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CONSULTATIVE GROUP MEETING FOR THE REPUBLIC OF YEMEN
LONDON. NOVEMBER 15.16. 2006
CO-CHAIRPERSON’S REPORT OF PROCEEDINGS
Table of Contents
EXECUTIVE SUMMARY ................................................................................................. 5
INTRODUCTION ............................................................................................................... 7
OPENING STATEMENTS ................................................................................................. 8
Co-Chair’s Opening Statement ........................................................................................ 8
UK Government’s Welcome Statement .......................................................................... 8 Remarks by the President o f the GCC Ministerial Council ............................................. 9
Remarks by the Secretary General o f the GCC ............................................................... 9 Statement by H.E. the President o f the Republic o f Yemen .......................................... 10
Statement by Saudi Arabia’s Minister o f Finance ......................................................... 10
Statement by Qatar’s First Deputy Prime Minister and Foreign Affairs Minister ........ 10
Statement by United Arab Emirates’ Minister o f Finance ............................................ 11
Statement by Oman’s Minister o f Foreign Affairs ........................................................ 11
STATEMENTS BY THE YEMENI GOVERNMENT AND MULTILATERAL ORGANIZATIONS ........................................................................................................... 11
Statement by the Minister o f Planning & International Cooperation on Economic Reforms ......................................................................................................................... 11
Statement by the Arab fund for Economic & Social Development .............................. 12
Statement by the International Monetary Fund ............................................................. 12
Statement by the Is lamic Development Bank ................................................................ 13
Statement by the United Nations Development Programme ......................................... 13
Statement by the World Bank ........................................................................................ 14
PARALLEL WORKING SESSIONS ............................................................................... 15
Session 1: Development Plan for Poverty Reduction and Achieving the MDGs ......... 15
Session 2: National Agenda for Reform: Achievements and the Road Ahead ............. 15
Session 3: Donor Harmonization and Project Implementation ..................................... 16
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Session 4: Yemen’s Partnership with the GCC ............................................................. 16
PRIORITY INVESTMENT PROGRAM ......................................................................... 17
Statement by the Government on Yemen public investment priorities and financing needs .............................................................................................................................. 17
Comments by the World Bank on the Public Investment Program ............................... 18 Donors Responses to the Yemen’s External Financing Needs ...................................... 19
CONCLUDING REMARKS ............................................................................................ 23
Closing Statement by the World Bank .......................................................................... 23 Closing Statement by the Gulf Cooperation Council .................................................... 24
ANNEXES ......................................................................................................................... 27
List o f Participants ......................................................................................................... 29
Opening Statements ....................................................................................................... 45
Co-Chair’s Opening Statement .................................................................................. 47
UK Government’s Welcome Statement .................................................................... 49
Remarks by the President o f the GCC Ministerial Council ....................................... 52 Remarks by the Secretary General o f the GCC ......................................................... 54
Statement by H.E. the President o f the Republic o f Yemen ...................................... 57
Statement by the Kingdom o f Saudi Arabia .............................................................. 60
Statement by Qatar .................................................................................................... 62
Statement by the United Arab Emirates .................................................................... 63
Statement by Oman ................................................................................................... 64 Statements by the Yemeni Government and Multilateral Organizations ...................... 65
Statement by the Minister o f Planning & International Cooperation on Economic Reforms ..................................................................................................................... 67
Statement by the Arab fimd for Economic & Social Development .......................... 71
Statement by the Islamic Development Bank ............................................................ 73 Statement by the United Nations Development Programme ..................................... 76
Reports ofthe Working Sessions ................................................................................... 85
Statement by the World Bank .................................................................................... 81
Session 1: Development Plan for Poverty Reduction and Achieving the MDGs ..... 87
Session 2: National Agenda for Reform: Achievement and the Road Ahead ........... 89 Session 3: Donor Harmonization and Project Implementation ................................. 90
Session 4: Yemen’s Partnership with the GCC Countries ........................................ 92
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Statements o n Priority Investment Program .................................................................. 93
needs .......................................................................................................................... 95
Comments by the World Bank on the Public Investment Program ........................... 99
Written Pledging Statements ....................................................................................... 103
Islamic Development Bank ..................................................................................... 105
European Commission ............................................................................................. 109
Republic of Korea .................................................................................................... 114
Germany .................................................................................................................. 115
OPEC Fund for International Development ............................................................ 118
United States o f America ......................................................................................... 121 Arab Monetary Fund ............................................................................................... 124
Japan ........................................................................................................................ 126 Concluding Remarks ................................................................................................... 129
World Bank’s Closing Statement ............................................................................ 131
Gulf Council’s Concluding Statement ..................................................................... 133
Press Release ............................................................................................................... 137
Statement by the Government on Yemen public investment priorities and financing
The European Union Presidency ............................................................................. 106 . .
United Kingdom ...................................................................................................... 111
L i s t of Documents posted on the Government website: www.yemencg.com ............. 139
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The Consultative Group Meeting for the Republic of Yemen London, November 15-16,2006
Co-Chairperson’s Report o f Proceedings
EXECUTIVE SUMMARY
The Consultative Group (CG) for the Republic o f Yemen took place on November 15-16, 2006 in London, U.K. It was hosted by the UK Department o f International Development, and sponsored by the Gulf Cooperation, and co-chaired by the Government o f Yemen and the World Bank. I t was attended by senior officials from 39 countries and international development agencies.
The meeting focused on three main topics: (i) the economic and social progress achieved by Yemen in recent years; (ii) the challenges facing the country over the medium-term; and (iii) the financial needs to support the implementation o f the Third Five-Year Socio- Economic Development Plan for Poverty Reduction and i t s Public Investment Program.
During the meeting, the Government delegation briefed participants on the political, social and economic developments that had taken place in Yemen since 1990’s, emphasizing the Government’s commitment to improve Yemen’s investment climate and strengthen democratic institutions. The Government delegation stressed the need for international support, to deal with the key challenges that the county faces. In this regard, a new National Development Plan, supported by a public investment program for 2007- 2010, was presented, with a financing need o f about US$6.8 billion, o f which US$5.5 bi l l ion i s needed for disbursement for the period 2007-201 0.
Participants noted progress the Government has made, particularly in implementing the national reform agenda focusing on governance, including adoption o f anti-corruption measures, financial disclosure for public officials, procurement transparency and greater independence for the judiciary and the supreme audit institution. Moreover, participants were encouraged by the Government commitment to continuing addressing governance issues, including joining the Extractive Industries Transparency Initiative and implementing anti-corruption measures. They also recognized that more international support i s needed, and welcomed the commitment by the Government and i t s development partners to working together to further strengthen governance.
Government’s efforts on the political, economic and social fronts were also commended. Participants noted that while the near-term outlook remains manageable, the expected rapid decline in o i l production raises serious concerns about long-term sustainability. They encouraged the Government to urgently promote non-oil activities, with emphasis on pro-poor growth. With regards to the financing need, Yemen’s development partners reaffirmed their support for the country’s efforts to reduce poverty through macroeconomic stability and structural reforms. Approximately US$4.7 bi l l ion were
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pledged fo r t he four year per iod 2007-201 0. The pledge represents over 85 percent o f the Government’s estimated external f inancing needs.
The meeting agreed to convene another CG meeting in about two years. In the meantime, to keep up the momentum, meetings between the Government and donors would take place every s i x to twelve months to rev iew the progress made in implement ing commitments made by both parties at this CG meeting.
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INTRODUCTION
1. London on November 15-16,2006.The meeting was hosted by the UK Department o f International Development (DFID), sponsored by the Gulf Cooperation Council (GCC) secretariat, and jointly co-chaired by Ms. Daniela Gressani, Vice President o f the Middle East and North Africa Region, the World Bank, and the H.E. Abdulkarim A1 Arhabi, Yemeni Minister o f Planning and International Cooperation. The latter led the Yemeni delegation, which included ministers from following sectors: c iv i l service, finance, foreign affairs, justice, and trade. Representatives from Yemen’s c iv i l society organizations and the national women committee also attended the meeting. The opening ceremony was also attended by H.E. Ali Abdullah Saleh, President o f the Republic o f Yemen and his delegation.
The Consultative Group (CG) for the Republic o f Yemen met in Lancaster House,
2. Participants came also from following countries and organizations: Abu Dhabi Fund for Development, Arab Fund for Economic and Social Development, Arab Monetary Fund, Austria, the Kingdom o f Bahrain, Canada, Care International, China, Denmark, Egypt, European Commission, Finland, France, Germany, Gulf Cooperation Council, International Finance Corporation, International Fund for Agricultural Development, International Monetary Fund, Islamic Development Bank, Italy, Japan, Republic o f Korea, Kuwait, Kuwait Fund for Arab Economic Development, Malaysia, Netherlands, Oman, OPEC Fund for International Development, Qatar, Oxfam, Saudi Arabia, the Saudi Fund for Development, Spain, Turkey, United Arab Emirates, United Kingdom, United Nations Development Programme, the United States o f America and World Bank.
3. achieved by Yemen in recent years; (ii) the challenges facing the country over the medium-term; and (iii) the financial needs to support the implementation o f the Third Five-Year Socio-Economic Development Plan for Poverty Reduction and i t s Public Investment Program. In addition to plenary meetings where communications on the above topics were made, four parallel working sessions were held on following topics: (i) development plan for poverty reduction and achieving the MDGs, (ii) national agenda for reforms, (iii) donor harmonization and project implementation, and (iv) Yemen’s partnership with the GCC countries. A pledging session was also held before the end o f the Conference.
The meeting focused on three main topics: (i) the economic and social progress
4. following which were posted at the Government website prior to the meeting:
Several documents were availed before and during the meeting, including the
- - - - Aid Policy Paper -
The third Socio-Economic Development Plan for Poverty Reduction 2006-201 0 Public Investment Program (PIP) 2007-201 0 The National Reform Agenda: A Progress Report
Aid Absorption Capacity Study and Project Implementation Mechanisms
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OPENING STATEMENTS
Co-Chair’s Opening Statement
5. In her opening statement, M s . Daniela Gressani, Co-Chairperson, welcomed the President o f Yemen and all delegations to the Consultative Group Meeting. She thanked the UK Government for hosting the meeting and the GCC for i t s sponsorship, and commended the excellent attendance by different organizations. She recalled that Yemen was the first country she visited when she was appointed Vice President in September 2006, and highlighted how she was impressed by the country’s determination to implement key structural reforms to accelerate economic growth and social progress, despite important challenges the country faces: high rate o f poverty, high population growth, declining o i l revenues, poor infrastructure, etc. She stressed that Yemen needs significant support to overcome those challenges, and cited three critical enabling factors in place -a concrete action plan for the short and medium term, programs o f ongoing and technical support provided by traditional donors, and the potential that can be unleashed from partnership with neighboring countries and regional organizations such as the GCC.
6. The Chairperson then announced the program for the two days and reiterated her hope for a successful meeting, where the technical discussion would enrich the common understanding o f Yemen’s development challenges, and al l development partners would pledge their support to priorities identified in the Government ‘s development plan and support the Public Investment Program.
