International donors on Tuesday (September 4th) pledged a cumulative $6.4 billion at a conference in Riyadh to help Yemen implement its transitional programme for development and stability.
Saudi Arabia's pledge -- previously announced at the Friends of Yemen conference in May -- made up around half that amount, while other donors postponed announcing their pledges until the next Friends of Yemen meeting, scheduled to be held in New York on September 27th.
Following the Riyadh conference, Yemeni Prime Minister Mohammed Salem Basindwa said in a press statement that he is completely satisfied with the results of the conference and very optimistic about future pledges from donors in New York.
Yemen is counting heavily on those pledges, he said.
He also thanked Saudi Arabia for helping Yemen meet the challenges it faces in security, humanitarian and economic development.
According to Basindwa, restoring security and stability will pave the way for investors, particularly from the Gulf, to return to Yemen, thus helping alleviate unemployment.
He pledged to fight corruption to allow these investments to grow in a safe and stable environment, and reiterated his government's commitment to developing transparency mechanisms and improving Yemen's capacity to utilise grants, aid and loans to bring about change and development in the country.
Saudi Finance Minister Ibrahim al-Assaf opened the two-day conference on Tuesday.
Saudi Arabia pledged $3.25 billion to Yemen during the Friends of Yemen meeting in May, he said, consisting of a $1 billion deposit in Yemen's Central Bank, a $1.75 billion grant to finance development projects and $500 million to finance and guarantee Saudi exports to Yemen.
Yemen and Saudi Arabia signed three financing agreements detailing this aid package on the side-lines of the Riyadh conference, the official Yemeni news agency Saba reported.
In the first agreement, Saudi Arabia will transfer $1 billion to Yemen's Central Bank before the end of the week, a move that aims to support the government's efforts to maintain stable currency and exchange rates.
The second agreement calls on the Saudi Fund for Development to provide Yemen with $20 million to help finance the construction of a wind power plant with a production capacity of 60 megawatts.
The third calls on the Fund to give Yemen $6 million in support of the government's efforts to combat measles.
Dr. Mohammed al-Saadi, Yemen's minister of planning and international co-operation, praised the results of the donor conference.
He said he hopes that the Friends of Yemen meeting in New York will complement this with the announcement of pledges from the rest of the donors.
"Yemen relies heavily on donor support to implement a successful peaceful solution to its crisis, given that economic conditions are a major cause of this crisis," al-Saadi told Al-Shorfa before he left Sanaa for Riyadh to participate in the conference.
Al-Saadi said Yemen prepared three working papers for the conference. The first is a phased plan for 2012 -2013 that includes a number of political, security, economic and social priorities the government will implement during the transition phase.
The second working paper details planned projects and their ability to absorb the aid, and the third is a partnership document between Yemen and the donors.
"We have identified Yemen's funding gap along two stages: The first is urgent and covers security, stability and humanitarian needs, and is estimated at $4.7 billion, and the second addresses the economy and economic stability, and is estimated at $7 billion," al-Saadi said.
Dr. Mutahar al-Abbasi, deputy minister of planning and international co-operation, told Al-Shorfa that some countries and organisations postponed their pledge announcements because they have not yet completed the procedures necessary to announce them.
"The pledge ceiling in Riyadh was good, but pledges from other countries, to be announced at the Friends of Yemen meeting, might bridge the gap in finances, estimated at nearly $11 billion," al-Abbasi said.
Dr. Taha al-Faseel, an economics professor at Sanaa University, described the results of the conference as "positive".
He said its outcome will support security and political stability, which will have a positive impact on development and the flow of new investment into the country.
There is a "need for donors to transfer their pledges fast so the Yemeni government can address the urgent humanitarian crisis, expedite the peaceful transfer of power and begin national dialogue", al-Faseel said.
"The results of the conference will provide a major boost to the government in the transitional stage [in its efforts] to restore security and economic and political stability," Mustafa Nasr, head of the Studies and Economic Media Centre, told Al-Shorfa.
"The issue is not whether donors will make pledges or their amount, but rather in whether Yemen can access these funds to utilise them as soon as possible," he said.
Confronting political and security challenges will have a positive impact on the economic front, contributing to reviving the economy and attracting investment, Nasr said.
He called on the Yemeni government to deal responsibly with these commitments and prove its efficiency in utilising them according to a clear and transparent strategy.
This way, "pledges do not remain ink on paper, as happened after the London conference in 2006, which raised more than $5 billion, only a quarter of which was spent because government agencies were incapable of utilising it", Nasr said.