Situation and cooperation

The domestic situation in Yemen is critical. The state has no control over some parts of the country, and tribal disputes are con­stantly erupting. The ceasefire agreed following the insurgencies by the so-called "Houthi Rebels" in the north­west of the country is shaky. The conflict has been flaring up again and again since 2004, and has led to 320,000 people being displaced. Many of them cannot return to their home villages because of the threat of blood feuds.

The tensions be­tween the south and the north of the country are growing once more. In the south, there have been sometimes violent dem­on­stra­tions because the population there feels disadvantaged at the hands of the dominant northern part of the country.

It is young people, in particular, who feel frustration at the lack of development opportunities, high rates of unemployment and little or no career prospects. Almost 70 per cent of the population is under the age of 25. There is a growing danger that young men will be susceptible to recruitment by Islamist terrorist groups, which are becoming increasingly active in Yemen.

On the United Nations 2010 Human Development Index (HDI), Yemen is ranked 133rd out of 169 states. Around 50 per cent of Yemen’s population live below the poverty line. Over 30 per cent of the adult population are classed as undernourished, and child mortality is high. As Yemen’s economic growth is not keeping pace with its population growth, the number of poor in the country is likely to continue to grow.

The health and education systems display serious shortcomings. The illiteracy rate is around 40 per cent, even 70 per cent amongst women, and it is being predicted that Yemen will not reach the Millennium Development Goals (MDGs) by 2015. There is growing dissatisfaction among the population regarding both low standards of living and the government.

Formally, Yemen has a multi-party democracy – the only country on the Arabian Pen­in­su­la to do so. In fact, how­ever, an autocratic regime became es­tab­lished at the end of the civil war in 1994. Power is exercised mostly informally, on the basis of personal and traditional ties. The result of this manner of politics is a lack of transparency, corruption and the absence of rule of law. The corruption index for 2010 published by the non-govern­mental organisation Transparency International ranks Yemen 146th out of the 178 countries assessed. Civil society is underdeveloped and not strong enough to influence or control government actions effectively.

Following a political wrangle over electoral reform plans, the parliamentary elections planned for 2009 were delayed for two years. Due to the current political situation, it is uncertain when the parliamentary elections rescheduled to be held April 2011 will actually take place.

Human rights

The human rights situation is poor. Yemen has ratified almost all the international human rights instruments but there are shortcomings in their implementation. Women and girls are subject to severe discrimination, and their position in political or economic life is very poor. Early marriage for young girls is common in all parts of the country, female genital mutilation is widespread, although the numbers affected vary from region to region; in some regions, however, it is more than 80 per cent of women. Bills banning early marriage and genital mutilation have failed to get through Parliament on numerous occasions.

Freedom of the press and freedom of opinion have recently been curtailed even further. A new law governing NGOs will enable the Yemeni government to regulate and obstruct the work of non-governmental organisations. Human rights are also frequent­ly violated in the exercise of tribal justice, which is widespread.

Water shortages and agriculture

The lack of water is a huge issue: every year, Yemen uses almost one and a half times the volume of water that can be replaced naturally. It has one of the fastest sinking groundwater levels in the world. Existing resources, often fossil water, are being exploited in a completely uncontrolled fashion. About 90 per cent of the extracted groundwater is used for agriculture. A large share of that is used for the cultivation of the drug khat. The leaves of the khat plant are traditionally chewed like chewing tobacco and have a slightly narcotic effect. The cultivation of khat is increasingly forcing out coffee, wheat and millet production, obliging Yemen to import about 75 per cent of its basic foodstuffs. That is why the global food crisis of 2008 hit Yemen particularly hard. The German government gave Yemen 16 million euros to cope with the crisis.

Yemen's economy

Yemen’s policies are neither geared to sus­tain­able economic develop­ment nor sufficiently pro-develop­ment and pro-poor in their orientation. Accor­ding to figures published by the country’s press, some 40 per cent of the national budget is spent on security. Huge diesel and petrol subsidies eat up another large slice of the budget. In budget terms, this leaves very little scope for spending on urgently needed development projects.

In Yemen, the economy is dominated by the oil and natural gas sector, which accounts for about 90 per cent of export revenues and about 75 per cent of state income. However, Yemen’s oil and gas reserves are almost totally exhausted. The International Monetary Fund (IMF) predicts that in as little as ten years there will be no more extraction taking place in Yemen. The country urgently needs to diversify its economy.

The private sector is developing very slowly. There are only a few efficient businesses capable of exporting, but a large number of small and micro enterprises. The lack of legal certainty, corrup­tion, poor infrastructure, bureaucratic red tape, an under­developed banking system and poorly trained Yemeni workers all discourage further investment in the country.

For a long time, tourism was one of Yemen’s most important sources of income after oil but, because of the security situation, income from tourism is subject to major fluctuations. Yemen has been hit repeatedly by terrorist attacks – some directed at groups of tourists – and by kidnappings of foreigners, perpe­tra­ted by local tribes with the aim of extracting concessions from the government.

In response to pressure from the donor community, the Third Five-Year Socio-Economic Development Plan 2006–2010 was passed by the Yemeni parliament in 2006. However, the government largely failed to reach the plan’s ambitious goals for economic development and poverty reduction. The fourth five-year plan (for 2011-2015) is currently being drawn up. In August 2010, the IMF launched a three-year stabilisation programme. As the IMF’s support is dependent on a reduction in the country’s budget deficit, Yemen’s government has announced the introduction of a value-added tax and has started to cut back on energy subsidies.

In July 2000, Yemen applied to join the World Trade Organization (WTO). The government is receiving support from a multi-year EU programme to help it make the adjustments to its economic and legal structures that it needs to make to join. It also aims to join the Gulf Cooperation Council (GCC).