UK Government’s Welcome Statement
7. Parliamentary Under-Secretary o f State in the Department for International Development (DFID), opened his statement by welcoming al l delegations to Lancaster House. H e then congratulated H.E. President Saleh o f Yemen for his recent election victory and h i s leadership. H e stated that the meeting was an opportunity for hearing the scale o f challenges the country i s facing in unemployment, population growth, water shortages and uncertain future o i l revenues, the Government plans to address these challenges, and for a strong partnership between Yemen and i t s partners to address those challenges. H e welcomed in particular the GCC States among the donors, and thanked H.E. the Secretary General for his leadership to make the meeting a success.
On behalf o f the UK Government, the Host, Mr. Gareth Thomas, MP,
8. o f i t s national reform agenda, and reiterated that OECD donors and GCC countries are keen to see progress on the governance reforms and fight against corruption, which should lead, along with plans for poverty reduction and investment, to better access to job, education, health and justice. H e advocated also for increased opportunities for women to receive education, healthcare and employment, and to participate in political l i fe .
Mr. Thomas stressed that Yemen has made progress towards the implementation
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9. Mr. Thomas reiterated the readiness o f the UK Government to continue supporting the Government of Yemen, and announced that the UK i s planning to significantly enhance its program assistance to Yemen from E12 mi l l ion in 2007 to E50 mill ion a year by 2010, i.e. an overall indicative program o f E1 17 mi l l ion or $225 mi l l ion during the lifespan o f the Public Investment Program. To signal UK’s willingness to remain engaged in Yemen in the long term and improve the predictability o f aid flows, he also announced that UK will enter into discussions on a ten-year partnership program with the Government o f Yemen. H e commended some members o f Yemeni Cabinet who have worked closely with the UK team and have demonstrated a strong commitment to poverty reduction, and concluded by expressing his hope that the meeting will be the turning point in the country’s development.
Remarks by the President of the GCC Minister ia l Counci l
10. Foreign Affairs o f the United Arab Emirates, in his capacity o f President o f the GCC ministerial Council, expressed thanks to the UK Government for hosting the Consultative Group Meeting, to the World Bank for organizing and chairing the meeting, and all bilateral representatives and institutions attending the meeting. H e commended the Government o f Yemen for social reforms undertaken in the country, and stressed the importance o f the CG for the development o f Yemen. H e concluded by assuring that the GCC will provide i t s support to Yemen.
In his brief remark, H.R.H. Shaikh Abdulla bin Zayed AI-Nahyan, Minister o f
Remarks by the Secretary Genera l o f the GCC
11. General, recalled historical, kinship and cultural ties between Yemen and GCC countries. H e informed participants that, in 2001, GCC countries invited Yemen to j o in GCC specialized agencies and transform traditional ties into economic cooperation. A joint technical committee was set up to identify Yemen’s development needs for financing by the GCC specialized agencies. H e commended Yemen for i t s national reform agenda to achieve i t s development goals in education, health, gender, and governance.
In his statement, H. E. Abdulrahman bin Hamad A1 Attiyah, the GCC Secretary
12. to finance the country’s public investment program, but also for long t e r m partnership with the Government. H e expressed his hope that international support to Government will help attract private investment in Yemen. In th is regard, he informed participants that the GCC and the Government o f Yemen are planning an Investment Conference in Yemen in early 2007.
H e stressed the importance o f the C G not only for the pledges which will be made
13. H e concluded by thanking the C G organizers and all institutions participating in the meeting, and expressed the hope that partnership will continue after the conference.
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Statement by H.E. the President o f the Republic o f Yemen
14. the GCC Secretariat and the World Bank for the preparation o f the conference. H e also thanked a l l participants for their interest in Yemen’s development, and expressed h i s hope that the conference will have expected positive outcomes.
In h i s statement, H.E. President Ali Abdullah Saleh thanked the UK Government,
15. especially in the area o f justice and governance. H e cited successful results in women participation to political l i f e as electors and elected candidates, and reiterated Government’s commitment to democracy, press freedom and human rights. After successful presidential elections in September 2006, h e informed that elections are planned at Governorates and local levels very soon, and legislative elections will follow later.
He informed participants o f recent reforms undertaken by the Government,
16. and the fight against corruption, and disclosed that his country plans to jo in the Extractive Industries Transparency Initiative (EITI) soon.
H e also cited reforms envisaged in the areas o f public finance and procurement,
17. investments in the country in sectors such as o i l and gas, and stresses that these investments are necessary for employment creation and fight against poverty, to avoid the risk o f Yemen becoming a heaven for people promoting terrorist activities.
H e stated that reforms ongoing and programmed will lead to attracting
18. will be made will be disbursed at a significant rate, and assured that the Government has mechanisms enabling to spend the money the way it i s intended. H e concluded by thanking the UK Government for the financial support already announced by MP Gareth Thomas.
H e expressed h is wish for a successful conference and hoped that pledges that
Statement by Saudi Arabia’s Minister o f Finance
19. thanked the UK Government and the World Bank for the Conference preparation, and announced that his country will provide an amount o f US$1 bi l l ion to support programs in social sectors and regional development for the current PIP.
H.E. Dr. Ibrahim Abdulaziz A1 Assaf, Minister o f Finance o f Saudi Arabia,
Statement by Qatar’s First Deputy Prime Minister and Foreign Affairs Minister
20. H.E. Sheikh Hamad bin Jassim bin Jabr A1 Thani, First Deputy Prime Minister and Foreign Affairs Minister o f Qatar, announced that h is country will provide a support o f US$500 mi l l ion to Yemen, in grants and loans, and said that that support will surely have a positive impact not only for Yemen, but also for the entire region.
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Statement by United Arab Emirates’ Minister o f Finance
21. the United Arab Emirates (UAE), thanked the UK and regional and international organizations for the preparation o f the Conference, and announced that the UAE decided to donate US$500 mi l l ion to the Government o f Yemen for development projects.
In his statement, H.E. Hamad Essa AI Zaabi, Minister o f Finance and Industry o f
Statement by Oman’s Minister o f Foreign Affairs
22. In his statement, H.E. Yousef bin Alawi bin Abdullah, Minister o f Foreign Affairs o f the Sultanate o f Oman, thanked the UK Government and the World Bank for the preparation o f the Conference, and announced that H.E. Sultan Qaboos decided to donate US$lOO mi l l ion to help Yemen achieve i t s economic progress.
23. financial pledges.
President Saleh of Yemen thanked al l the countries for their respective
STATEMENTS BY THE YEMENI GOVERNMENT AND MULTILATERAL ORGANIZATIONS
Statement by the Minister o f Planning & International Cooperation on Economic Reforms
24. International Cooperation, emphasizes that the country faces many challenges: a l o w GNP per capita o f US$600 in 2005, with 36% o f the population living below the poverty line, high rates o f illiteracy and drop-out in education, low access to health services, gender and regional disparities, inequalities in access to land, too much dependency on o i l sector, high unemployment rate, etc. Despite the somber picture, he stressed that a lot o f progress has been made in recent years. GDP growth has been positive, manufacturing industry rose by about 5% a year, and improvements were noted in roads, transportation, water, sanitation, health and education services.
In h is statement, H.E. Abdulkarim Ismail Al-Arhabi, Minister o f Planning and
25. Minister AI-Arhabi highlighted that Yemen has been receiving a l o w level o f aid per capita (US$13), representing only 2.2% o f GDP, while the aid average for all LDCs has been around US$33 per capita. H e said that the C G was an opportunity to start a new era o f partnership for development, supported by a renewed commitment for reforms. H e enumerated reforms initiated since 1990’s under the structural adjustment program framework, and announced reforms the Government intends to implement during the Plan period, especially in the areas o f (i) administration and governance, including accountability, transparency and combating corruption; and (ii) private sector development, including export promotion and improving business environment to reduce transaction costs and attract private investment in agriculture, tourism, fisheries, gas and manufacturing.
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26. H e said that the new National Development Plan, supported by a comprehensive and detailed PIP, gives priority to human resource development, rural development and infrastructure. H e also announced that the PIP needs US$7.8 bi l l ion o f external financing, o f which US$1 bil l ion has already been programmed by donors. This leaves a funding gap o f US$6.8 billion, o f which US$5.5 bil l ion is needed for disbursement for the period 2007-2010.
Statement by the Arab fund for Economic & Social Development
27. In his statement, H.E. Abdulatif Yousef A1 Hamad, Director General o f the Arab Fund for Economic and Social Development, stressed that financial support to the PIP i s necessary, but not sufficient to achieve the National Plan objectives. H e stressed that reforms in various sectors need to be implemented, and highlighted the importance o f human resources development and training for the personnel, as well as improvement o f aid coordination mechanisms.
28. H e announced that the Arab Development Fund for Economic and Social Development will continue supporting Yemen in human resources development in both the pubic and the private sectors, and in infrastructure, where the private sector participation will be encouraged. In this regard, he announced a pledge o f US$700 mi l l ion for 2007-201 0.
Statement by the International Monetary Fund
29. Yemen’s economic achievements and stressed the challenges the country is l ikely to face in the medium term. H e stated that recent developments are broadly favorable: economic growth rate i s high (4% in 2005 and 2006), the overall fiscal deficit i s modest (3% o f GDP), the external current account is in surplus, and gross official reserves represent more than one year o f imports, as a result o f high world o i l prices.
In his statement, Mr. Saade Chami, IMF Mission Chief for Yemen, summarized
30. were noted in reduction in prices control and inefficient subsidies, exchange rate management, liberalization o f trade, and reduction in external debt. H e lauded the general sales tax law recently passed by the parliament as one o f the best in the region, with very few exemptions. H e also commended the Government for efforts made in c iv i l service reform, and governance, and emphasized the new procurement law and the anti- corruption law which will soon be discussed in parliament.
In structural reforms, he indicated that some o f the most important achievements
3 1. production and prices, for a country with limited resources, high level o f poverty and unemployment, high population growth rates and the substantial development needs necessary to improve living conditions o f the population. H e suggested that an ambitious reform to maintain a sustainable macroeconomic position in the face o f reduction o f o i l resources, and generate sufficient non-oil growth, i s needed and has to be accompanied by highly concessional external financing, and preferably grants.
Among the challenges ahead, Mr. Chami emphasized the expected decline in o i l
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32. Key adjustments suggested include rationalization o f Government expenditures, increase in the tax effort, and structural reforms to facilitate the adjustment to lower o i l revenues, as wel l as to enhance the effectiveness o f public finance management and improve the business environment so as to boost prospects for economic growth. To that effect, he suggested the following measures: eliminating fue l subsidies, containing the civil servants wage bill, rationalizing/eliminating exemptions in income tax and customs laws, and promoting the development o f promising sectors such as liquefied natural gas (LNG), fisheries, tourism, and transshipments. Moreover he emphasized that reforms to address governance and regulatory barriers, strengthen property rights and contract enforcement, as well as to promote a better regional integration are necessary to attract investment needed in the non-oil sector.
33. crucial reforms, and advocated for increased international community support for Yemen.
Mr. Chami stressed that Yemen has already demonstrated that it can undertake
Statement by the Islamic Development Bank
34. all the organizers o f the Conference. H e then indicated that the delivery o f basic social services such as education, health, water and sanitation, remains a big challenge in Yemen. H e also emphasized concerns in human development, employment and infrastructure. H e commended the Government’s decision to implement economic reforms and to integrate the poverty alleviation strategy into i t s third development plan, and indicated that IDB encourages Yemen’s integration in the GCC, as this will offer an important potential for enhancing the economic growth.
