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| Identifier | Created | Classification | Origin |
|---|---|---|---|
| 06SANAA2143 | 2006-07-30 06:46:00 | UNCLASSIFIED | Embassy Sanaa |
Cable title:
MEPI SUPPORT FOR IFC CONTRIBUTES TO REFORM IN YEMEN
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1. SUMMARY: After establishing its offices in Yemen over a year ago, the International Finance Corporation (IFC) is now addressing issues that are critical to reforms required by the Millennium Challenge Corporation (MCC) and the World Bank. At the request of the ROYG, the IFC will undertake an initiative to reduce the number of days to establish a business in Yemen. They have also undertaken other programs, partially funded by the Middle East Partnership Agreement (MEPI), for lease financing, lending to small and medium-sized enterprises, and gender-specific business training. END SUMMARY. -------------------------- IFC Helps Get Businesses Up and Running -------------------------- 2. On July 18, Econoff met Saad Sabrah, Yemen Country Officer for the IFC, a recipient of MEPI funding through the Private Enterprise Partnership Middle East and North Africa (PEP-MENA). Sabrah explained that he was recently approached by the Ministry of Planning and International Cooperation (MOPIC) to help the ROYG design an initiative to reduce the number of days and the cost of opening a new business. This objective has achieved special prominence in the ROYG's reform agenda due to its inclusion as a key indicator for both the MCC and the World Bank. (NOTE: The IFC is a subsidiary organization of the World Bank. END NOTE.) 3. In the World Bank's 2006 Doing Business Report, Yemen ranked 90th among 155 countries, and 151st in the catagory measuring ease of starting a business. In reponse to MOPIC's request, the IFC will launch a Business Start-up Simplification Project, to reengineer the registration process and create a "one-stop shop" for new businesses. The project is expected to last 18 months and cost USD 800,000, half of which will be funded by PEP-MENA and the other half from the Royal Netherlands Embassy. Unfortunately, the initiative's results will not be reflected in the Bank's report until 2008, but in the interim MOPIC intends to highlight the inauguration of the IFC program as evidence of reform. 4. Sabrah noted that there are regionally specific issues as well when it comes to business start-ups. Only 73 of the 1700 total official businesses registered over the the past year were located in Aden, Yemen's second largest city. According to the Sabrah, this is largely due to land disputes, a situation the IFC hopes to improve by partnering with ongoing World Bank programs in the area. -------------------------- Getting Finance to the People -------------------------- 5. Sabrah has spearheaded several initiatives in the financial sector. Over the past six months, the IFC trained and advised the ROYG on a financial leasing law, and expects a draft to be submitted to Parliament by the end of July. Sabrah intends to introduce technical assistance to leading Yemeni banks to support lending to small and medium-sized enterprises, and may invest between USD 5-7 million. The IFC is also shopping for donors to support a policy reform project in Yemen's mining sector. -------------------------- Supporting Women in Business -------------------------- 6. Econoff attended a separate meeting with Shaheen Sidi Mohamed, Program Manager for Gender Entrepreneurship Markets at the PEP-MENA center in Cairo. The IFC recently completed a survey on gender and business in Yemen, which identified business management training as a primary concern. In response, the IFC is introducing a gender-specific version of its Business Edge curriculum, which is currently offered at three training institutes. They have begun training female instructors, and are looking to obtain subsidies from international donors and local companies. The existing Business Edge curriculum has already been used to train 3700 businesspeople, 35 percent of whom are women. Mohamed also expressed interest in partnering with another MEPI-funded program, Women in Technology, managed by the International Institute of Education. 7. COMMENT: The IFC office in Sanaa was a bit slow to get off the ground, but is now poised to make a significant impact on the reform process. If the program can succeed in delivering improvements in the investment climate, specifically in the number of days required to register a new business, it will help build confidence within the donor SANAA 00002143 002.2 OF 002 community and improve Yemen's reputation as a place to do business. The gender programming offers less immediate benefit for reform in Yemen. The decision to expand Business Edge (a for-profit enterprise of the IFC) to make it gender specific is a relatively minor accomplishment, given the broad needs of Yemeni women. The IFC's overall efforts to help make financing available to small borrowers may ultimately have more impact for the average Yemeni, both male and female. END COMMENT. Khoury |