‘Friends of Yemen’ pledge $6.4bn for reconstruction

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Anti-government protesters raise bread as a symbol of poverty during a protest that demanded better economic conditions in Sanaa, Yemen. Photo -Muhammed Muheisen/AP Photo

Yemen said on Wednesday pledges worth $6.4 billion made by global donors is roughly half of what the country needs to weather a rough political transition triggered by Arab Spring protests.

World Bank announced it is increasing the aid from $4 billion pledged to the impoverished state at a meeting of the Friends of Yemen in May. Saudi Arabia had solely promised $3.25 billion of the $4 billion raised in May.

“The total number is $6.396 billion, to fund the short term and portions of the long term,” Inger Andersen, the World Bank’s vice president for the Middle East and North Africa, said at the end of the first day of the donors meeting in the Saudi capital.

She added that the World Bank gave a grant of $400 million on top of existing $700 million, of which $200 million have been dispersed.

“The national unity government needs $11.9 billion in the short term,” Planning and International Cooperation Minister Mohammad al-Saadi told delegates.

“The government urgently needs to spend $4.7 billion on serious humanitarian needs by February,” he added.

In addition to Saudi Arabia and the World Bank, the United States has pledged a total of $846 million, the Arab Development Fund $510 million and the Arab Monetary Fund $380 million. The EU has pledged $214 million, while Britain promised $311 million, Germany $158 million and the Netherlands $100 million.

Saudi Finance Minister Ibrahim al-Assaf opened the Tuesday meeting with a call for more aid to the kingdom’s impoverished southern neighbor.

“Yemen is facing many economic problems … The kingdom hopes to see more contributions,” he said.

Assaf and Saadi Tuesday signed three agreements detailing the Saudi aid package offered in May, which amounts to a $1 billion deposit in Yemen’s central bank, a $1.75 billion grant, and $500 million to fund and guarantee Saudi exports to Yemen.

Wael Zakout, the World Bank’s country manager for Yemen, had said Saturday on the bank’s website that his organization hoped to raise $6 billion at the latest donor meeting to support the recovery plan put together by the transitional government in Sanaa.

“We hope to raise $6 billion during the donor meeting to cover the transition period lasting until the middle of 2014,” Zakout said.

“We will hold another donor conference after 2014 to raise the rest of the needed funds.”

Rajiv Shah, administrator of the U.S. development fund USAID, said his country was providing $345 million in aid to Yemen this year, going to “security, humanitarian and development assistance.”

“Over half of our support is for political transition, humanitarian assistance and development. The majority of the amount, $117 million, is for humanitarian assistance,” he said.

The two-day Riyadh meeting aims to address several issues, including reconstruction, humanitarian needs and ways to strengthen security and stability in Yemen, Saadi told reporters in Sanaa ahead of the conference.

It will also cover political dialogue, preparations for elections and basic infrastructure needs, he said, adding some states would pledge aid in Riyadh and other await a Friends of Yemen meeting in New York next month.

Yemen is undergoing a political transition after a yearlong uprising unseated President Ali Abdullah Saleh and left the economy of the Arabian peninsula’s poorest country in shambles.

But so far only 43% of $455 million earlier asked for by the UN and other organisations has been received for humanitarian aid for Yemen.

The Friends of Yemen forum was set up at an international conference in London in January 2010 to help Sanaa combat a resurgent Al-Qaeda threat in the ancestral homeland of its slain chief Osama bin Laden and other security challenges.

The IMF says the 2011 political crisis has taken a serious toll on the Yemeni economy, which it said contracted by 10.5%, while inflation had soared to 17.6%.

Aid agencies say nearly half of Yemen’s 10 million population doesn’t have enough food to eat, and one in three children is severely malnourished.

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