Dr. Amadou Boubacar CissC, Vice President for Operations, started by thanking
35. H e highlighted the l o w level o f aid Yemen i s receiving, and encouraged the international community to raise it so that the country can make progress toward achieving the MDGs. H e indicated that IDB has so far financed 100 operations in Yemen, totaling US$630 mi l l ion in various sectors, and that the current IDB’s portfolio comprises 16 projects in education, transport, energy and agriculture. H e reiterated IDB’s commitment to support social and economic development o f Yemen. H e indicated that IDB’s assistance to Yemen, in the range o f US$200 mi l l ion for 2007-2010, will focus on human development, capacity building, fighting unemployment, diversifying the economy and developing infrastructure. H e indicated that IDB will look for opportunities for funding the private sector in productive and commercial sectors, through the Islamic Corporation for the Development o f the Private Sector (ICD), one o f i t s windows.
Statement by the United Nations Development Programme
36. the UNDP Regional Bureau for Arab States, stated that development obstacles that Yemen faces include gender disparities, scarcity o f water resources, high population increase and unemployment, and weak mechanisms to ensure transparency and participation, and called all development partners to help Yemen overcome these
Ms. Amat Al-Alim Al-Soswa, Assistant Administrator and Regional Director for
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obstacles. She indicated that the UN system will focus i ts assistance on population issues, women participation, youth and children, as well as on improving access to basic social services and economic governance. She stressed that the PIP needs to be refined, notably by adding more interventions in the areas o f population, governance and food security.
37. She recalled concerns about Yemen’s ability to absorb high level o f aid, and recommended to apply the flexible and pragmatic approach o f aid delivery suggested in the UNDP-commissioned study, with a long t e r m objective o f channeling assistance through the national budget, in l ine with the Paris declaration on Aid Effectiveness. She concluded by stressing that the UN can assist Yemen in building up the capacity o f handling increased flows o f aid in a transparent and accountable manner.
Statement by the World B a n k
38. recalled important development successes since Yemen unification in 1990, notably a significant economic growth which followed important reforms in the areas o f inflation control, trade liberalization, subsidies reduction, exchange rate management and financial sector. H e stressed that Yemen achieved this performance under adverse conditions caused by the return o f hundreds o f thousands o f workers from the Gulf, a costly civi l war and swings in o i l prices. H e also emphasized that Yemen has improved i t s human development index significantly, and highlighted the improvement o f social protection mechanisms in the country.
Mr. Emmanuel Mbi, the Country Director for Yemen, Egypt and Djibouti,
39. o f hiatus in progress and in reforms between 2000 and 2005, period that coincided with the second five-year development plan and the f i rs t PRSP. Important lessons learned from t h i s period were incorporated into the design o f the 2006-2010 Third Socio- Economic Development Plan for Poverty Reduction (which i s also the second PRSP) as well as in the Bank 2006-2009 CAS.
However, he noted that the achievements o f the 1990s were followed by a period
40. diversifying the economy from a declining o i l sector, (ii) improving governance, (iii) water scarcity, and (iv) population pressure. H e then hghlighted actions that the Government has taken to address them, including key economic and governance reforms, civi l service reform, and fiscal management. He stressed that the Government has defined and began implementing the National Reform Agenda covering four major reform areas o f anti-corruption, ru le o f law, improving the investment climate and enhancing political participation. H e emphasized progress accomplished in public procurement legislation, and in increasing judicial independence and the functioning o f the judiciary.
Mr. Mbi cited four challenges that Yemen faces for i t s development, namely (i)
41. lending advisory services and expressed his optimism that the current IDA allocation o f around US$lOO mil l ion per annum would increase. He concluded by commending the Government for the recent progress and encouraging in successfully implementing the
Mr. Mbi also emphasized World Bank support to Yemen in lending and non-
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National Reform Agenda and the Third Plan, and promised World Bank commitment to support the country.
PARALLEL WORKING SESSIONS
Session 1: Development Plan for Poverty Reduction and Achieving the MDGs
42. Reduction presented by the Yemeni Government. Participants commended the Government for the quality o f the document in te rms o f diagnosis o f issues and clarity o f indicators; they also noted efforts made with the preparation o f the Yemen’s Strategic Vision 2025 and the Report on the Millennium Development Goals.
The session analyzed the Third Socio-Economic Development Plan for Poverty
43. stimulate economic growth, create job opportunities and alleviate poverty, with focus on women and vulnerable groups o f the society. They pointed out the main challenges presented in the Plan, namely housing issues, water resources scarcity, unemployment coupled with high poverty level, and weak investment climate, and stressed the importance o f the support from the development partners to complement Government’s efforts to overcome these challenges.
Participants noted that the mid-term objectives o f the Development Plan are to
44. Participants discussions brought additional important issues/recommendations that can help succeed in achieving the MDGs. In th is regard, they stressed the importance o f (i) strengthening Yemeni cooperation with the GCC countries, (ii) focusing on rural development and the creation o f job opportunities, especially for women, (iii) tackling food security issues, and (iv) strengthening fiscal and monetary policies, as well as the overall economic framework. Finally, they emphasized the need for continued economic reforms, while raising the issue o f difficulties o f dealing with energy issues.
Session 2: National Agenda for Reform: Achievements and the Road Ahead
45. January 2006 composed o f four major components: enhancing transparency and fighting corruption, judicial reform, press freedom and expanding population participation.
The session explored the different dimensions o f the reform agenda launched in
46. Participants noted the success achieved so far in laying down the foundation for more transparent decision making, in terms o f both approved and pending legislative changes in the areas o f judiciary, procurement, anti-corruption, financial disclosure and press law. They also expressed the need for continuation o f the reform process and i t s deepening, building on the good practices established in the initial phase, notably an open process o f dialogue with Yemen’s development partners and involvement o f c iv i l society in the monitoring o f reform measures.
47. The translation o f intentions into actions beyond legislation would require concerted donor support and capacity building so that new procedures are applied
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effectively. In this regard, work already started on public finance management reform needs to be deepened.
48. an increase in donor engagement, and highlighted that the focus put on the reform in President Saleh’s speech i s seen as a sign o f commitment at the highest level to maintaining the pace o f reform.
Participants emphasized that progress on the reform agenda i s expected to lead to
Session 3: Donor Harmonization and Project Implementation
49. Participants looked into the areas o f aid harmonization and alignment agenda, aid mechanisms and aid absorption. Regarding aid harmonization and alignment, participants noted the Government’s strong commitment to implementing the Paris Declaration on Aid Effectiveness, as illustrated in the f i rs t version o f the Aid Policy Paper and Yemen’s active involvement in the “fragile states initiative”.
50. modalities in Yemen. They noted that almost all donors channel their aid through individual projects, and that some are looking for direct budget support. They recommended that all donors try to move up the ladder o f aid modality, using more sectoral approaches where feasible. Participants agreed that sectoral plans are vital, and stressed that basic education in particular as a sub-sector can be a very good example o f sectoral approach success, extendable to the whole education sector.
On aid mechanisms, participants stressed the need for strengthening existing aid
5 1. Participants recognized the necessity o f having an accurate baseline o f good quality database on aid flows and development indicators to manage policy decisions. They also stressed the need for donors to avoid high transactions costs for themselves and for the Government, especially given limited human and financial resources o f the latter. In this regard, it was recommended that donors with smaller amounts channel them through NGOs.
52. Participants recommended also strengthening coordination and avoiding duplication. The Government was advised to help by taking the lead in improving the environment for donors to operate, providing database o f local contractors and consultants, and providing a standard procurement and bidding documents.
53. On aid absorption, i t was recommended that the Government and i t s development partners work together to expedite required actions to ease disbursements, and avoid l ow disbursement rates.
Session 4: Yemen’s Partnership with the GCC
54. Participants noted that significant levels o f annual per capita income growth i s required to achieve Yemen’s vision o f reaching middle income country status by 2025, and that economic benefits from the partnership with the GCC could contribute to this growth.
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55. Yemen and GCC countries could lead to Yemen economic growth: increased trade in goods, and increased use o f Yemeni labor either through GCC industries moving to Yemen or increased labor flows from Yemen. In this regard, participants highlighted the role o f an improved investment and business climate in Yemen, as expressed in the Third Socio-Economic Development Plan and the National Reform Agenda.
The discussion was focused on two areas where an enhanced partnership between
PRIORITY INVESTMENT PROGRAM
Statement by the Government on Yemen public investment priorities and financing needs
56. H.E. Abdulkarim Ismail Al-Arhabi, Minister o f Planning and International Cooperation, stated that the newly completed 5-Year Development Plan for Poverty Reduction targets a GDP growth o f 7.1 % per year, a reduction o f unemployment to 12% and a reduction o f poverty rate to 20% by 201 0. H e emphasized that the Plan accords priority to developing human resources, improving the investment climate, investing in promising sectors, private sector development, better infrastructure and basic social services, and bolstering the social safety net and protection.
57. o f implementing agencies, economic efficiency measures, job creation potential and improvements to basic services and infrastructure. H e indicated that the overall cost o f projects included in the 2007-2010 PIP i s roughly US$13 billion, o f which 40% will be funded by the Government, and stressed that the plan needs US$7.8 billion. Given that US$ l bi l l ion has already been programmed by donors, Minister Al-Arhabi emphasized that the financing gap i s US$6.8 billion, o f which US$5.5 bi l l ion i s needed for the period 2007-2010, and US$1.3 bi l l ion for the period beyond 2010 in order to complete projects launched during the Plan period.
H e highlighted that the PIP comprises priority projects, selected based on capacity
58. Min is te r Al-Arhabi recognized that aid absorptive capacity and indebtedness are usually cited as concerns for countries receiving foreign financial assistance. In the case o f Yemen, he stressed that the country receives substantially less aid per capita than other countries in similar development situation. In this regard, he emphasized that between 30% and 50% o f aid has been directed into large jo int projects/programs such as the SFD and FWP that have performed outstandingly, and suffer from under-funding rather than absorptive deficiencies. On indebtedness issue, he stressed that the preferred financing modality should be grants rather than loans.
59. Minister Al-Arhabi concluded by requesting donors to support the PIP, and by stressing that the PIP i s a working document which will be finalized based on realistic outlook for future levels o f aid.
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Comments by the World Bank on the Public Investment Program
60. Mr. Mustapha Rouis, the World Bank Country Manager for Yemen, commended the Government for the effort that went into the preparation o f the PIP and for i t s comprehensiveness. However, he indicated that the PIP could be strengthened in several respects, and suggested that i t be considered a working document, to be refined over the next months, based on following key aspects: (i) tighten the criteria used to select projects in the PIP; (ii) introduce a better balance in sectoral funds allocation (the current PIP favors infrastructures) by increasing the shares o f funds allocated to other priority sectors; and (iii) review the size o f the PIP to take into account future needs for recurrent expenditures.
61. H e also highlighted that, while the PIP as a share o f GDP i s projected to rise by a third, with 40 percent o f funding coming from domestic resources, Government revenues as percentage o f GDP are projected to decline. H e stressed that this will put strong pressure on the Government to reduce recurrent expenditures, and called for a reliable assessment o f the overall implication o f the PIP for the budget.
