YEMEN HARMONIZES UNEMPLOYMENT RATE WITH

UNCLAS SANAA 000981

SIPDIS

NEA/ARP FOR ANDREW MACDONALD
USAID FOR CHRISTOPHER KISCO

E.O. 12958: N/A
TAGS: ECON EAID PGOV YM
SUBJECT: YEMEN HARMONIZES UNEMPLOYMENT RATE WITH
INTERNATIONAL FIGURES


1. SUMMARY. In a departure from the past, the ROYG has
announced that the unemployment rate reached 35 percent in
2008, which is in line with statistics from international
organizations. The ROYG's report could symbolize a
harmonization of government figures with
internationally-recognized statistics. ROYG acknowledgement
of and agreement with internationally recognized unemployment
rates could represent a step towards greater transparency in
official statistics as well as more realistic policy
assessment and implementation. END SUMMARY.


2. In early May, the Ministry of Planning and International
Cooperation (MOPIC) released its annual Economic Report,
announcing that Yemen's unemployment rate reached 35 percent
in 2008 as compared with 16.7 percent in 2007. Prior to
2007, ROYG reports have indicated that unemployment did not
exceed 11 percent. These figures contrasted starkly with
figures from international organizations such as the World
Bank, which have identified unemployment as high as 40
percent.


3. The Economic Report may indicate a harmonization of ROYG
figures with internationally-recognized statistics. Hisham
Sharaf Abdalla, Deputy Minister for International Cooperation
at MOPIC, told EconOff on May 19 that this year MOPIC used a
different method for calculating unemployment, which takes
into consideration temporary unemployment of mobile workers
as well as permanent unemployment of stationary Yemenis. Ali
Alabdulrazzaq, Senior Economist at the World Bank, suggested
to EconOff on May 18 that the unemployment rate depends on
the method used to calculate it, which could be as low as 16
percent, using one method. Nabil Shaiban, Director General
for International Cooperation at MOPIC, told EconOff on May
19 that the figures have been updated for 2008 and that "low
participation in the labor force"*another measure for
unemployment*has reached 39 percent.

COMMENT
--------------


4. Official figures, which in the past have varied greatly
across governmental ministries, have been long held suspect
by international observers and cited as the basis for
short-sighted policy decisions. ROYG acknowledgement of and
agreement with internationally recognized unemployment rates
may represent a step towards greater transparency in official
statistics, and an opportunity to develop a strategy based on
concrete figures to counter unemployment. END COMMENT.
SECHE