The Jury is Still Out on Foreign Aid to Yemen

There’s good and bad news for Yemen on whether donors are likely to provide the needed financial assistance to keep its economy afloat and help it recover from the political crisis it is suffering.

The power transfer deal that Yemeni President Ali Abdullah Saleh agreed to in November could encourage donors to dole out funds in support of a new government in the country, experts have noted, according to Reuters.

But continuing clashes between Saleh’s supporters and opponents threaten the successful implementation of the deal and with it, the prospect of robust foreign assistance, the news agency adds.

Yemen is suffering a major budget crunch amid violent clashes between groups who want Saleh out and those who wish to see him remain in power. Tribal clashes and militant activity outside Yemen’s capital city also contribute to the problem.

Experts said Yemen’s prospects of recovering from this political and economic crisis on its own are dim.

“I believe that without third-party support from outside, Yemen can’t survive,” said Mohamed al-Maytami, an economics professor at Sanaa University, according to Reuters.

But there’s hope, experts are quick to note, citing some donors’ pledges to provide assistance once the political crisis is resolved and the country commits to reforms. Saleh’s agreement to step down and the successful conduct of elections in February are the crucial first steps, the experts said.

Which donors are likely to come to Yemen’s aid? Experts listed the International Monetary Fund and rich Gulf states such as Saudi Arabia.

At least one expert, however, has warned donors on the consequences of being in this ‘wait-and-see mode’ before deciding to send assistance to Yemen.

“The current ‘wait-and-see’ approach to the situation…will hamper a swift and effective response to the economic crisis, and is likely to exacerbate the human cost of the crisis,” Peter Salisbury of the U.K.-based Chattam House think tank has argued.

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About the author

  • Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.