Yemen
MED is currently planning a major project in Yemen, the Sana'a Gate. More information on this prestigious project to follow soon.


ECONOMY
Substantial Yemeni communities exist in many countries of the world, including Yemen's immediate neighbours on the Arabian Peninsula, Indonesia, India, East Africa, and also the United Kingdom, and the United States. Beginning in the mid-1950s, the Soviet Union and China provided large-scale assistance.

In the south, pre-independence economic activity was overwhelmingly concentrated in the port city of Aden. The seaborne transit trade, which the port relied upon, collapsed with the closure of the Suez Canal and Britain's withdrawal from Aden in 1967.

Yemen, the fastest growing democracy in the Middle East, is attempting to climb into the middle human development region through ongoing political and economic reform.

Since the conclusion of the war, the government entered into agreement with the International Monetary Fund (IMF) to implement a structural adjustment program. Phase one of the IMF program included major financial and monetary reforms, including floating the currency, reducing the budget deficit, and cutting subsidies. Phase two will address structural issues such as civil service reform.

In early 1995, the government of Yemen launched an economic, financial and administrative reform program (EFARP) with the support of the World Bank and the IMF, as well international donors. The First Five-Year Plan (FFYP) for the years 1996 to 2000 was introduced in 1996. The World Bank has focused on public sector management, including civil service reform, budget reform and privatization. In addition, attracting diversified private investment, water management and poverty-oriented social sector improvements has been made a priority for the implementation of the programs in Yemen. These programs had a positive impact on Yemen’s economy and led to the reduction of the budget deficit to less than 3% of GDP during the period 1995-99 and the correction of macro-financial imbalances.

In 1997, IMF and the government began medium-term economic reform programs under the Enhanced Structural Adjustment Facility (ESAF) and Extended Fund Facility (EFF). This reform program was aimed at reducing dependence on the oil sector and establishing a market environment for real non-oil GDP growth and investment in the non-oil sector. Increasing the growth rate in the non-oil sector was one of the most important problems to be tackled by the government. These programs included reducing unemployment, strengthening the social safety net and increasing financial stability. To achieve these reforms, the government and IMF implemented containment of government wages, improvements in revenue collection with the introduction of reforms in tax administration, and a sharp reduction in subsidies bills by increasing prices on subsidized goods. As a result, the fiscal cash deficit was reduced from 16 percent of GDP to 0.9 percent from 1994 to 1997. This was supported by aid from oil export countries despite the wide-ranging fluctuations in world oil prices. The real growth rate in the non-oil sector rose by 5.6 percent during 1995-97.

The World Bank is active in Yemen, with twenty-two active projects in 2004, including projects to improve governance in the public sector, water, and education. In 1996 and 1997, Yemen has lowered its debt burden through Paris Club agreements and restructuring U.S. foreign debt. In 2003, government reserves reached $5 billion.

SOURCE: WIKIPEDIA