Yemen Socio-Economic Update, Issue 73 – June 2022 [EN/AR] – Yemen
Financing for development remains one of the major challenges facing all countries, especially developing and least developed countries, given the enormous challenge it poses to development plans and programs, especially in a context of lack of resources necessary to implement these plans and programs designed to achieve various economic objectives. and social, and to improve the standard of living of States. The growing financing gap in these countries makes them vulnerable and need the resources and savings of others.
Ever-expanding international relations between different countries, integration in resource mobilization and meeting funding needs to achieve higher levels of economic security for different peoples; amidst a shared sense of the international system represented by the various international institutions and global financing institutions towards social responsibility, as well as international partnership to achieve the Sustainable Development Goals; the United Nations system has adopted in its development and policy programs for developing and least developed countries, a set of strategies, technologies, tools, operations and means that are developed to support the establishment of national financing structures, in cooperation with the sustainable development organizations within the United Nations Group, with a view to overcoming obstacles to development, and to mobilizing resources, savings, local and international investments to fund sustainable development plans and programs.
The development process involves certain prerequisites, including the creation of an enabling environment to attract savings from others, mainly external savings, to ensure adequate collateral and a positive working environment. This may include sufficient public financial sources to meet its investment and production financing needs, while seeking new mechanisms that would ensure access to financing for sustainable development, which is a common goal sought by most countries. .
In Yemen, the development financing gap has widened significantly due to war and conflict, which is mainly attributed to cumulative GDP losses totaling approximately US$126 billion, according to UNDP estimates1. This is without counting the basic recovery and reconstruction needs estimated between 20 and 25 billion US dollars (World Bank estimates)2 for 12 sectors and 16 cities assessed. It should be emphasized, however, that these estimates are neither complete nor inclusive of the city, besides other indirect damages, including the disintegration of public institutions and the social fabric; which requires an in-depth assessment of the damage from late 2014 to the present, to arrive at more inclusive and accurate estimates of recovery and reconstruction needs.
Therefore, this version of the YSEU Bulletin complements issue (72) and is dedicated to highlighting key recovery and reconstruction priorities. Throughout this issue, we will discuss the most important aspects of development financing in Yemen, including during the war through the different stages, as well as the contexts and structure of absorption of foreign financing, areas of use, the main sources during the period 1990 – 2021, the challenges and problems that Yemen faces in accessing foreign aid on the one hand, and the problems that prevent the use of certain funding on the other hand . The document also provides policy proposals and actions that can be guided by improving the management of foreign aid and external financing, and putting them at the service of development objectives and mobilizing financing capacity, including the mobilization of various local resources, especially private sector savings through local and international development partnerships to advance the national development process.