The Government of Yemen is clearly committed to poverty reduction and has prepared a national poverty reduction strategy (PRSP) that will be presented to the World Bank and IMF Boards in July 2002. This strategy is based on the framework of the Second Five-Year Plan (SFYP 2001-2005) and aims to reach the Millennium Development Goals by 2015. This report is a contribution to such a strategy. It is based mainly on the 1998 Household Budget Survey (HBS) and supplemented by the 1999 National Poverty Phenomenon Survey (NPS). The report analyses the nature and the many dimensions of poverty in Yemen; it discusses the role of past and current public policies on poverty; and it provides recommendations for policy interventions to improve the living standards of the poor. Due to the lack of comparable household survey data, the report does not measure the poverty trend during the 1990s and does not assess the impact of the recent economic performance on poverty. With 42 percent of the population estimated to be living in poverty, Yemen is among the poorest
countries in the world. As a result of recent efforts, social indicators have gradually improved, but they still rank with some Sub-Saharan African and South Asian countries. During the second half of the 1990s, economic growth, mainly driven by the agriculture and oil sectors, has been stronger and significant positive per capita growth, including rapid growth in agriculture was achieved that would have helped to reduce poverty. Based on the analysis of the household budget survey, the main findings of this report are: - Poverty is widespread nationally, pervasive in rural areas, and concentrated in 4 govemorates.
- Factors that affect the risk of being poor in Yemen are (i) lack of education, (ii) large household size with a large number of children, (iii) geographical location, and (iv). lack of worker remittances from abroad.
- Children and women living in rural areas without access to education and health services rank
highest among the vulnerable. - Public expenditures in social sectors (education and health) are mildly pro-poor, but they do not address the magnitude of rural-urban and gender gaps. Almost all social programs are urban biased and tend to benefit the better-off.
- Benefit-incidence analysis of the safety nets shows that (i) their coverage is extremely limited, (ii) they fail to address short-term downturns and vulnerability for the able-bodied poor, and (iii) they fail to reach the poorest and most needy, especially children.
- Programs under the second phase of the Social Development Fund (SFD) are pro-poor, but the inter-governorate distribution of both Public Work Programs (PWP) and Social Welfare Fund (SWF) allocations show no signs of pro-poor targeting.
To reduce poverty, Yemen faces the difficult challenge of generating sustained broad based growth and ensuring that the benefits of growth are distributed across all income groups, particularly in rural areas. To meet this objective, in the context of declining oil revenues, the Government needs to (i) pursue structural and institutional reforms and introduce changes in the governance structure; (ii) ensure that the pattern of growth for 2001-2005 is pro-poor and does not widen the gap between the poor in urban and rural areas; (iii) improve the effectiveness, provision and targeting of public investment in the social sectors; and (iv) increase public expenditures in the social sectors (particularly health and social safety nets). Back to Poverty Assessment Summaries — Middle East and North Africa |
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