World Bank Expects Economic Growth Amid Lasting Peace in Yemen

Displaced Yemeni children in Aden (UN)
Displaced Yemeni children in Aden (UN)

World Bank Expects Economic Growth Amid Lasting Peace in Yemen

Displaced Yemeni children in Aden (UN)
Displaced Yemeni children in Aden (UN)

The World Bank expected that a permanent peace agreement in Yemen would achieve significant economic revenues and contribute to economic growth, despite its previous assessment of Yemen's need for billions of dollars for economic recovery.

In its report entitled "The Future: Glimmers of Hope in Dark Times," the World Bank said if Yemen attains a lasting peace agreement, there could be a significant "peace dividend" for the population, a six percentage point increase in GDP growth trajectory which would result in a cumulative increase in real GDP by one third over the next five years compared to the status quo.

It noted that this would be accompanied by significant growth in public and private investment, employment, productivity, and poverty reduction.

It must be accompanied by external donor assistance at scale for accelerated reconstruction and recovery.

The conflict led to a contraction in real GDP by approximately 50 percent between 2011 and 2022. It has damaged or destroyed over one-third of the country's homes, schools, hospitals, and water and sanitation facilities.

Productivity plummeted as violence intensified, while productivity indicators were weak before the conflict.

The war severely disrupted oil production, which is crucial to the economy, undermined the government's ability to support the population by providing essential services, and affected public employment.

Many civil servants have been paid only partially or not regularly.

- A glimmer of hope

The report's in-depth political economy analysis and innovative data analytics suggest that Yemen's de facto decentralization could help support its future growth, corroborating a perspective consistently voiced in informant interviews.

The report cited other reasons for guarded optimism about potential recoveries, such as the strong entrepreneurial spirit of the Yemeni people, including, notably, women, the proximity of the high-income adjacent markets of the Gulf states, and Yemen's economic potential for agricultural, agro-processing and light manufacturing production, and exports.

World Bank Country Manager for Yemen, Tania Meyer, said that peace must enable inclusive growth, foster sustainable development, and improve the living conditions for the people of Yemen.

Meyer cautioned: “We must remain clear-eyed about the realities on the ground – the hardships faced by the Yemeni people are immense," noting that "high inflation, poor job quality, and an unstable public sector persist as major hurdles."

Earlier, the World Bank announced that nearly 17 million Yemenis suffer from food insecurity because of the wars and deteriorating economic conditions.

It warned that hunger, food insecurity, and malnutrition were among the most pressing challenges, exacerbated by the protracted conflict in the country.

Last March, the World Bank approved a second additional financing of $207 million for the Emergency Social Protection Enhancement and COVID-19 Response Project (ESPECRP) in Yemen to address chronic food insecurity and malnutrition.

However, a month later, it announced that Yemen needed between $11.82 and $16 billion in 2023 and between $11 and $22 billion next year to rebuild the local economy.

Ahead of the World Bank report, the UN Office for the Coordination of Humanitarian Affairs (OCHA) allocated $18 million for the urgent needs of people affected by humanitarian crises in Yemen to prevent famine and address rising levels of food insecurity driven by conflict, economic shocks, and climate change.

The Office warned in its statement that the humanitarian crisis would affect 17.3 million people in 2023.

By the end of May 2023, the Yemen Humanitarian Response Plan (HRP) was only 23.5 percent funded. In February, the Response Plan seeking $4.34 billion to assist 17.9 million people was only 10.4 percent funded, forcing aid organizations to reduce or close critical assistance programs.

- Development is the solution

The report indicated that relief agencies in Yemen are facing a significant funding shortfall amidst increasing humanitarian needs, which endangers the life-saving response of millions of people.

The UN repeatedly cautioned about a lack of funding compared to the proposed plans to finance the humanitarian crisis in Yemen, considered the worst in modern times.

A previous donor conference fell far short of the needed humanitarian aid, as world leaders pledged less than $1.2 billion in February for the humanitarian response that requires more than $4.3 billion.

The advisor to the Yemeni Minister of Local Administration and Coordinator of the Relief Committee, Jamal Balfaqih, wondered if the international organization could conduct accurate statistics on the numbers of needy families and those threatened with starvation.

Balfagih told Asharq Al-Awsat that he doubts the UN can reach all regions.

He added that relief work and aid provision are based on predictions of the numbers of those targeted without actual statistics and surveys.

The official presented his point of view to provide practical solutions to save Yemeni families from famine by defining targeted areas and supporting families with an integrated program that links food with production.

He noted that food in exchange for production in agriculture, livestock trade, or other medium-sized income-generating projects are viable solutions.

Sudan's RSF Agrees with UN on Steps to Ease Aid Delivery

Sudanese farmers plow a field on the outskirts of Sudan's eastern city of Gedaref on July 18, 2024. (Photo by AFP)
Sudanese farmers plow a field on the outskirts of Sudan's eastern city of Gedaref on July 18, 2024. (Photo by AFP)

Sudan's RSF Agrees with UN on Steps to Ease Aid Delivery

Sudanese farmers plow a field on the outskirts of Sudan's eastern city of Gedaref on July 18, 2024. (Photo by AFP)
Sudanese farmers plow a field on the outskirts of Sudan's eastern city of Gedaref on July 18, 2024. (Photo by AFP)

Sudan's Rapid Support Forces agreed with the United Nations on some steps to ease aid delivery in areas under its control, a member of the RSF told Reuters on Thursday.

The Sudanese army has not reached any understandings on aid delivers with the RSF, he added. It is unclear if these steps could be implemented without the army's participation.

Meanwhile, a key supply route into Sudan's Darfur region, deemed at risk of famine by a global monitor, has been cut off due to heavy rains, a World Food Program official told Reuters on Thursday.
The UN agency has described Sudan as the world's biggest hunger crisis, with the western Darfur region most at risk as Sudan's 15-month civil war that has displaced millions and sparked ethnic violence grinds on.
WFP's Country Director Eddie Rowe said thousands of tons of aid are stranded at the Tina crossing on the Chad border, prompting the body to reopen talks with the army-aligned government to open an alternative, all-weather crossing further south called Adre.
"You have these huge rivers. As I speak now, our convoy, which is supposed to move over 2000 metric tons is stranded," he told Reuters from Port Sudan. Asked on the status of the talks that resumed this week, he said: "It's 50/50.”
WFP is now seeking clearances to move a large 70-truck convoy via a little-used, over 1000 kilometer route from Port Sudan to Darfur which Rowe said will involve crossing the battle lines of both the Sudan Armed Forces, the Rapid Support Forces and various militias.
He added that this mostly desert route has worked in the past but outside of the rainy season and that the last journey took weeks and was "fraught with a lot of challenges.”
In a separate interview, Mona Rishmawi, a member of the UN Fact-Finding Mission on Sudan, told Reuters that she had met Darfur refugees in Chad who told her stories of escaping with virtually no water and eating grass along the route. "There's no doubt that people are starving," she said.