Yemen is among the poorest countries in the world. What is the approach to poverty alleviation of the Social Fund for Development (SFD), which has been established by the government of Yemen? How successful has it been? This study for the World Bank outlines the extent of poverty in Yemen, examines the approach of SFD and concludes that the organisation is playing a vital role in alleviating Yemen’s social problems.
In Yemen, 42 percent of the 18 million population are estimated to be living in poverty. Children and women living in rural areas without access to education and health services rank highest among the vulnerable. Public expenditures in social sectors (education and health) are mildly pro-poor, but they do not adequately address the magnitude of rural-urban and gender gaps. Almost all social programs are urban-oriented and tend to benefit the better-off. SFD is a major tool being used by the government of Yemen to alleviate poverty. It was established in 1997, in the wake of a period of macroeconomic difficulties, to provide support for long-term development opportunities for the poor, and to encourage innovative and participatory approaches to delivering demand-driven social services.
The SFD’s approach to poverty reduction relies on several principal components.
- It focuses on community development projects for small-scale infrastructure works and delivery of basic social services. Project selection is transparent and based on efficient use of resources and sustainability.
- Intermediary organisations are to assist communities in implementing projects identified by those poor communities as priorities. SFD’s autonomy from the government bureaucracy has allowed it considerable flexibility.
- It includes microenterprise development through technical assistance, training, and access to credit.
- It focuses on capacity building to assist non-governmental organisations, local communities and the private sector in identifying, implementing, and operating SFD projects.
- Capacity building helps local associations and groups develop and execute projects; enhances the ability to execute sustainable microenterprise programs and provides technical assistance to small contractors and consulting firms.
- It also provides for nationwide poverty monitoring.
The first two years of the SFD were a period of intensive learning, which set the stage for a highly productive operation. The SFD has played, and is playing, a unique and critically important role in helping alleviate Yemen’s major social problems.
- Through its demand-driven approach, it has introduced new concepts concerning community participation, including ensuring the involvement of women.
- It has contributed much to improving access to priority social and economic infrastructure and micro-credit and used NGOs and other intermediaries to the maximum extent.
- In the process, it has helped build up the implementation capacity of the poor beneficiary communities, NGOs, contractors, and government agencies. With decentralisation, it will have to ensure the participation of local governments and councils.
- The SFD is also helping to build the capacities of these councils by supporting a number of capacity building activities.
- As long as the responsible line agencies are not able to meet their sector obligations and the SFD can do this efficiently and effectively, there is ample justification for maintaining this crucial organisation.
- The SFD will continue as a house of innovation and experimentation that transfers the models to other government agencies.
