WASHINGTON, (PNA/Saba) — The World Bank (WB) and the International Monetary Fund (IMF) have called on Yemen to adopt further reforms to raise the rate of economic growth to exit the fragile economic situation and get its share of international aid.
The WB said that Yemen’s economic recovery is still weak, although it is estimated that Yemen’s economy has grown by about 2.4 per cent in 2012 after a slide into recession in 2011 and the shrinkage in the gross domestic product (GDP) by about 12.7 per cent.
The latest evaluation reports of the Yemeni economy issued by the World Bank showed that the budget deficit has expanded to reach 6.2 per cent of the GDP in 2012, while the current account deficit dropped to about 1 per cent of GDP.
“Three grants oil from Saudi Arabia, each of one worth one billion dollars, have helped in the stability of the situation of the Yemeni economy in general .. However, the improvement in the economic prospects will depend on the progress made at the political and economic levels, and continued support of donors and implementation of the critical reforms “, the Bank said in its latest report.
The World Bank touched on the challenges facing Yemen at the present.
The Bank said: “Yemen is one of the poorest countries in the Arab world, and it is estimated that poverty rates – that were in an actual increase before the recent political crisis – has increased from 42 per cent of the population in 2009 to 54.5 per cent in 2012.”
The report pointed out that the rates of population growth in Yemen is among the highest in the world, and 45 per cent of the population suffer from food insecurity, and also the scarce water resources in Yemen are less than the average for the region.
It indicated that ,over the past decades, the economy of Yemen depended entirely on oil revenues, which account for about a third of GDP ,noting that the population increase has added pressure on the limited natural resources of Yemen.
However, the World Bank commended the uniqueness of Yemen among the countries of the Arab Spring by adopting the dialogue to address outstanding issues, considering the existence of a program to achieve the sustainable development a key element of the transitional phase.
Furthermore, officials at the IMF called on Yemen to carry out further reforms to ensure its share of international aid, noting at the same time to the important steps taken by the Yemeni government to address the budget deficit and double dippers .
The adviser to the Fund for the Middle East and Central Asia Affairs ,Khalid Saqr, said to Saba that Yemen has adopted good financial policies since 2011 with the support of donors, which led to an economic recovery.
He added that among the major steps taken by Yemen is the unification of diesel prices and the decision to create a new system to fight the double dippers in the public institutions.
“However, Yemen needs to implement more reforms at least to protect the gains achieved so far”, Saqr said.
He explained that Yemen was one of the first Arab countries that received aid from the IMF worth US$ 94 million in 2012 through the rapid credit facility.
The IMF’s adviser dealt with the challenges currently faced by Yemen, noting that Yemen largely depends on the oil resources ,which are significantly declining.