62. Mr. Rouis noted that the size o f the foreign exchange requirements and the financing gap projected by the PIP are based on several key assumptions, notably a high GDP growth rate o f over 7 percent and an improved absorptive capacity, and called the Government to implement the necessary reforms to meet those assumptions. H e further indicated that the recently completed Development Policy Review by the Bank, which projects a lower growth rate o f 4-5 percent over the medium t e r m and investment-to-GDP ratio o f 8-9 percent, does discuss in details the challenges that Yemen faces.
63. investment projects for a total amount o f about US$800 million, o f which US$500 mi l l ion undisbursed, and that all key performance indicators have significantly improved. H e indicated that the World Bank contribution to the financing o f the proposed PIP is spelled out in the recently completed 2006-2009 CAS which plans for 13 investment projects and programs for about US$400 million, in addition to technical assistance and economic and sector work. H e indicated that areas which will be covered by World Bank support are non-oil growth, human development, fiscal sustainability and resources sustainability.
Mr. Rouis informed participants that the current Bank portfolio in Yemen has 19
64. In his conclusion, Mr. Rouis encouraged donors to support the Government’s PIP and the Government to institutionalize the PIP and make it a roll ing annual plan. H e also suggested that the next CG meeting take place in two years, and that a meeting between the Government and donors take place every 6 months to monitor progress in implementing the commitments made by both parties during this C G meeting.
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Donors Responses to the Yemen’s External Financing Needs
65. Yemen for its National Reform Agenda, and encouraged it to implement reforms planned, especially in decentralization, anti-corruption and public finance management. H e recalled that Kuwait has been providing assistance to Yemen through the Kuwait Fund for Arab Economic Development and other organizations since 1964. H e announced that Kuwait will provide US$200 mi l l ion to Yemen for the period 2007-20 10.
Kuwait’s Pledge. Kuwait’s Representative commended the Government o f
66. IDB’s Pledge. Dr. Amadou Boubacar CissC, Vice President for Operations, reiterated IDB’s commitment to support social and economic development o f Yemen. H e indicated that IDB’s assistance to Yemen, in the range o f US$200 mi l l ion for 2007-2010, will focus on technical assistance, capacity building and investment projects in water supply, education and vocational training, health, rural roads and energy.
67. European Union. Ms. Ei ja Rotinen, Head o f the Finland’s Delegation and Representative o f the Presidency o f the European Union, stated that EU i s supportive o f economic and governance reforms in Yemen, and welcomes the renewed commitment o f GCC towards Yemen. H e encouraged the country to make further efforts in implementing reforms, especially in anti-corruption and transparency, judicial reform, human rights, and gender equality. H e recalled that EU has cooperation with Yemen in the economic, trade, environmental, cultural and social sectors. H e announced that overall EU assistance combining member states and the European Commission will amount to €5 16 mi l l ion (US$660 million) over the coming four years, and that members states and the European Commission would give details.
68. Southern Mediterranean External Relations, commended the Government o f Yemen for the ambitious reform agenda, welcomed the GCC countries among the Yemen’s development partners, and announced that the European Commission’s National Indicative Program for Yemen i s endowed with an indicative amount o f €60 mi l l ion over four years, to be complemented by assistance under specific thematic programs such as food security, human rights, non-state actors, and de-mining.
European Commission. Mr. Christian Leff ler, Director o f Middle East and
69. E1 17 mi l l ion over the next four years to support the Development Plan for poverty Reduction. Moreover, he announced that his Government intends to prepare a Development Partnership Agreement with Yemen, to ensure long t e r m predictability o f aid. Furthermore, he announced that the UK’s increased aid to Yemen will focus on three key areas: (i) supporting the National Reform Agenda and strengthening governance, (ii) supporting priority investments in the PIP, and (iii) investing in education, particularly for girls.
United Kingdom. Min is te r Thomas stated that the United Kingdom will provide
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70. Hamad indicated that the current portfolio o f the Arab Fund for Social and Economic Development in Yemen amounts to 224 mi l l ion Kuwait i Dinars (US$792 million), o f which about US$570 mi l l ion are to be disbursed in the next two years. H e announced that, over the next four years, the Arab Fund will provide US$700 mi l l ion in new money to support the PIP, preferably in the areas o f infrastructure, energy, water and human development. However, he stressed that the Arab Fund i s flexible on the choice o f areas to be supported.
A r a b Fund for Social and Economic Development. H.E. Abdulatif Yousef A1
7 1. Republic o f Korea. Mr. Ghee-wan Kim, Representative o f South Korea at the meeting, indicated that the Korean Government has provided to Yemen grants and soft loans worth US$33 mi l l ion since 1991. H e indicated that Korea continues to be committed to assisting Yemen in the area o f human resources development, and announced a new commitment of about US$40 mi l l ion that will contribute to building a vocational training center and introducing an electronic ID card in Yemen.
72. indicated that Yemeni-German cooperation started in 1960’s and that it has brought €870 mill ion to Yemen over the years. She added that Germany currently supports Yemen with an average funding o f €36 mi l l ion per annum, and that it intends to maintain the same level o f funding for the period o f the current Plan. In total, the indicative German financial contribution to the PIP would be €146 mi l l ion over the next four years. Areas o f interest will remain water, education, sustainable development, health, gender and governance.
Germany. M s . Annette Frick, the Head o f the German delegation at the meeting
73. OPEC Fund for International Development. Mr. Suleiman AI Herbish, Director General o f the OPEC Fund for International Development (OFID), informed participants that OFID’s development assistance to Yemen started in 1976 and so far has funded 27 Government operations in transportation, water supply and sanitation, agriculture and rural development, power supply, health, education and industry. In addition, he indicated that the OFID’s Private Sector Facility has provided loans and equity investments to three private enterprises. H e also indicated that the Ministerial Council o f OFID has endorsed the establishment o f a Trade Facility o f which Yemen will be one o f the beneficiaries. For the next four years, the OFID’s representative indicated that OFID will continue to extend i t s assistance to Yemen in support o f the PIP, through support to programs in roads construction, human resources development, power generation, and water supply.
74. for Economic and Business Affairs, emphasized that the Yemen’s ambitious reforms agenda needs sustained support from the international community to succeed. H e indicated that Yemen and the USA have been partnering to address political, economic and security issues. H e further indicated that the U S A has provided assistance to Yemen in fighting extremism and terrorism, including against the al-Qaida system, as well as in increasing basic services in health, education, agriculture and local governance. The assistance provided over the last few years totals US$330 million, and the USA i s
United States o f America. Mr. Daniel S. Sullivan, Assistant Secretary o f State
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committed to continuing in the future. H e emphasized the necessity o f donors’ coordination to better provide assistance to Yemen, and indicated that the USA intends to strengthen i t s partnership with other donors in Yemen.
75. disclosed that his country’s assistance to Yemen is part o f the EU’s actions, and that it has been active in the areas o f culture, heritage, health, education and research. H e said that in an international effort to reduce Yemen’s debt, an amount o f US$3.2 mi l l ion was written-off by France in 2001. H e saluted Government’s commitment to the Extractive Transparency Industries Initiative (EITI) and stressed that good governance i s essential for management and fight against corruption. H e enumerated projects that will be supported by France -including through NGOs, to help Yemen meet the MDGs. They cover the areas o f livestock, food aid, women integration, micro-credits for youth, training o f judges. H e further disclosed that a strategy document which draws a partnership framework for the next five years was under preparation and will be submitted to the Yemeni Government shortly, and that a total indicative amount o f US$27 mi l l ion o f assistance to Yemen is planned.
France. H.E. Gilles Gauthier, France’s Ambassador to the United Kingdom,
76. Monetary Fund, commended the Yemeni Government for reforms already undertaken, and stated that his organization was ready to support Yemen’s reforms program, especially in the areas o f public finance and financial and banking sectors, through an adjustment facility where Yemen can borrow up to US$220 million.
Arab Monetary Fund. Dr. Ahmed El Safty, Head o f the Delegation o f the Arab
77. African Bureau in the Ministry o f Foreign Affairs, indicated that Japan welcomes the Third Socio-economic Development Plan for Poverty Reduction. H e stressed that the promotion o f good governance, including capacity building o f the central government and local authorities, i s essential for development, and encouraged the Government to implement planned reforms. H e indicated that Japan’s total assistance to Yemen for the last three decades amounts to US$700 million, and that h i s Government will pursue i t s support in the areas o f education, rural water supply and health. H e added that assistance in vocational training, food production growth, electoral system support and local economic and social developments i s also under discussion. H e added that Japan i s ready to provide i ts assistance in cooperation with the international community, including with emerging donors such as the GCC countries.
Japan. Mr. Hideki Ito, Deputy Director General o f the Middle Eastern and
78. Netherlands. Mr. Rob Devos, Deputy Director-General for International Cooperation, stated that his country’s aid priorities are the education, water and health sectors, and stressed that Netherlands’ support will be demand-driven, only grants, and tied to performance. H e indicated that about €22 mi l l ion a year will be provided to Yemen for the next four years, and emphasized that this amount can increase, based on the absorption capacity and the improvement o f the country policy and institutional assessment (CPIA) rating.
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79. Development Agency, underscored that the CG was an opportunity to understand development challenges that Yemen faces, its external financing needs and capacity constraints. H e stressed that his country was committed to Paris Declaration on aid effectiveness, and informed that Canada’s financial assistance to Yemen will remain focused on capacity building for the c iv i l society through NGOs, regional integration and targeted technical assistance to strengthen Yemeni public institutions.
Canada. Mr. Douglas Williams, Director General o f the Canadian International
80. Italy. Mr. Stefan0 Stefanile, Head o f the Italy’s Delegation, commended Yemeni Government for governance and institutional reforms it has undertaken, and affirmed that the third Development Plan provides a framework for fighting poverty. H e stressed that, for the last five years, Italy has provided a total financial assistance o f US$60 mi l l ion through (i) direct financing for projects in infrastructure, public works, human resources, good governance and cultural heritage; (ii) co-financing with the UNDP; (iii) earmarking counterpart funds generated by food aid sales for education and social sectors; and (iv) converting bilateral debt service into financing resources for projects. H e further disclosed that Italy will continue supporting Yemen in the future, in cooperation with other development partners.
81. Director o f the UNDP, announced that her organization plans to initiate a coordinated program worth US$250 mi l l ion for 2007-201 1 to assist Yemen, hal f o f the amount coming from central resources o f UN agencies, the other hal f from interested donors. She disclosed that the assistance will focus on population, basic social services, pro-poor growth, governance and gender issues. She further indicated that the UN system, with i ts focus on capacity building, will assist the Government in the implementation o f i t s Reform Agenda.
UNDP. Ms. Amat Al-Alim A1 Soswa, Assistant Administrator and Regional
82. although new in such a forum, i s committed to assisting Yemen, especially in the areas o f deepening democracy and human rights. However, he indicated that a financial pledge could not be announced at this stage.
Spain. H.E. Marcos Vega, Spain’s Ambassador to Yemen, said that h i s country,
83. China. Ms. Wen Yang, Head o f the China’s Delegation, recalled that Yemeni- Chinese cooperation i s fifty years old, and that areas o f cooperation include education, sanitation, fisheries, culture, and military. H e indicated that h is country will continue supporting Yemen in these sectors, and encouraged the development community to support the Yemeni Third Development Plan.
