Yemen seeks billions of dollars in aid to revive economy

SANAA // Yemen is banking on a lot of help from its friends to revive its economy that was devastated by 12-months of protests and violence that forced Ali Abdullah Saleh to step down as president.

In an interview this week, Mohammed Al Saadi, the country's planning and international cooperation minister, said that Yemen needs about US$3 billion to $5 billion (Dh11-18bn) in aid.

He said the government has drafted an emergency "salvage and revival" plan to improve the economy. It will be presented to the Friends of Yemen meeting in Riyadh on April 23.

The Friends of Yemen forum will include the United States, European Union countries and the Gulf Cooperation Council.

"There is good will and genuine promises by our brothers in the Gulf countries to support us. We have crossed the serious stage of failure but we are still at the red- line phase," Mr Al Saadi said.

He said the money would go towards the state budget, infrastructure projects and aid to help poor Yemenis buy food and fuel.

UN agencies warned in December that Yemen was on its way to becoming another Somalia. Nearly half - almost 11 million of Yemen's 24 million people - live below the poverty line of Dh7.34 a day, according to Islamic Relief, a UK-based NGO.

Mr Al Saadi said a GCC-organised donor conference will be held in late June or early July.

He said he and the finance minister would visit Riyadh on Tuesday in an effort to get the GCC to release $3bn of $5.5bn that was pledged to Yemen in 2006.

The money was withheld because of last year's violence and the longterm "inefficiency and inability of the former government", he said. Mr Al Saadi, who represents the government in talks with donors, said his government is trying to "mobilise funds not for the budget deficit but for a salvage operation bigger than the budget".

The government last week unveiled a draft budget for 2012 that projects a $2.6 billion deficit. It awaits approval in parliament.

The economy has showed small signs of improvement since Mr Saleh stepped down and Abdrabu Mansur Hadi was elected as interim president. The Yemeni rial has seen gains, trading at about 216 to the US dollar after falling to nearly 250 to the dollar in the past year.

Mr Al Saadi attributed the improvement to "the Gulf countries repeated statements that they would support Yemen generously which raised hopes of the people".

He also said that the decision of international agencies and embassies reopening has given a message that "Yemen is moving towards stability and Yemen is serious about change".

Oil production used to account for 60 per cent of government income. But with repeated damage to pipelines last year, output faltered, forcing Yemen to import crude oil and fuel or depend on Saudi donations.

Mr Al Saadi also expected that the oil pipeline would resume operating in the coming weeks.

"The government has got a positive response from the tribes to put an end to sabotage against the pipeline and we hope it will be fixed within weeks," he said.

malqadhi@thenational.ae