Roadmap for Yemen’s economic recovery
Lead by Dr. Mohammed A-Maitami Chairman of the Khobara Center for Development and Consulting Services, the team came up with a policy paper defining – from a Yemeni perspective – what the urgent, midterm and long term priorities should be, and how to save Yemen from an almost inevitable economic collapse.
Nadia Al-Sakkaf interviewed economist Al-Maitami to talk about Yemen’s main economic challenges and what should be done to face them.
While the entire world, including Yemen’s own government, is still sorting out political challenges, you have been working with your team on the economic priorities for over a year. Why such urgency?
Yemenis realize more than others that although masked with political demands of democracy and peaceful transition of power, our real problems and demands are economic. Today, politics take the lime light because this is what politics are all about. However, without real economic reforms moving on simultaneously all these political efforts face real threats of falling apart in a heartbeat.
As an economist who has been working in this field for over 20 years I saw it coming. This is why right from the beginning of the uprising last year, I and a group of independent Yemeni economist decided to use our skills and come up with Yemeni-lead solutions for existing and expected economic problems.
We started our work in April last year and there was interest from the Americans, the World Bank and other donors but it was really the GIZ that took keen interest in what we were doing on volunteer basis and supported us logistically.
The point is not the lack of money, or donor support that is, but rather local home-gown solutions as to what to do with this money in order to support the country’s economy. We remember that in the 2006 donors’ conference in London over 6 billion dollars was pledged, we could not utilize even 10 percent of it. The reason was obvious, no proposed projects from Yemen to utilize this money.
We did not want this to happen again, and along with another four of my colleges we devised a policy paper for Yemen’s priorities and presented it to the Ministry of Planning which is the government body responsible for this, to the prime minister himself and to the donor community.
What sort of reactions did you receive on this paper?
Amazing reactions! The Minister of Planning immediately welcomed this project which we made totally on volunteer basis and decided to contract our center to create specific economic proposals to be implemented in the transitional period and later.
The prime minister was thrilled with the work we have done and offered to meet with our team on weekly basis to develop this policy paper further and translate it into projects especially in light of the donors’ conference due soon.
The international community also pitched in. The World Bank has already agreed to support our initiative with other donors as well to use the center as a provider of consulting services.
What made your policy paper so attractive that you received such welcome?
Well, to start with, it is the only paper of its kind in Yemen. The government’s economic bodies are yet starting to think about Yemen’s economic priorities while we have been working on this for over a year. The other point is that we are an independent team of Yemeni experts. Our group is composed of high level well established independent experts who have already made their marks in the country and abroad.
We really did all this work based on our conviction that the solutions for Yemen’s economy have to be Yemeni. We need to stop being donor-driven and start helping ourselves in order for the world to help us.
Finally the priorities we provide here are detailed and tested. They are obviously a work in progress and could be developed further but at least it is a solid foundation for economic planning that should be dealt with seriously.
What are the main highlights of this policy paper?
The priorities are divided into three priorities: immediate, mid-term and long term. On the immediate urgent level which we termed as the socio-economic stability phase we have eight priorities: Poverty reduction, humanitarian relief and Internally Displaced Persons, unemployment especially for new graduates, basic socio-economic services, monetary and fiscal policies, governance, private sector involvement and partnership with the Friends of Yemen group.
At the time being we have focused our work on the immediate priorities because these are what Yemen is dealing with in the present stage and for another two years.
For elevating poverty we recommended specific solutions through reforming existing funds, promoting Yemeni labor in gulf markets, promoting vocational trades and entrepreneurship, encouraging labor heavy investments, enforcing retirement policies, corporate responsibility and real involvement or private sector and finally reforming public owned companies to become a source of income.
On the IDPS and relief point we proposed creation of a new poverty/IDPs map and working through existing local networks especially in coordination with the private sector for relief aid distribution.
For improving basic services water was the highest priority, in fact we suggested announcing a state of water emergency. Also creating a specialized emergency fund to cover deficiency in any of the standard basic services for citizens, etc.
To improve the monetary and fiscal systems there are specific measures in reforming the wages and compensation system, inflation control through eliminating monopoly, fuel subsidies reform, consumer protection measures, reforming the banking system, applying accountability measures to the public sector especially in income generating bodies such as tax and custom authorities.
On the governance issue, the main point is to create a transparent accountability system that breaks the monopoly and nepotism cycles, creating citizen-state trust building mechanisms, access to information, reforming the judiciary system and rule of law.
On the private sector’s involvement front we realize the great untapped potential of Yemeni private sector especially those with investments abroad. Therefore, the first point is to encourage capital back into the country through creating a better investment environment in the same time creating specific channels to quickly deal with grievances.
Finally the partnership with the Friends of Yemen group; the main channel is obviously the financial support through funding especially when it comes to the budget deficit. Also direct support to the nongovernmental economic institutions especially though concerned with microfinance.