reforms after the economic downturn, whose consequences are so dire to the extent that the government may not be able to pay employees’ salaries."

The International Monetary Fund (IMF) program is one of the priority reforms mentioned in the mutual accountability framework by virtue of which the Yemeni government is committed to the implementation of a series of procedures agreed upon. The priorities also include the fiscal policies aimed at reducing budget expenditures and increasing revenues and the execution of some price-related reforms.

Regarding the improvement of the living standard of Yemenis in light of an economic crisis, especially concerning the lack of oil derivatives, power outages for long hours, deterioration of services and the decline of living conditions, Alsoswa called for “the serious implementation of the phased program for stability and development, which represents the government short-term development plan for the period of 2012-2014.”

In terms of the difficulties faced by the absorption of donor aid amounting to around $8 billion, she said, “SEBAA developed ​​recommendations and remedies to accelerate the absorption of aid, including the reallocation of stalled projects funds, the creation of strategic projects, the adoption of programs including short-term projects, the development of a database and information and institutional system to determine priorities and select externally funded projects, the provision of assistance for setting a binding timetable for the government and donors including the stages of project preparation and financial flows needed to implement them.”

Moreover, SEBAA recommended supporting an appropriate institutional and administrative system for foreign aid, addressing the challenges related to technical studies of the designs, and helping solve problems related to increased government’s contribution in foreign projects by convincing donors to bear them.

Diversification of income sources

Alsoswa indicated that an action plan is being prepared for the second half of the year to support the implementation of 21 selected projects, mostly through allocations which have yet to be approved. She also stressed that SEBAA will provide support to speed up the approval, will help adopt a fast track and develop a unified guide of steps and procedures.

The total allocation for these [21] projects is of $2.04 billion accounting for about 26% of total donor aid. These allocations are concentrated on the infrastructure sector, in addition to 10 projects in the fields of electricity and education, and the rest in the sectors of public works, water, transportation, health, agriculture and others.

Regarding the sectors to be focused on in the future to diversify the sources of national income and revenues in light of declining oil production and foreign reserves of foreign exchange, as well as losses caused by acts of sabotage of oil and gas pipelines, Alsoswa believes that it is possible in the short-term to focus on increasing tax and customs public resources by completing the system, regulations and decisions related to these resources, including a law on fighting tax and customs evasion and the abolition of tax exemptions.

Alsoswa said it's possible to focus in the medium-term and long-term on expanding the research and exploration of oil and gas and restructuring the economic units of production and services in a form guaranteeing the qualification of these units to compete and achieve economic savings to support the general budget. “The resources of Yemen are abundant and unexploited and unfortunately, during the past years the country relied on the discovered and scarce oil and gas resources rather than encouraging the exploitation of renewable resources available in the sectors of agriculture and tourism,” she said.

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Found in: yemeni economy, yemen security, international monetary fund, economic development yemen, development, abed rabbo mansour hadi
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