The World Bank recently approved a new 5-year framework aimed at supporting Yemen’s economic recovery through investments in jobs, infrastructure and essential services. The plan comes after a decade of conflict that has severely damaged Yemen’s economy and infrastructure.

More Than a Decade of War

Civil war has affected Yemen for more than a decade as conflict between the Houthis and the internationally recognized government continues to drive one of the world’s worst humanitarian and economic crises.

Yemen’s economy has faced severe strain due to policy decisions on both sides, including the relocation of the Central Bank of Yemen from Sanaa to Aden and the printing of trillions of rials in new banknotes without sufficient foreign reserves. These actions have contributed to currency depreciation and rising inflation.

One of the country’s biggest challenges is the existence of two separate financial systems. In 2019, authorities in Sanaa stopped accepting government-issued banknotes, further dividing monetary policy between the two areas.

The collapse of oil exports and reduced foreign currency inflows further weakened government revenues, accelerating economic decline. Combined with disruptions to trade and infrastructure, these pressures deepened Yemen’s overall economic crisis.

The Human Cost of Conflict

Even before the war, Yemen had one of the highest malnutrition rates in the world and ranked among the most vulnerable countries in the Middle East. Nearly half of the population lived in poverty and lacked access to safe water.

Today, food insecurity affects 17 million people, while 18 million lack access to safe water and sanitation. Additionally, 80% of the population lives below the poverty line, while displacement remains widespread across the country. Women and children account for 80% of Yemen’s 4.5 million internally displaced people. Women and girls face heightened risks of gender-based violence, exploitation and early marriage as conflict and economic hardship place additional pressures on families.

Better Livelihoods and More Jobs Amid Fragility

In response to these challenges, the World Bank’s new framework aims to support Yemen’s long-term recovery through investments in health care, infrastructure, water access and economic development.

Under the theme “Better Livelihoods and More Jobs Amid Fragility,” the new Partnership Framework aims to improve nutrition, expand access to electricity and strengthen agriculture and fisheries businesses. The framework also seeks to increase women’s participation in the economy by expanding access to jobs, resources and economic opportunities.

To support these goals, the World Bank approved four projects focused on health care, water access, infrastructure and institutional development.

One of the largest investments targets health and water security. A $94 million health, nutrition and water and sanitation project will expand access to essential services for vulnerable populations, particularly women and children. The initiative will strengthen disease monitoring systems, improve health infrastructure and provide outpatient services to more than 6 million people.

Another $153.6 million project addresses Yemen’s ongoing water crisis by restoring irrigation systems, rehabilitating water infrastructure and introducing digital tools to manage water resources more efficiently. By 2030, the project aims to expand access to water, sanitation and hygiene services to 6.4 million people.

The framework also invests in urban infrastructure. A $21 million project will restore roads, electricity and water systems in selected cities, improving access to essential services for up to 1.75 million people.

In addition to rebuilding infrastructure, the World Bank plans to strengthen public institutions. A $20 million governance project will improve financial management and statistical systems, helping rebuild government capacity and support Yemen’s economic recovery.

Looking Ahead

While Yemen continues to face economic and humanitarian hardships, the new framework offers renewed support for a country working toward recovery. Stéphane Guimbert, World Bank Division Director for Egypt, Yemen and Djibouti, said Yemen’s future “has to be built now,” adding that the goal is to create real opportunities for Yemenis, especially women, while strengthening the institutions that will carry the country forward. Although recovery will take time, the framework aims to lay the foundation for a more stable future.

– Isabella Pedroza

Isabella is based in Salt Lake City, UT, USA and focuses on Good News for The Borgen Project.

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