By IPS Correspondents
SANA'A, Dec 28 2006 (IPS)

Concerns have risen about the economic progress of Yemen in the New Year despite the aid pledged by donors at a conference in London last month.

Opposition leaders and critics say the money pledged will not deliver results unless the government puts the right policies in place.

“The problem is not the regional and international commitments to help Yemen, but Yemen’s commitment to properly use such aid,” Dr. Ali al-Wafi, head of the economic section of the opposition Islah party told IPS. “The government is searching for more billions of dollars, but we all know that it has wasted a lot of money in the last few years due to corruption.”

Tackling corruption is fundamental for the development of the country, analysts say. “To encourage others to fulfill their promises to us, we have first to accomplish our commitment to fighting corruption, enforcing laws and reforming government institutions,” economist Fuaz al-Salahi told IPS. “The government is the first responsible for the economic decline.”

Four out of ten people in this country of 21 million, situated south of Saudi Arabia, survive on less than two dollars a day. Yemen is ranked 151st out of 177 countries in the United Nations human development index. It is near the bottom of a list of countries ranked by Transparency International for perceived corruption.

The opposition was not involved in meetings with donors, but the call by donors for the government to tackle corruption is a victory for the opposition, many leaders say.

“We and donors agree there is corruption that should be tackled,” spokesman for the Joint Meeting Parties, an opposition coalition, told IPS. “Donors ask the government for real reforms and more credibility, and this is exactly our guideline to save the country.”

But few have faith that the government will move effectively to counter corruption. “The very people responsible for corruption today are being made responsible for correction tomorrow,” says government employee Hussein al-Sameei.

“We need consciousness more than money,” says his colleague Ibrahim al-Raimi. “Why have the previous reform attempts failed?” said Zahra Mahmoud, who has a poultry business. “Why should Yemeni people be patient while officials continue building villas and buying cars?”

The government says Yemen needs 48 billion dollars to meet the Millennium Development Goals, a set of eight goals agreed in 2000 to promote health and education and to reduce poverty.

The Yemeni third five-year plan (2006-2010) says the country needs 11 billion dollars to close the minimum gap to pull itself out of poverty.

The government says also it hopes to increase the rate of economic growth from 4.1 percent to 7.1 percent over the coming seven years. President Ali Abdallah Saleh won a seven-year term in elections this year.

The London conference brought pledges of 4.7 billion dollars, considerably less than the government had hoped for. That included both grants and loans.

At an earlier meeting of Gulf states, Yemen was promised 5.8 billion dollars, again less than expected, and with conditions that the money would be used efficiently and with transparency.

President Saleh won only limited support at donors meetings for his plea for more funds on the ground that “poverty is pasture of terrorism.”

Yemen won a gift of a billion dollars from Saudi Arabia, and another 500 million dollars from the United Arab Emirates. Qatar offered 500 million dollars, a part of it is a loan.

The Arab Fund for Development based in Kuwait announced it would give Yemen 700 million dollars as loan. The World Bank said it would grant Yemen 48 million on dollars conditional on reforms.

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