Yemen’s 18-month economic plan
The Emergency Economic Recovery Program (EERP) aims to deal with the various makings of an economy, mainly divided into private sector activities on the one hand and the infrastructure and basic services provided by the government on the other.
“Our prime objective is to return the confidence of the private sector in Yemen through facilitating its work and providing it with the means to recover from its losses,” said Sharaf.
The program’s total budget is around USD four billion. Half goes to private sector facilitation and the rest to government economic institutions. Hoping to get the money from the regional and international community willing to help Yemen recover, the program is planned to commence in January 2012 and last throughout most of the transition period up to mid 2013.
The program will focus on providing the private sector with credits in cooperation with local banks in order to recommence trade and export activities with foreign partners. The credits will cover importing foodstuffs, raw materials and other inputs for the local industry.
Simultaneously, easy loans with attractive grace periods and low interest rates will be provided for Yemeni businesses, especially those employing manpower or productive factories.
Moreover, training and rehabilitation projects will be available, especially for those businesses that were affected by the crisis, in order to help them get back into the market.
And finally, the project will provide free logistical and technical services and advice to the private sector across all fields.
“We understand that before everything we need to create an environment that allows businesses to run, for example electricity and a stable currency,” said the minister.
This is why, from the very beginning the program will aim at rebuilding the damaged government institutions such as the Marib Power Plant and its pipelines, get the Aden Refinery functioning again and restore any central government buildings that were affected by the conflict such as the Ministries of Electricity, Planning and Education.
“We can’t promise miracles,” said the Minister of Trade. “But with this program we will recover between 50 to 75 percent of the pre-February 2011 operational structure. We are also working to improve the national currency between 15 to 30 percent by mid 2012.”
In addition to stabilizing the currency to reduce inflation, the program also is going to facilitate the importing of basic goods, whether through the private sector or directly through government imports so that supplies are available in the market.
The availability of foreign credits will reduce the foreign currency drain and also help stabilize local currency and prices, according to the program. Private companies will be given up to one year to repay the foreign credits.
Aid in the form of basic goods will also be coming from Gulf countries, the European Union and the USA in order to support the poorer segments of society, who have suffered most due to the rising prices over the last ten months.
A fund in which Gulf countries, mainly Saudi Arabia, will contribute, will be created to cover the national budget deficient and hence the payment balance. Moreover, according to the minister, donor countries are willing to remove around USD two billion of the USD 6.29 billion external debt, while postponing and creating new payment installments for the remaining amount.