84. International Fund for Agricultural Development (IFAD). Mr. Abdalla Rahman, Director o f IFAD’s Programme Management Department, recalled that IFAD’s mandate focuses exclusively on rural poverty reduction. H e indicated that IFAD has so far funded over 90 projects worth US$1.2 bi l l ion in the North Africa and Near East Region countries, o f which over US$200 millions in Yemen. H e revealed that the current portfolio comprises five projects for about US$60 millions, and indicated that his organization intends to formulate a new country strategy for Yemen, taking into account
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the country’s Third Development Plan. For the next f i ve years, an indicative amount o f US$70 mi l l ion i s planned to be lent on highly concessional terms.
85. that h is country supports the reforms agenda in Yemen, and indicated that Turkey will contribute financially to the development efforts o f Yemen, without disclosing the amount o f support.
Turkey. Mr. Sadik Arslan, Counsellor at the Turkish Embassy in the UK, stressed
86. International Finance Corporation (IFC). Mr. Edward Nassim, Vice President for Europe, Africa and Middle East, informed participants that IFC i s already involved in oil, private sector development and banking sectors in Yemen, and indicated that IFC is looking for additional projects in health, manufacturing, construction and o i l refinery. H e stressed that if these projects materialize, IFC and i t s partners’ investment in the country could reach US$700 million, o f which US$190 mi l l ion from the IFC. H e added that IFC i s also involved in supporting the small and medium enterprises development, gender entrepreneurship and business environment improvement.
87. stressed that his country supports the development efforts o f Yemen. H e indicated that Bahrain will support the Yemen Investors Conference planned in early 2007, and added that h is Government encourages the Bahrain private sector to invest in Yemen.
Bahrain. H.E. Shaik Ahmed bin Mohamed AI Khalifa, Minister o f Finance,
CONCLUDING REMARKS
Closing Statement by the World Bank
88. Ms. Daniela Gressani, the Co-Chair, stated that the C G has represented an important step in the process o f enhancing the partnership between the Government, i t s development partners and neighboring GCC countries. She recalled that the Government (i) briefed participants on recent progress in economic and social reforms, notably in implementing its National Reforms Agenda, (ii) outlined i t s vision for the fu ture development o f Yemen as contained in i t s Development Plan for Poverty Reduction; and (iii) presented concrete areas where it was seeking assistance in the context o f i t s 2007- 2010 PIP. She stressed that development partners expressed their appreciation for the considerable progress that Yemen has made, identified areas where the Government may need to focus more upon, as well as their planned assistance to Yemen in the coming years.
89. The Co-Chair then summarized the main messages that emerged from the discussions. The f i rs t message was to commend the Government for i t s economic, governance and social reforms and to encourage it to continue these home-grown reforms. She also stressed that the meeting welcomed the announcement by H.E. President Saleh that Yemen will be joining the EITI, and emphasized that the Development Plan for Poverty Reduction provides a framework for the continuation o f these reforms, focuses on the key development challenges (declining o i l resources, the need to generate non-oil growth, high population growth, poor human capital, water
23
scarcity, poor infrastructure and limited access to social service delivery) and identi f ies the key programs needed to address these challenges, namely investment, technical assistance, and policy and institutional reforms.
90. M s . Gressani emphasized Government’s commitment to continuing implementing i t s National Reform Agenda, especially governance, so as to be able to implement effectively i t s development Plan. In this regard, she stressed the progress made in the key legislative steps and institutional reform actions.
91. represents the f i rs t major efforts to prioritize Yemen’s investments needs consistent with the overall macro-economic framework. She announced that Wher refinements will be undertaken soon to further rationalize and streamline investment priorities, and indicated that donors have made indicative commitments o f at least US$4.7 billion, or over 85% o f needs, to support the PIP. In addition, she pointed out that donors have agreed to increasingly use country systems to provide their support commensurate with progress in improving procurement and public finance management systems, and to harmonize their activities and leverage each other in delivering their assistance.
She indicated that the draft 2007-2010 PIP i s a commendable document, as it
92. considerable economic benefits in enhancing that partnership, and said that further technical work will be needed to establish a practical action plan to advance this partners hip.
On the Yemen-GCC countries partnership, the Co-Chair indicated that there are
93. 2007, and disclosed that it was agreed to have another C G in two years. In the meantime, to maintain momentum, meetings between the Government and donors would take place every six to twelve months to review the progress made in implementing commitments made by both parties at t h i s CG meeting.
The Co-Chair announced that an Investor Conference will take place in early
94. She concluded by thanking the Government for the effort they put in preparing the meeting, in particular President Saleh who personally attended the meeting. She thanked also all development partners for their participation and constructive dialogue with the Government. Moreover, she thanked the UK Government for hosting the meeting, and the GCC Secretariat for the sponsorship and a very high level representation from i t s member countries.
Closing Statement by the Gulf Cooperation Council
95. H.E. Abdulrahman bin Hamad Al-Attiyah, Secretary General o f the Gulf Cooperation Council, stressed that the CG meeting was a great success, and enumerated a few aspects o f that success: (i) the level o f pledges exceeded the pledges o f any previous C G meeting for Yemen, and the pledges from GCC countries exceeded 50 percent o f the total pledges; (ii) donors were informed o f Yemen’s progress in economic and social reform, good governance and the Government’s vision o f the future expressed in the thrd development plan; (iii) by attracting some 40 countries and organizations, the conference
24
represented a f i r s t step towards a long t e r m partnership between Yemen and the donors, especially the GCC countries; and (iv) r i c h debates in the panels wh ich enabled participants to discuss Yemen’s challenges and suitable solutions. H e concluded by expressing the GCC readiness to assist Yemen in i t s development process.
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ANNEXES
27
28
List of Participants
29
30
Head of Delegation
31
32
33
34
ent
35
HEad o f Delegation
36
BINNAWAF, &RH. Prince Mdwmxmd Ambasasdox o€ the K3.A. London
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38
39
40
41
42
43
44
Opening Statements
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46
Co-Chair's Opening Statement
Ymr Excellency the President of the Republic of Yemen,
The early artention that I have given reflects the h c t that Yemen, which we consider to be the single largest development challenge in &e Middle East- i s a top priority fm the World Bantc. The high rate of poverty ia a large, Y Q W ~ and rapidly $rou.ing poplation i s a m9m of Beat cmc- not only far i ts impact on Yemenis but idso lwkmg at bre wdl-known nexus between poverty, devekqxnmept and insecurity in the world. Yemen faces unique challenges and circaunstances: declrning oil resources, the need to generate nosx-uil growit& poplatian growth, poor hunman capital, water scarcity, poor jnfrasmcture m.3 h i t & access PO social service: &livq.
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48
UK Government's Welcome Statement
Wekame to Lancasteg House.
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t should lead to mure econuirmic growth aad prosperity fbr the p o ~ r a s well as better access to jobs, education, heal& and justice.
50
51
Remarks by the President of the GCC Min is ter ia l Counci l
52
53
Remarks by the Secretary General of the GCC
tement o f the Gulf Coaperatioln Cauncil (GCC) at the Opening Sessian of
$he Yemen Consultative Group Meeting
Laneaster House, London 15 November 2006
Your E x e l Republic of Yemen Your Highnesses: and EsceIlendes Ladies and Glentkmen
y President Ali Abdallh Sal&, Presideat of the
The leaders o f the GCC made a historical decisiun hi the December 2001 summit by iut-iting Yemen to join a number of CCC specialized agencies adopting a mechanism to trmsfum the traditional ties between the two sides h u q & active cooperation in a 1 fields, especially iu the economic field. Last December, the GCC Stuntuit adopted mother imnprtmt decisioa, to hold a joint meeting of the fo re ig~ ministers o f Yerum arid the GCC, u&om met last &.€arch. The idea of a duiiors' ~ ~ n f ~ r t ~ 1 c e sponsored by the GCC was born at
54
that meeting. A Joint technical committee was formed to s h d y Yemen's develupnient needs and translate it into a working plan and the-specific progasn.~, and present that plan to this conference in order to establish new c l m e f s for financing development projects in Yeinen.
i0t.w the past months, a sig&icaat number. o f important studies were completed about Yemen's development requirements and economic reforms. Ari ambitious investment program fix the next forw years has also been prepwed far presentation to your conference. It iricliides WXXS o f iniportnnt development projects mid their financing needs. The joint comnitke has also covered a lot af g o w d in studying appropriate mechanisms to support Yemen's capacity to absorb external aid and the ability to carry out those projects in a timely fashim, consistent with the timetable set forth in the investment progarr.1.
Your Excellencies, Ladies and gentlemen,
This conference i s a significant iudertiilriug to provide for the devefopmeiit needs o f Yerneri - significant not only in the size o f pledges - which we hope will be generous, but dso in the long-term parhership that we trust will be established between Yemen m d the donors to h i d development Ur Yeinen in an efficient and trmsparenlt economic climate, in light o f the economic re€onns that Yeinen has introduced started to implement. We therefore look at this conference not as an end, but as an important step at the begiming af the road=
Tfie National Refam Agenda which Yemen has iutrdticed i'epresents a significant ingediexit to achieve i ts development goals md enhance i ts himan developnlent indicators, especially in education, health atxi enabling women to participate more effectively hi the
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Statement by H.E. the President o f the Republic of Yemen
Consultative Group Meeting Quotes of the Qpening Statement o f
H i s ExreHenry the President of the Republic o f Yemen London 15-16 November 2Q06
“We, in the Republic o f Yeniea are lmking fomrd for positive and effective results and true part.nership with ow brothem in the Arab rr=gim, specifically with the cormtries of the Gulf Cmpmt im Council (GCC) as we are a l l considered one territory. We we also lookkg forwasd to the l ie lp of our Eriends from the United States o f h a i c a , Europem Conmissian, and h temt iona l ~gmizat iom, to work hand in hmd in fighting pverfy and addressing w e m g l o p i n t . Since 22 May, 1990, the Republic of Yemen has opted ta for fnufti-party democracy, freedom a€ expression and press, respect of humau rights and w ~ m m participation as woma now have become minister, an ambassador, a voter as well as a candidate. They have reached leading positions in state and hiterriational orpaizations.”
‘“ear brothers &esi&ential aid Local Elections were heid an die ZO* o€ September in a competitive env i rommt and with the participation a f a l l political parties in Ywieq that was reported in the Arab aid k temt iona l media. There was real nud houest competition with the testimony o f ititmiatianitl observers. The election was riot a Tfrird World chum as some tried to depict it. We axe pioud of s l~ch contenfion in the midst of difficult and w i q h i g democracy. Nm-deinmmcy is wen more difficult. The advantage ofdemcracy i s that it exposes what i s under the table.”
The Presidmt uswed that the Repriblic o f Yemmen would keep up the path o f d m m c y , partisan plwalisni, respect of huruan rights and press tkedonr.
