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Farrukh Iqbal, World Bank Sector Manager Economic Development, (Middle East North Africa) MENA Region:

“The funds that go to Yemen cover a broad range of areas. The projects are directed in decreasing poverty in general. We have many projects that focus on poor communities, water supply, schools, rural roads, and other aspects that the people in general benefit from. We do not have any hidden goal in helping Yemen and our projects will show that.”

  Interviewed By: Interviewed by Hakim Almasmari From Washington D.C.
  Article Date:
October 20, 2008



Yemen Post: Internationally prices increased on average 10 percent, while in Yemen some commodities increased more than 200 percent of what they were only 2 years ago. You mentioned in your report that prices only increased 20 percent in Yemen last year?

Farrukh Iqbal: You have to be careful when saying that. The report was about all the foods and goods in the Yemeni economy and not one thing in specific. When you say that some commodities increased 200 percent, that could very well be true, however, all goods did not increase 200 percent. Therefore, our average that we mentioned in the report is on all goods in general. For example, the prices for food increased by 50 percent, but in the meantime, the prices for energy did not increase very much and only increased for example 5 percent. Therefore, all the averages are added together and that is where and how we got our 20 percent increase on commodities in Yemen.

Yemen Post: Why doesn't the Bank give the fund directly to the poor, instead of going through the government, which in return eats a big portion of the fund?

Farrukh Iqbal: That is a very good question. Firstly, we are owned by the government of the countries, therefore the rules of the World Bank is not made by us, but by the these countries and the people who represent them. They decide on what to do. In addition, it is true that we operate directly with government, but in recent years, we have started funding projects directly, and conducted numerous non-government activities. Also, a number of the projects that we conduct are run by communities directly and not by the government, but of course that the government of Yemen has to still first accept this procedure, and the money for these projects are passed on directly from the government of Yemen to the communities.

Yemen Post: Some observers in Yemen mention that the World Bank is directly behind the underdevelopment in Yemen, and its actions will assure that the country continues to go backwards?

Farrukh Iqbal: I am sorry that they feel that way, but I do not think that those people have any proof to back such statements. All World Bank activities in Yemen have been pro development, and for those who feel the opposite should learn more about the bank and find out how the bank conducts its projects.

Yemen Post: Why doesn't the Bank give poor countries grants, which are free, instead of loans?

Farrukh Iqbal: The bank is a bank and that is the policy of any bank. Nevertheless, in the situation of Yemen, the amount is given as a grant to the government and not a loan. Therefore, officially, they do not have to pay us back. In the past, some parts of the money were given as loans, but since recently, all the money now is given as grants. Even when the money was given as a loan, it was a long term loan, which means that the government of Yemen does not have to pay us back only after 40 years. After all those years, the amount that is paid back is interest free. Therefore, in other hands, we do not gain anything when we give Yemen money, and the country has everything to gain. 

Yemen Post: Some say that the Bank focuses on funds that encourage girls and women in specific and not the people of Yemen in general?

Farrukh Iqbal: The funds that go to Yemen cover a broad range of areas. The projects are directed in decreasing poverty in general. We have many projects that focus on poor communities, water supply, schools, rural roads, and other aspects that the people in general benefit from. We do not have any hidden goal in helping Yemen and our projects will show that. Our projects throughout the governorates in Yemen will show the different ranges that we try to help the people and the country of Yemen.

Yemen Post: Yemen is a country rich of resources but is poor, can we expect a stronger role from the World Bank to force Yemen to end the ongoing corruption that takes place in the country?

Farrukh Iqbal: I think the word force is too strong. With all the countries we work with, we work on partnership. I expect by working in this fashion, we would be able to help Yemen get over some of its difficulties. 

Yemen Post: You mentioned in your book "Economic Developments and Prospects" that that food price inflation exceeded 20 percent in Yemen during 2007. How much do you expect the inflation for 2008 to be?

Farrukh Iqbal: This is a very difficult question; we would expect food prices to be lower in 2009 than what they are in 2008. We do not have the final numbers for 2008 yet, but the price hikes that occurred in the beginning of the year were very hard on all countries. In addition, towards the end of this year, we saw some prices go back to normal, or at least decrease in price. Internationally, the prices of wheat today is down 30 percent from its peak prices back in March. Therefore, that is a good indicator that prices are on the decline. 

Yemen Post: Why do prices increase more in Yemen than other countries around the world?

Farrukh Iqbal: Probably in the case of Yemen, the reason for that could be the distribution of the food is not done accordingly, which in result, makes prices increase. If that is the case than the government should look in to it and try to find easy solutions to ease the burden from the people. In the end, we still cannot say that prices do not decrease, but we can say that the decrease in not noticeable, because if you compare prices over the last ten years, it is always up and down and not always up. 

Yemen Post: From your knowledge of the Arab region, which country seems to have the hardest road ahead of them in the next couple of years?

Farrukh Iqbal: This is a little difficult to answer. As we were discussing today in the briefing, the rise in oil has been generally good for the Middle Eastern region, with Yemen included. This is because these countries export the oil and any extra price on the oil will definitely help these countries, and the opposite. If the price of oil decreases than Yemen’s economy will suffer.

This is why it is very difficult to answer this question because it is linked with what happens with the price of oil and other commodities, and which prices will change in the near future, so I would rather not speculate on this matter. 

Yemen Post: Ten years from now, how can you picture Yemen?

Farrukh Iqbal: With good policy reforms, Yemen would be more prosperous than what it is now. Effort is needed to improve the circumstances in a country like Yemen, but this also goes for many countries in the world now. Therefore, with reform, good things can happen in Yemen.

Yemen Post: Final Comments?

Farrukh Iqbal: I would like to thank the Yemen Post for this interview, and I hope the best of luck for you.