Constructive partnership

Yemen and Germany have been working together in the field of development policy for 40 years. Topics such as human rights, democratisation and security are discussed openly. Cooperation is geared to the shared goal of reducing poverty in Yemen. Yemen was the first country in the Arab world to draw up a Poverty Reduction Strategy Paper (PRSP), the goals of which Germany supports.

In view of the tricky security situation in Yemen, all of Germany’s development cooperation projects there are designed to be "conflict-sensitive", thereby helping to minimise potential conflicts. Good governance is another focus of German-Yemeni coopera­tion, with the emphasis on combating corruption.

At a conference in London in January 2010, an international programme of support for Yemen was launched. Representatives of 22 countries established the "Friends of Yemen" group, to which Germany also belongs. The aim of the group is to support the Yemeni government in its efforts to implement domestic reforms in areas such as governance, the economy and the judiciary.

Priority areas of German cooperation with Yemen

Yemen receives comparatively little support from western industrialised nations. Major multilateral donors are the World Bank and the IMF. Germany is one of Yemen’s most important bilateral donors. The most recent government negotiations between Germany and Yemen took place in March 2009, when commitments of 79 million euros were made for 2009 and 2010, of which 26 million euros were pledged for Technical Cooperation and 53 million for Financial Cooperation.

Development cooperation between Yemen and Germany focuses on the following priority areas:

• Drinking water supply and sanitation

• Basic education

There are also activities in the fields of sustainable economic development, health, combating corruption and reforming the public sector.

Drinking water supply and sanitation

Yemen is one of the most water-poor countries in the world. Only 150 cubic metres of water is available from renewable sources per capita, putting the country well below the water-poverty line, which is set at 1,000 cubic metres of available water per capita. The rapidly expanding population and the increased use of irrigation in agriculture have pushed demand steadily upwards. To meet this growing demand, the country is now tapping fossil groundwater reserves, which cannot be replenished. In some regions, the groundwater level has fallen dramatically, leading to shortages in supply. Within the next twenty years, the water supply system to the area surrounding the capital Sana’a risks total collapse.

Alongside the World Bank, Germany is the most important donor in Yemen’s water sector. The aim of development measures in this area is to offer the urban population affordable water supplies and sanitation, whilst at the same time protecting groundwater reserves and preventing their over-exploitation. Reform processes are being launched that will bring about the decentralisation and more commercial operation of municipal water utilities, and help to develop functioning institutions. Several million people are already benefiting from the water projects that have been supported so far. For example, in January 2011, a new wastewater treatment plant started operating in Aden. The BMZ is providing support for the construction and extension of the wastewater network there.

The overarching goal of Germany’s activities is to help create an integrated water resource management system in Yemen that has been coordinated with other international donors. However, to achieve this, the capacity and performance capabilities of the authorities and agencies involved need to be improved and the private sector given a stronger role in water management.

Basic education

Yemen’s primary education system is relatively weak. Although in recent years many more children have gained access to primary schooling, Yemen’s school enrolment rate of around 70 per cent is still one of the lowest in the world.

Yemeni-German development cooperation includes measures to help improve the education system. To this end, the Ministry of Education is receiving support for its reform efforts. Measures receiving support range from the building of new schools and the training of teachers to the updating of teaching materials and the introduction of administrative reforms. The education of girls is a particular focus, and one of the measures employed to do this is the training of women teachers in rural areas.

There are plans to extend German involvement in the education sector to include secondary and vocational education in order to provide children leaving primary education with further educational and vocational opportunities.

Sustainable economic development

The economic development of Yemen is a basic precondition for successful poverty reduction and for job creation. Most of Yemen’s businesses fall within the category of small and micro enterprises – a category which, so far, has largely been neglec­ted in terms of economic policy. A microfinance institution is to be established, which will provide loans to small, medium and micro businesses and thus targeted support for this sector of the economy. Furthermore, within its Technical Cooperation activities, Germany is working to help bring about greater collaboration between the vocational education system and the private sector. In order to improve the performance of Yemen’s private enter­prises and to facilitate their contacts with foreign companies, Germany intends to support Public Private Partnerships (PPPs).

Since women have played practically no part at all in the private sector to date, the empowerment of women is another important objective of Yemeni-German cooperation.

Health

Compared with the rest of the Arab region and the world, health provision for people in Yemen is very poor. In rural areas in particular, the country lacks medical facilities, medical personnel are not adequately qualified and supplies of medicines are unreliable. In addition there are far too few women working in the health sector, so that it is not possible to provide an adequate level of medical care for the female population in this strict Islamic country.

The focus of German involvement in the health sector is on reproductive health and family planning. This is intended to improve women’s access to health services and lessen the risks connected with pregnancy, birth, HIV and AIDS. Special attention is being given to the controversial practice of marrying off young girls as child brides and to ways of putting an end to genital mutilation.

With these health sector projects, Germany is also playing an important role in reducing population growth, for Yemen will not be able to resolve its economic and environmental problems unless the country’s birth rate is reduced.

Anti-corruption efforts and public-sector reform

Germany is helping Yemen to reform its public sector and tackle corruption. The Yemeni government has decided to join the Extractive Industries Transparency Initiative (EITI). In September 2007, Yemen became a candidate. Whether Yemen fulfils all the regulations for EITI membership was to be ascertained in March 2010, however the country requested a deferral. The EITI pro­cess helps ensure that money generated from the extraction of oil, gas and other raw materials reaches the national budget via transparent channels and that it is being used to reduce poverty.

The government has also made progress on implementing the anti-corruption law and establishing an independent anti-corruption authority.