“l%ere i s the election of ~ Q V ~ Z X O E aad district directors coining soon. There are also amendments to the elecfil4.n Law a f h c a l Couucirs. General Secretaries of Local Councils have k e n elected at district and gavmorate level iU order to stragtben partnership w2h the people as the mthority and source o f power. This is b the core of our dmestic and extemal policy. The beginnkg had been diff icdt six y e m ago as we faced resistmce to the electioiii of Local Councils but we decided to go through this eqei-ieiice and if it succeeded
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w e u30111d pwsrie the same path but if it failed, w e wozild start looking for other alternatives. Fortunately7 &e experience wax a success and eucoumged u s to go forward in i n t r h c k g m m mimdmen& to Local Camci l Law. ’CVe are now anticipating election of heads ‘‘ We started re fo rm in earlier times without any pressure as we believed that i t was ow respoiisibility to do so and we will git’e a clear picture to o w ileighbn specidly co’IxfltTes o f GCC on what has been achieved in this regard hoping tliey gise us a haud.”
H e pointed out that deficiencies have been address& t.b.xiu& the firmncial, adxninistrative and judiciary r e f o m .
“We have made goad progress in uris regard as judiciary now is totalty independent. Thiere was a nmibef of measures as well as issuance of new legislation, including d - c o q t i o n law3 Procurement and Tendering, and Financial Disclosure Bill. They are cwrently being debated by parliament. In additiou, there will be anxmhents to the Law ofCon%l.ol and Auditkg to make the Ceatrd Urgmizntioa for Control and Au&kg a n independent Agtncy. A Board upill be famed to hiplenieiit the Law of Financial Disclosure Bill and will be represented by honest md competent Staff. This i s to asswe OM hthm in the cowitries of GCC and friends fbni donor countries, Funds and Ckgmization of our serious comruitmeiit to a-eforrus.’*
The President hoped that the meeting would prcbdirce better results than the previous meeting in Paris which Yemen has benefited 20% in pledges.
‘ ” f i e projects before you are well studied aad you can go tf~ough them thormi@y aud send them to tender committees and find the best way o fhpkmat ing them. But what i s important i s to observe rctmrctrete results and get help fkom ow brothers
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because Yw-ren, wit11 population o f 21 Illillion inhabitants, being out ofthr: gulf borders i s not in favor of &e whole region.*’
H e also shed the light into the poverty and its irnpfications on the security and stability as p a r youth arr: dragged iato terrorism. “The security of the coun&ies of GCC and Arab region i s the security o f Yenia. We are m e part that cmY be divided.’>
H e expressed his gratihde to United Khgdorn for scaling up its ~11pp01-t to Yemen.
‘‘Poverty is ~ u 1 epidemic and a fertile mvimnment for mobilizing terrorists who explode themselves. We, in Yemen2 have suffered k m tmorisrn as a31 countries have. Recently there were two incidents during the presidential and local election last September targeting oil refineries in Marib ad Hadramout. But because o f the attentive security mea, those attempts were ahte i i and the couuEry was mv-d h m an m - h m e n t a l and economic catastrophst. Therefore, we hqx that w e complement each other. to safeguard security and stability in the region. Together we can be a massive pourer and a heairy number that will not be taken lightly.’’
“When we talk ahnt nuclear energy. we do not intend to be a nuclear co~mtiy but using nuclear energy econamicdy fur peaceful purposes. We cau establish such projects in the United Arabs of Emirates, Saudi Arabia, Qatar$ Bahrain, Kuwait, Oman, or even in Ymm. We can establish a cuiiyntly or joint venture fkom which we all benefit nnd cut d a m ow dependency on oafiers and reduce the ecoiiumic waste in the field o f enexgy ~ u c ~ 5 n . ”
We welcome investments from the gulf cornhies and any other cowit.ty around the world.
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Statement by the Kingdom of Saudi Arabia
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61
Statement by Qatar
62
Statement by the United Arab Emirates
63
Statement by Oman
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Statements by the Yemeni Government and Multilateral Organizations
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66
Statement by the Minister of Planning & International Cooperation on Economic Reforms
Poverty starrds at 36% o f the tatd popdntiarr, 41% fa mal areas..
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Yema's human resource deficit is daunting. Dliitrsncy among thase abve &e age af 10 stood at a staggering 46% in 2003. Education dropout rates are tmrp;3cceptably hi&, especially m m g females.
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picture is even more puzzting: Yemen receives just 12% of the avemge aid-to-GaP ratio far all L D C ' S .
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The Plan needs $7.8 billion dollars: of external hdinp, over 5 yews. 1Qf this, $1 billion has already bem programmed by our donor partners - leaving a $6.8 billion finmckg. g;ap h t .we hwe ta attract suppod for. Of this, $5.5 billion i s needed far dis-t f" &e period 2007-10, and anather $1.3 billion for &e period beyond in order to
ects launched during &e Plan period.
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Statement by the Arab fund for Economic & Social Development
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Statement by the Islamic Development Bank
The Statement of The Islamic D e ~ e l ~ p ~ ~ e ~ t Bank
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Statement by the United Nations Development Programme
Excellencies, Honourable Ministers,
Ambasradars. L & e s and Gentle-
Let me begin by thaatring the Co-Chairs of &is meeting His Excellency F& AM&- &rim bl-Arhabi, Minister o f Planning aud htcmational Cooperation of the figtublic o f Yemen
and M s . Daniela k s k , World Bauk Vice-President for the Middle East and N o h Africa
region, for &e oppartunit4. to speak today.
I s inmly believe that our being here today attests to mu common cormnitmeat - Ur t m e
partuership with &e govamnent rrnd people of Yemen - to attain the ambitious, yet achievable.
development agenda that i s before us.
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Afkica - d s Yemen at number 150 out o f 177 States. T h i s represents 8n increase in the
Huanan Develapmt Index tiam 0.394 in 1990 to 0.492 in 2004.
Togethex, OUT starting point i s clear and articulated in &e country's reedy appmved 5- year "Dmrelopment plan for Poverty Reductian" @PPR 2006-2013)-
T h i s Plan recognizes the need to combne economic growth with the fair distribution Q€
its benefits- In a nutshell, &e Plan aims to raise the growth rate From an average of4% durlng the
previous periotd to over 7% so as to address the dual chdleages of k a m e poverty and
U n ~ l O ~ t .
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In conclusion, Horrombk Chairs, Excellencies, ladies and gmflanen, my dear
Colfeagucs;, I wish the participparmts of &is distinguished and important conference every success
in cementing new pastnerships, and putting those p i ~ t i ~ d ~ i p ~ into practice for a %axre of
prosperity that the people of Yeruen so desperately want and so much &ewe.
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Statement by the World Bank
Sfatemeat by the World Bank opening Session
November 15,2005
Your ExceUeltty the fresldent af the Republic of Yemen,
I am very happy to welcome you once again on b e M o f the Wcn-Id Bank for &is f d meeting ofthe Cmsdtative Goup for Yemen.
T'he achievements o f &e 1990s were followed by a period of hiatus in progress and in refofins between 2800-2005 which i s the period of the Second Five Year Deveiapment P h and the First PmP. This Eack a f p r ~ g ~ ~ s in pvaty reduction, pier capita income grm& and most human development indicators has been c d & y acknowledged in the Govmexlt 's Pmgess Repart for the First PRSP. the Completion Report far the Bank's 2802-2805 Caw~try Assistance Strategy and the 1949-2005 Corntry Assistance Et-aluation uruktaka by the World Bank's
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Independent Evaluation &up. As many of you also know, this la& of progress in policy peifanmwce led to declining Countsy Policy and Institutional Assessmest &PIA) ratings which are a key input hito the IDA Performnnce Based Allocation system and bhm writs consequently a s h y reduction (34OA03 in IDA allocations in FY2005. hpcmant lessms were learned from &is perid and were &carporated iUt0 the: design of the 2005-2010 Tzlird Socio-Economic Development P h for Fovr=rty Reductim~ as w e l l as in the World B d s 2W6-2009 Country Assistance Strategy.
Yemen's Development Challenges
Yemen remains confroinked by faw major challenges.
The first challenge i s to diversie i t s economy from a declining oit sector. AIthOugh oil reserves could increase in the fc&ure and gas exports could partially offset the loss of oil reT-emes, non-dl growth will be crucial trs generate employment and for generating nm fiscal r e x m e s .
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Second, considerable efforts haye been to increase judicial indep.endence and the funceicming of &e judiciary. The separation of pwr between the executive and the judiciary has bew achieved by rnaking the head of the Supreme Court as the head o f the Supreme Judicial ccluncll. Many personnel related actions @king, firing and training) h v e alyo been taken to imprm-e court p e x f m c e in addition to actions to improve the court infonnatian *stsucme.
Lioaking ahead, there are h key challenges:
World Elauk Snppart
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Our non-lending advisory smlces have also been key activities in helping &e Govesnme& in its reform program First, as the Goxmnwat was prepaxing its Thirdi Five Year Plan, &e Bank prepared a Deveropmwt Policy Rmim as a key analytical @ut which p l i i d e d an integrative ovmiew. Second, the B d h s provided s e v d key themtic and rectoral diaposdc rgrorts i n c l d g an ltlvestment Chn-ite Assessment that has gauged fhe constsaints facing the private sector; a Ch&ry Social Analysis that has assessed the social constraints; a Country Water Resources Assistance Strategy that h a s provided integrative advice on the water crisis; and an Urban Land Management and Regisbation policy rgrort. Third, the Bmk provides ongoing technical assistance In several key a r e a includkg: public financial management; pracweplent; s t a t i s t i d capacity building; and children and youth issues.
In closing I would like to come& the G a v ~ ~ t for the recent progress it has made and mcournge it ta stay the mwse in successfufly hplemating i ts National Refam Agenda and %d Plan as well as projects f m c d both fsom its won resources and those &om its development ~ZK~EID a r o r d the table here today. The World Bank remains conlmined t5 working with you and with other development partners ta supporf you in implementkg these P r o m -
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Reports of the Working Sessions
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Session 1: Development Plan for Poverty Reduction and Achieving the MDGs
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Session 2: National Agenda for Reform: Achievement and the Road Ahead
The hmlz~tion o f intenths into actions beyond legislation would donor support 9nd capacity buildkg so that new procedures we applied area of civi l service reform moving beyond measures already taken for r m v i q &&le dippers and ghost u.orkeps to the application of a radical ref- is cwhgmt upon strong donor supalost. to cover &e cost o f sta€€rerrencbmmt and retooling.
Work already s e d on public fixlance management reform through concmed &nor suppcnt &I &e national public b c e action plan \would have to be & e p d so as to bring a h t greater coherence between &e planning and budgeting processes and i q r o v k g oversight over the use o f public resources.
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Session 3: Donor Harmonization and Project Implementation
On behalf &e delegates, ow session has looked into three main areas, the first was aid harmmiza&im and aligment agenda, &e second was the aid ma&-, and the third was the issue o f aid absoqtim.
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Session 4: Yemen’s Partnership with the GCC Countries
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Statements on Priority Investment Program
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Statement by the Government on Yemen public investment priorities and financing needs
Tvblic Investment fr*iorities 9r Financing Needs o f the Republic of Yemen'
Stafemeut by AbdnlkaIim. 1. Al-Arhbi Mnisfer of Planning and International Cocrpen-iticrn in the Republic. of
Yemen
M s . C h i m a q Excellencies, Esteemed partners, Ladies and Ckntlennen. ..
