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Sana’a needs urgent assistance to overcome its economic problems. Despite international donors failing to deliver on previous promises, there is some hope for the future.
April 12, 2010 4:34 by Clare Dunkley
Poverty and extremism
Meanwhile, in the most concrete signal of imminent financial help to emerge from the flurry of diplomacy, the I.M.F. announced on January 28 that it was to begin talks on budgetary assistance during the first quarter (possibly through an External Credit Facility) “to support the design and monitoring of a Yemeni strategy to reduce macroeconomic and structural imbalances.” The results of the Washington-based fund’s annual Article IV consultations, released earlier in the month, highlighted the challenges – estimating that the budget deficit widened to 8.6 percent of G.D.P. during 2009 from 3.4 percent in 2008 and that the current account deficit expanded to 6.2 percent from 4.1 percent of G.D.P. over the same period.
Addressing the delegates in London, Hisham Sharaf Abdullah, deputy minister for planning and international cooperation, was emphatic about the intrinsic link between poverty and extremism, and in demanding help in waging what was part of a global battle – not only against Al-Qaeda, but also (with the money being spent protecting ships in the Gulf of Aden) against the scourge of Somali pirates. “The international community should also take into consideration that Yemen is spending billions in fighting Al-Qaeda and piracy at the same time,” he said. “And because these two issues are global problems, Yemen needs generous support in its fight, and therefore we expect the aid to reflect the importance of these problems.”
He also called for cancellation of Yemen’s $5.6 billion external debt, the interest on which was absorbing hard currency and putting depreciation pressure on the riyal. Fortunately, after the U.S. and U.K.’s experiences in preinvasion Afghanistan and post-invasion Iraq, Sharaf Abdullah was preaching to the converted in linking lack of basic services and jobs to the growth of Islamic militancy. “Progress against violent extremists and progress toward a better future for the Yemeni people will depend upon fortifying development efforts,” Clinton told reporters after the meeting.
More direct demands were made of the G.C.C., to provide not only the already promised financial aid but also to open the six wealthy states’ job markets to Yemeni nationals. Youth unemployment in the country is estimated to be running at more than 50 percent and, while Gulf governments’ concerns about the productive use of aid may be justified, Sana’a’s exasperation is also understandable. The G.C.C. consistently extends token gestures of closer cooperation with Yemen as a theoretical prelude to eventual membership, while doing little of substance to share riches with its poorer neighbor or to integrate the latter’s economy into its economic structures.