SANA’A, Oct 26 (Saba) – The Executive Bureau for the Acceleration of Aid Absorption has said that the challenging political and security environment in Yemen still hinders the progress needed to establish macroeconomic stability.
"The challenging political and security environment in Yemen still hinders the progress needed to instil macroeconomic stability and to position the economy on a track of sustained and inclusive growth," the Executive Bureau said in its 3rd Status Report about the Mutual Accountability Framework (Pledges and Reforms).
"Recent sabotage activities targeting power and oil facilities reduced hydrocarbon production, resulting in lower oil and gas revenues and exports. Fiscal pressures have amplified, international reserves declined and financing needs have become very large," it said.
"Furthermore, the political and security stability has been undermined by various factors such as the proliferation of poverty and unemployment, internal conflicts and increased activity of Al-Qaeda," the report said.
It said that despite all of that, "a notable progress was made during Q3 of 2014 with regards to the MAF shortlisted policy reforms and the acceleration of aid absorption. The strong political support by MoPIC Minister and the effective cooperation of MoPIC officials with EB’s team and management have been always the grounds for such achievement."
The bureau highlighted the Q3 progress included achieving important outcomes that signify key milestones in MAF policy reforms and aid absorption. One of the major milestones was the GoY-IMF program.
The government of Yemen has reached an agreement with the IMF on a 552.9 million US$ loan within a 3-year program, which was approved by the IMF Board in its meeting on the 2nd of September 2014.
This program intends to mitigate negative macroeconomic impacts, ensure an appropriate mix of fiscal, monetary, exchange rate policies; and implement structural policies to create the conditions for sustained high and inclusive growth over the medium – long run.
The report also mentioned a number of key decisions that have been taken by the Yemeni government to accelerate energy sector reforms.
Those decisions included the establishment of a ministerial committee to develop an Energy Sector’s Strategy, the ban on building any new power stations that uses Diesel as a primary fuel, the ban on expanding existing diesel-fueled power stations and the review of all rental power contracts with the purpose of unifying prices based on the lowest current price (2.7 cents/kwh). EB has been working actively with MoEE to move forward with the energy sectors reforms by developing a short-term and detailed action plan.
On the Biometric Fingerprint System, the main objective is to remove double dippers and ghost workers from the Yemeni civil service, military and security. During Q2 and Q3 of 2014, the EB conducted a series of meetings and consultations with government ministries and donors to ensure their understanding of this priority reform and to seek their commitments to fund the proposed project.
KM
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