I t i s my plaasuae to have the opportmity to o p proceedings on the second day of &is landtnark went for Yemen Yesterday, we ccnvered a lot of gomd with a cumprehmwive
statement by H.E. Ali AbddlzJr Sdeh President of &e Republic, as well as other s&mmh by several pzdsaess, fallowed by presentatims and cksaited discussions in 4 Working Sessions.
So it has been clear that we have to do wmethg, especially in the context of decking oil resowces.
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Out o f 185 = projects submitted, $5 were selected far iaclusion in the PIP. Taking into account existing projects with assured funding. &e ot-erall irnresfment budget in the Plan md the PIP are m&dy equal to S 13 billion over 200’7-201 0.
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I t i s the first of its hi8 111 Yeaken
The Plan needs $7.8 billion dollars of extend h&g. Of this, $1 bdlian has already bees programmed by QUI: &nor parhers - leaving a 36.8 billion hnciug gap that we hope to a%tract sqport for, where $5.5 b i o n i s needed for the period 2007-10, and ano&ez $1.3 billion for the paiod beyond in order to complete projects launched during &e Plan gwriud.
It is against this bckpund that we feel c d h t of ozl~ partners' understmdiag and agreement with o w seated development nmds and goals. Elsewhere, the case far the need far Yemen's greater participation in the regional and global m&ets has been stated. All partners are aware of OUT plans to accede to &e GCC and the W O .
The PIP i s central to our eEorts to become a c o m t q of 'mediain human h e l o p m t ' . It i s also the I l feblod for Implwle-atiag &e National Refom Agmda.
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Comments by the World Bank on the Public Investment Program
Statement by the World Bank Public Sector hvestment Program
Xovember 16,208)ti
Excellacies, Ladies and Gademen,
The Pub& Inwesbment Pragram (2007-2010)
!!%‘e commend the Govenunent, and espech€ly the &&istry of Piannirng, on the considerable effort that went h t o the prepamtian o f the PIP. The progrm i s comprehensive, includes prqect briefs for a l l new projects, Uscarparating the results of feasibility studies, and presents details on sector develaprnent strategies and rn the selection criteria used.
The present PIP coutd be sfsengthened in several respects folloning this donor meeting. We therefme saggest that thir; version o f &e PIP be constdPred a working d-t, to be adjusted and refined over the next sUr month, when &e k&l oTntlook, both domesdc and e x t d , fix public investment should be clearer. Wiring this process o f PIP revision, we suggest th t paaicular attentian be paid to the following three key aspects o f &e program:
First, when reviewing the composition of the PIP, it might hefp ta tighten the criteria used for the selectian of projects. As m e of the annexes to the PIP details, a large number a f b& g a m 1 and sector-specific criteria have been used in the selection process. We suggest that &e potential €or job mat ion and poverty reduction should be &e o~erriding criteria far project selection. other g m d criteria need to be established such as thcrse reflecting the role o f g o v e m m t in the ecmomy~ the ecrncmic merit and technical quality o f the project, and inyllementatian capachy of the respomible agency. The stxategies and p~kfitits set out kn the
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Plan should then guide the process of prioritizing among &e project5 that meet these criteria, both between and within sectors. I t &odd be macle clear which of the many current sectoral crikxia are mast important.
Third, it is snggested t h t the size of the PIP b e reakwed lo take into acraunt f n k e d a h s an the state budget to cawr recarrent expenditures. h e s t i c budgetar). resources will need to contribute both to the investment cost o€ prajec’ts and pay fw many of the c 3 a k on the budget azis iq from opecation Hnd maintenaafe casts of ehe: new projects- Estimates of the need for government funds to cover both kinds of expenditures have been prepared by the variaus agencies fix &e projects under their responsibility, but without a clear indication on whether s i t e budget %;ill be available kt meet these claims. 51 &e ahenre o f details on &e medium tern outlook far the budget, &is i s ideed hard to assess, bist the broad pmjettims in
W M e the Ran sham public investment as a share of GDP riskng by a third, with 40 percent o f it to c ~ m e the government’s awm reso’tlrces, gox7ernmemt revesne its a percentage of GDP if projected to decline. Within the overall budget, this will put strong pressure an &e Gm7-t to reduce c m n t q m d i t w e , in particular the relatively large wage bill and diesel dsidy. W e &e PIP recognks the need to pay €or &e U&M costs of projects once &q are complete4 and &cludes estimates of i t in the jnhvidual project briefs, there i s ne reliable assessment of the a v d implica6.Ons for the budget. This underhs the kpxtance of
a d o€ close c o l l a h t i m between MOPIC and MOF in &e process lo€ ing a d 5&g the PIP over the next fkw months.
coqieting the prepadon Q€ a medium term budget frsuneu.ork without
T h e FaBernid Financing Requjfements
AEow nlp to say a few words &mi the external financiq r e q ~ m m k o f Yemen. This is usually estimated thraiigh the projectim of the baiance-of-paymeats. Wdbmmtely, this; exercise has aat been done. h t e s d . the PIP provided a breakdown between domestic firurncing and external being. Of the total amount o f the faw-year investment program ($12.6 billion), external funding i s e s b a t e d by the gcfvenrment at $7.0 billion (ar 55 percent), of which $1.5 billion i s either rammitfed by the donors or tentatively earmarked, thus leaving an nnfnnded gap of $5.5 billion.
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capacity. The recently completed Devehprnent Policy Review by the flank, Fvhiczl projects a lower growth rate of 4-5 percent ovex the medtrua-term and investment to GDP ratio o f 8-9 percent, does discuss in details the challenges facing Ye-.
3n conclusion, gives the seiious cbailenges fa&g Yemen, a considerable investment effort, in the p ~ b k and private sector, i~ needed to achieve the objectives of the Pfan, namely poverty riednctim. %mrs are encouraged to support the G m m a t ' s pxblic kvesmrent program by confirming heir existing pledges and by increasing their assistance towards f i g the furancing gap. 011 the other hand, g o y m a t i s encouraged to institutiomlk the PIP and d e it a m h g annual program. The g o v m e n t i s also mcouraged to ;mpro..ire its capacity of implementation thsough a continued lef€ort of reform
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Written Pledging Statements
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Islamic Development Bank
Pledging Statement by the Islamic Development Bank Group By Dr. Amadou Boubacar Cisse, Vice President (Operations)
(London, 15 - 16 November 2006)
Madame Chairman, Honorable Min is ters , Excellencies,
I w o u l d l i k e to re i terate that Y e m e n Development i s ve ry high o n o u r agenda. IDB i s commi t ted t o t h e social and economic development ef for ts in Y e m e n and fully suppor t t he country 's development targets and needs as fo rmu la ted in t h e third Development Plan.
Based o n this, IDB envisages r a i s i n g i t s assistance t o Y e m e n t o b e in range wi th USD 200 m i l l i o n in var ious modes o f f inanc ing over t h e four-year p e r i o d (2007-20 10).
I D B ' s fu tu re in tervent ions, in consul ta t ion wi th t h e Government o f Yemen, w i l l focus o n technica l assistance, capaci ty building and feasible projects ready for imp lemen ta t i on in t h e fo l low ing sectors, considered as p r io r i t i es in t h e Third Development Plan:
Wate r supply, g i ven t h e l o w endowments in w a t e r resources Rural primary schools and H e a l t h Centers where a l o t rema ins t o b e done
0 Vocat ional training as a too l t o reduce unemployment and fac i l i ta te t h e p r i va te sector development.
0 Rural roads and elect r i f icat ion in order t o a l lev ia te pove r t y in t h e landlocked areas by easing t h e movements o f persons, goods and services, and increas ing t h e prov is ion o f social services.
Finally, I w o u l d l i k e t o commend once again t h e ef for ts o f t h e Governmen t o f Yemen and t h e suppor t o f t h e i n te rna t i ona l communi ty , and r e a f f i r m that IDB wi l l r e m a i n commi t ted and engaged for t h e sake o f development in t h i s i m p o r t a n t and esteemed country .
Thank you.
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The European Union Presidency
Yemen Consult~tive Group meeting
Lmdon, 16 November 2006 Statement by the Presidency of the European Union
The EU i s strongly suyportive ofthe democratic reform process midelway in Yema. Most recently? this was evidenced in &e dep loymat o fau extensive EU elections observation mission to the PresideBthl and local efections of 20 September,
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Yemen's commitment to and efforts for refom are corrmen&ble. Last yea, m ambitious refom a g e d a was adopted - now i s the tirue to put it into practice. Determined policy decisions are needed to move from planaringr to hplematation, and from WOK& to actions. In m y fields, this work is already well ay. In others, mure effbrts are needed.
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European Commission
Consultative Group Meeting far Yemen London, 16 Nwember 2006
Statement by the Eurapean Commission
This meeting pruvides nn exceiseut opr t tmi ty to discuss the way ahead with the Government o f Yemen aid with the community of multilateral aid bilateral donors. The Comission welcomes in particular the rmewed political and fumchl c o ~ i ~ ~ e ~ i t by the GCC towards Yeme% which i s a powerful s i g i d of the WC's interest in regional stability and SeCtKify.
We commend the G o % ~ e m & o f Yemen for the ambitbus refonn age~dn it has presented. We see h t it contains precise targets for a large number o f m a s , mn,giag from of justice, hwmm rights, fixedom of the press, the fiL&t against cmpt ioa , d ~ ~ ~ s a ~ o n ~ economic reforms, public f i m c e and civi l service re fom. We would like to stress the need for i this reform agenda. Only a continuous will to imde&&e the Ipecesf*i;iry refomis m i l l lend to the expected results.
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United Kingdom
Pledging Statement
Gareth Thomas, farliarnenfarv Under Secrefaw o€ State for International f)eV&ORmpBt Tharsdrv 16th November. Donor Ple-d~iu~ Statements
H.E. President Saleh, Ministers, Ambassadors, Chair, Ladies mid Gentlemen.. .
I say compelling because: Yemen has hi@ levels of PQV~X~~T.; i s extremely t.tmlnerab1.e to even fkther increases in poverty and inequity; i s substantially urider-ai&ed; aud the @ovmnmt has set aut and confirrued its commitment at the highest levels to irrzplemmthg an ambitious refarmu ageudn.
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We urge others to do likewise.
