EU-OECD Project on Promoting Economic Resilience in Yemen

The EU-OECD project “Promoting Economic Resilience in Yemen” is financed by the European Union and implemented by the Organisation for Economic Co-operation and Development (OECD). Starting in September 2020 and with a total duration of three years, it aims to strengthen the socio-economic resilience of Yemen in order to create viable conditions for economic growth and private sector development. The project is implemented in partnership with the Yemeni Ministry of Planning and International Cooperation.

The project began by assessing the multifaceted challenges that Yemen is facing, both as a result of the current conflict and of existing structural difficulties. This cross-sectoral analysis rested on extensive consultations with Yemeni public institutions, private sector representatives and civil society, but also with bilateral and international development partner sand academics.

Priority actions, trainings and recommendations were designed on the basis of this needs assessment along the following areas:

• Supporting key economic institutions:
  • Economic governance
  • Banking supervision and financial & monetary policy
  • Financial Literacy and Financial Inclusion
  • Tax Policy
  • Infrastructure financing
  • Anti-corruption, Anti-money Laundering and Public Sector Integrity
  • Statistical systems
• Private sector development:
  • o Public Advocacy for Private Sector Development
  • o Women Economic Empowerment
• Donor Coordination and Financing for Development

Enabling key central level economic institutions of the Internationally Recognised Government, such as the Central Bank of Yemen and the Ministry of Finance, to function effectively and coherently to lead economic recovery and create the conditions for private sector development is a precondition for economic recovery and macro-economic stability. Strengthening capacities in tax administration and revenue generation is particularly significant to finance public deficits, critical public goods and services, and pay salaries in Yemen. For this end, improving capacity for economic data collection and analysis, making the financial sector more resilient and supporting public and private stakeholders in fighting corruption are key priorities.

The need for economic reconstruction also requires a resilient private sector, focusing on job creation and inclusive employment with emphasis on the youth and women. To achieve this, supporting to enhance public advocacy and managerial skills by private sector institutions is necessary. Therefore, OECD’s support focuses on building the capacity of key business associations to advocate for their priorities and engage in a constructive dialogue with public authorities. The action also includes methodological analysis and recommendations on what is required in Yemen to develop effective public-private dialogue in priority areas. Enabling the private sector to become more resilient can manifest in communities becoming better able to deal with risks and shocks by increasing economic self-reliance.

At last, facilitating donor coordination and policy coherence in the economic sector is also of critical importance for a resilient economy in Yemen. There is currently no agreed-upon national development plan nor financing strategy around which international donors can align. This severely impedes the capacity to efficiently move away from an exclusively humanitarian response and incorporate a development strategy agreed upon at a national and international level, which is an important element to support the transition from fragility to recovery. Advancing coordination at a strategic level can also open the collective dialogue to what is realistically achievable in the current context.

More info: oe.cd/yemen