Download 2nd Main Committee: Economic and Financial Topic: Improving

2nd Main Committee: Economic and Financial
Topic: Improving Fairness on the International Market to Facilitate Growth
Country: The Republic Of Yemen
Delegate: Monroe High School, Honey Rind
During the 1990s, Saudi Arabia cast out almost one million Yemeni Workers and both Saudi
Arabia and Kuwait relatively reduced economic back-up to Yemen. The 1994 civil war further
diminished Yemen`s economy. For the past 10 years Yemen, has relied heavily on aid from
multilateral agencies to uphold its economy. Yemen is counted in the lowest income countries in
the Middle East, and it is also confronted with a range of difficult economic and security issues.
The country has one of the highest malnourishment rates in the world, according to an estimated
23 million citizens who live below the poverty line.
Since the unification, the government has worked to integrate two relatively disparate
economic systems. In the year 1997, the International Monetary Fund (IMF) approved two
programs to increase Yemen`s credit significantly: the enhanced structural adjustment facility
(known as poverty reduction and growth facility, PRGF) and the extended funding facility
(EEF). Yemen`s government attempted to implement recommended reforms to reduce the civil
service payroll, eliminating diesel and other subsidies, lowering defense spending, and
introducing a general sales tax. However, limited progress led the IMF to suspend funding
between 1999 and 2001. Inflexible shocks, including the return in 1990 of approximately
850,000 Yemenis from the Gulf States, a subsequent major reduction of aid flows and internal
political disputes concluded in the 1994 civil war handicapped economic growth. The IMF
program included major financial and monetary reforms, including floating the currency,
reducing the budget deficit, and cutting subsidies. In August 2010, a new IMF program was
implemented under which Yemen received an extended credit facility worth approximately $370
million that would be disbursed over 3 years.
The country of Yemen is highly dependent on oil, which represents almost 70% of the
government`s income. The country registered an economic growth of around 8% in 2010, due to
the beginning of the activity of exporting gas. Growth estimates for 2011 are of 3.5%. Yemen
Officially belongs to the list of the Heavily Indebted Poor Countries (HIPC). FDI stocks
significantly increased between 2006-2009. Yemen lacks infrastructures and its advantages are
very limited due to the scarcity of natural resources and low productivity of its workforce.
Yemen also has more imports as compare to the exports. Due to the current political and
security environment in Yemen, the World Bank has suspended expenditure under the Yemen
portfolio effective July 28, 2011.
Yemen is a place where perpetual crisis always seemingly on the border of chaos. The
terrorist group Al-Qaeda in the Arabian Peninsula has established a base of operations in
Yemen`s vast ungoverned spaces and has launched attacks on the Yemeni government, Saudi
Arabia and the United states. Beyond these hard security challenges, the Yemeni economy is
collapsing and the country faces severe water shortages and an exploding population that is
already lacking adequate food supplies. The World Bank predicts output will fall to zero by
2017. The loss of oil revenue will be catastrophic in a country that already has more than 40
percent of its population living on less than two dollars a day. The story doesn`t end on the oil,
but water too is in increasingly short supply. Saudi Arabia has denied Yemen the monopoly of
the power and integrity of borders that are the basics of statehood, through payments that blur the
allegiances of Yemeni tribes and others.
The foreign relations of Yemen are the relationships and policies that Yemen maintains
with other countries. Yemen participates in the nonaligned movement. IMF, UN nations, World
Bank, US and other trade partners of Yemen always give a back-up hand to it but requires more
than funds; it requires more just and annual aid. They need help to improve their agriculture,
along with help improving the sanitation of pure drinking water. Yemen does not want to be a
target from the other countries and so called “monopolies of the power” on the supply of oil.
The economy of countries should be free as they can make more money in any way
possible. The people of Yemen are trying to work things out and make their country a better
place to live but a little support from other countries can help Yemenites save their country.
Yemenites are protesting against unemployment, economic conditions and corruption. They are
protesting to have sound sleep one night while protesting against terrorism. They are protesting
because somewhere, somehow they also want to see their country as a peaceful place to live.
The only way we can improve fairness on the international market to facilitate growth is by
making a just and executive decision. All countries should exercise the fundamental right of
having equal rights to be prosperous.