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Republic o f Korea
Statement by t Republic sf Korea on the accasim of the Meeting of the Consultative Group for Yemen in London UQ 16 November 2006
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Germany
Statement at the deiqatim representing the Government of Germany
Excellencies, Ladies and Gentlemen,
I would like to express the appmiatian ruf the German GovernmenQ for the endeavours undertaken by the Gwernment of the Republic of Yemen an$ its partners in preparing this meeting. The daeuments pravidad and p&rday% woaking ~8ssiOns give us a clear view of the raspimtians of the ' h m n i Government fer advancing scanamic devetopment, reducing poverty end astabllshlng good governance, They atso shed light on what lies ahead on the path towards achiaving these objactives. Juint e9fOrb of all - national, regional and international partner$ - are needed to accomplish ttrelslft task, The presence of all of' us here at the CG-rtwtitlng is a token of our tammitment to suppad Yemen an ib way bwrds reaching the aims It has set for itself,
European expriencia has demanstmted that regional in on!y fiar the iJlGionornically weaker members but also forthwe parties who are ewnornicaNy tttrSving. We are confident that the integration of Yemen in the GUN Coopm~fbn Council can succeed. The benefits wfll ncd only be af an emnomic nature: lntegnrtlon is likely la stabilize a fragile and volatile political situation and contribute to wurl ty in &e reglan. In many aspects, the Yemeni experience including its multi-paw system, c a m p d t h pddmtial and local eleilctions and suffrage fur wmn can save as a madelt for h e region 88 a whale. Qn behaif of the Geman Government I w l d like to express our full support afthe inltiatiwt of the GCC and Yemeni Government to work Lowards the economic fntegratkn of Yemen in the GCC.
tation can be beneficial not
Yerneni&erman develapment cooperation dates back to the tate sMes of the last wntury. We have mpsdeficed a $uslftll and fruitful moperation aver the p a n . Qver firm, &rman support to Yemen amounts to a tats1 of 870 Millim EURO. The German government currrently supparts Y%men with an average fundiw s&@ of 36 Million EURO pa, and intends to maintain the same level of funding for the period of the current kwloprnent Plan for P~verty Reduction. Germany is active in 4 sdm: Watrsr,
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raduczrtion, susbinable economic dmwbprnent, and health fn addition, we work together in issues related to good governance and gender.
The Geman water pmgrarnme has m ~ ~ n t f y maud from a projsd to a proflmmme appro;ach with the objectbe of impraving water supply and sanitation facilities in medium- simd tams. We hope that ccrordinatbn with other donors act̂ w in the water s&or, most notably the WslM Bank, the Netherlands and the WK wfll mon be conaatidabd in a s e a r wide appmach. This gmup d donors has also engagd in a dialogue 4th all relevant water SeCtQr institutions in order to facilitate the developman€ d a joint strategy Far 1fite)lgr;ated Wabr Rescruree Management. As for our future commitment rlrj the water aiecf.ar we intend to allacab around 12 Miliion EURO p.a.
Germany auppotts the Basic Edum!ion Dewfopment Strategy mmgh technical Zrsdstmce and by contribution to the muftionor trvlst fund BEDP. Crmt total mntribution io the education secfor amaunts to around 15 Million EURO annualiy.
As for German support to ewncrrnic development, our particular fmus is to help es;taMi$h an @nabI!ng business environment, set up regulatory frarnsworks, and hefp bridge the gap between the private sector and vocational training Ins;titut5ons. In the area of Mtilth WE?
provide institutional support to the Ministry of Public Health and Papulation and are awisting in the introductian of sacla1 marketing mathads for mntraxptiwes. We are planning ta allomte around 7 Mi0 EURQ and 8 Million EURO respectively in the ate38 of privab secitor development and katth. Around 3 Mlllfon EURO of annual German kndlnlg are impliementd as nan-earmarked funds by the M a t Fund far Revelopmwtt. In the area d gaurtrnance and anti-coriwptlon Germany provides technical assistance to central government institutions such as the Presidential Offirx, the Centmi Orgarriration for Control and Audit and the Ministry of Planning.'
In tcrtal, the intended German financial oontribution to the DPPR is 448 Millian EURO suQecZ to approval by internal budget procedures.
En our view, prerequisites for achieving our m m ~ n &jectives are progrese in the irnplernentatian of the re.r;Form agerrda, especially in refatlor! $0 enhanced transparency, fight against artuption, and Improvd general prformantxs of the public sector. We also
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hope that Yemen vdl continue h e formutation of se&ml ststrategies as done in the amas of education and water.
Our great mnmm Is water, In some ~iltical areas of Yemen, the much-stressed slogan af 'Mater is life" muld soan signify "sunrival". Infomatian on existing wafer re$ouee$ is scatted and often cantradktwy, while for the wat0r cansurnptbn pattern some fair conclusions are inrailable. However, there is generat mns~lnsu8 that totel water abstraction emeds renewablle waW msourtxs by araund 30 percent - with an upward tendency,
Ow-abstraction of water ms~ums will uSfimafCJJy leati to imwwibly detrimental effects on groundwater basins. As can already be observed fn m e regions, availabiti of water is likely to decreiaae not only for agrlctsltural purposees but, more alarmingty, also far human mnaumption.
Today, agr9icuhm stands for 8096, of water consumption and groundwater-irrigated farms amsume most af the precious resourcie every year. It lo thus evident that signffimf water mVmgs can only be achkved by acflng on Crrfgated agrJcunur?Eb, By investing in improvExf irrigation systems, combined with f l w @ v a exbnsa'Krn services, gwLl;rc?ne93st
building among Farmers and enforcement of the water Iaw, Yemen could gradual@ reverse the water-exploitation trend. Gemany thus calb upon the donor cmcnunity to put soking the water resour~e equation high on their agenda of poMic& twhnical and financial support to Yemen,
G%mny b confident that the sfalea, of the GGC share bur Octncerns and rr~leetlves. We BIB looking forward to dialogue, closer caopsratian and harmonkatian with all donors and am ready to share our experience in dewfrrprnent caapwtion in general and with Yemen in particular.
We wish the Government of Yemen every possible succ~sg In the implementation of this ambitlaus strategy and in wrr'tinuing the dialogue with the neighbours af the; Arabian Peninsula.
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OPEC Fund for International Development
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Ladies and Gentlemea,
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United States of America
President Sale& Esteemed Ministers, and Distinguished Delegates: I t is niy pleslsure to l ad the U.S. delegation to this rzi~t;ta~-k conference, in this historic: building, uii behalf afthe W.S. Secretary uf State, Coadoleeula Rice:
'2 extend my best Wshes ta President Sal&, my estepmnd colleagues from the Gulf, md all of the other donors present; as well as my deep appreciation to H e r Majesty% government, the World Bank and $he Gulf Cooperation Council €or organizing and hosting this landmark ewmk
The U ~ t e d States weIcomcs the strong show of regional and atianal support for the Golveirrment of Yemen as it continues to
embark on its ambitious reform agenda, Yemen i s a ciitlcal ally in the glabstl fight against hmxw&an. I t s stability and prospeiity are Vita to the security of i t s neighbeom and the mrld.
I n order $0 sucreed, the political and economic reforms underway in Yemen require sustained ~ ~ p p ~ i l t fiwm the internatioml community. I enconrage yon to be visiamry and generous in initiating t h i s important new phase of cooperatian between Yemen and the member states of the GGC. W e hope that it will lead €0 peace, %€ability, and prosperity €or all the people of Yemen.'p
Let me beghi by ~ o i i ~ ~ ~ ~ ~ ~ ~ ~ the people ofYemen m their September 20fh Presidatial and local elections. As President Bush noted in his teleplione call to Resident Sal&: We congratulate .the people o f Yemen for coriducthg open, contested efectious that were free a€ widespread violence. *This was a s&nifkant development h Yernm'~ poWcal evolution aud will set an exmiple for the red = on.
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Arab Monetary Fund
Meeting o f the Consultative tihup for Yemen L m d u ~ , 15-16 November, 2006
Statement by the ,41-ab Monetary Fund
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Japan
Ladies and Gentlemen,
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128
Concluding Remarks
129
World Bank’s Closing Statement
CONSULTATWE GROUP MEETING FOK THE REPUBLIC OF 33ZMEN
London, UK Nowember 15-14 2006
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Thanlr you dl hr your lciad attention and I declare the meetkg dosed.
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Gulf Council’s Concluding Statement
Statement of the Gulf Cooperation Council (GCC) At the Conclusion o f
The Yemen Consultative Group
Lancaster House, London 16 November 2006
133
As i s quite clear By now, this conference has been a great success by all measures. I will point aut Just w few aspects of this
1. Piedges made by donors for Yemen's economic phn in this cronf~rence have exceeded those
pledged at any previous Consultative Group Mpeting far Yemen. I would espesiaily like ta highlight the confidence expressed by GCC countries in Yemen, as GCC pledges exceeded 50% of togal, pledged wmounts.
success:
2. The conferewe embled domars to study the Yemeni ~ # ~ ~ r ~ ~ e n t ' ~ report about the progress m d e in ~ o n a m i c and soriaf reform, good governance, as well as the future vision far Yemen as expressed in the Third Plan, The Pubtic bwstment Program for the period (2007-2M03 i s especially cammendable hccnuse it succeeded to a great extent in matching the priorities of the in~7estm~nt program wkh the general .eron~mk framework and ~ ~ ~ ~ ~ ~ ~ o n ~ ~ r policies of Yemen.
3. The strang statement made by PresidenP Ali Abeddlah Sakh at the opening of this coaference emphasized the p e s t importance hs attaches to econamic reforms.
4. Th is canferleuce in which some 40 camtr and international organizations participated hss strengthened
ties between the Government e€ Yemen and the donors. As such, this conference represents a f i rs t step towards a long-term partnerxhip between Yemen aad the donors,
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especially the W C countries. Through this gtai.tnership, donors will help fund dewlopmerrt in Yemen in an efficient and transparent economic e h a t e , in light o f the economic reforms that Yemen has in.h.oduced started to implement.
5. The strong e o d t m e u t expressed by She W o r l d Bank, the VN, and other hternsrltionwi organhation represented *his coderence to assist Yemen in impiementiug the Public Xnvestmen-t Program and achieve the ambitious goals of the Third Deveiopm~nt Plm.
6. The rich debates in the four diseussiou panels yesterday enabled participants to dialogue about the chailenges facing the Yemeni economy and the suitable solutions, ineluding .t.hose challeuges related fo absorption rapacity and project implemmtatian mer
The success o f th is conferpure certainly represents a qualitative leap in the value o f joint work for the benefit of development in Yemen. W e hope thaf this partaership wiU continue R f k r the conference, thruugh continuous evnh&ion o€ i t s results a d suppart for the eRor$s a€ the Yemeni government ta ~ccrhieve i t s development goals. The GCC stands ready fo assist in any way i g can.
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Press Release
T h e Warld Bank M i d d l e East Nasph f i c a Region
World Bank Media Contact: Republic of Yemen
Republic of Yemen Media Contact:
Donors Pledge Commitment to Ycmenls Development
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List of Documents posted on the Government website: www.yemencg.com
In addition to the written statements made during the Conference, following background documents are posted on the Government website www.yemenca.com:
Primary documents:
- - - - Aid Absorption Capacity Study - Project Implementation Mechanisms
The third Socio-Economic Development Plan for Poverty Reduction 2006-201 0 Public Investment Programme (PIP) 2007-201 0 The National Reform Agenda: A progress Report
Secondary Documents:
Governm'ent Documents
- Sectoral Needs Assessment Report - Yemen in Figures - Summary of the Population Census - PRS Annual Progress Report for 2003-2004 - PRS Annual Progress Report for 2005 - Yemen's Strategic Vision 2025 - Preparing Yemen for Better Economic Integration into GCC
World BanWIMF Documents
- - Country Assistance Strategy (CAS) - Investment Climate Assessment (ICA) - Debt Sustainability Analysis - Article IV (by the IMF) - What are the potential Economic Benefits for Enlarging the GCC? (by the IMF)
Yemen Development Policy Review (DPR)
United Nations Documents
- Macro-economic and Poverty Study - - Common Country Assessment (CCA)
UN Development Assistance Framework (UNDAF)
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