With these factors in mind, the Development Champions held in-depth discussions to develop recommendations and guidelines to ensure the reconstruction and recovery of Yemen is a comprehensive, effective process that has a long-term positive impact. This policy paper presents those recommendations.
The social fabric has also been severely damaged. While there have been discussions about the reconstruction and recovery process in Yemen, no official donor-driven, coordinated, comprehensive response has begun. The World Bank has been developing a reconstruction and recovery blueprint, but seems to have ended this effort without tangible results.
Riyadh has since announced the Saudi Program for Reconstruction, which appears to be ad-hoc with short-term interventions, limited to areas under the control of the internationally recognized Yemeni government. The Development Champions emphasize that reconstruction and recovery efforts cannot wait until the conflict ends. Conflict heightens the threat of famine, creating food shortages and reducing the ability of Yemenis to buy food. Recovery and reconstruction interventions should target all members of a community, including children, youth, and women.
Rather, the process of rebuilding must empower Yemenis to provide for themselves in the future.
In addition, an estimated 55 percent of private sector employees were laid off in the first two and a half years of the war alone, as businesses closed or reduced their operating hours. The Development Champions recommend engaging local institutions and authorities at all stages of the reconstruction and recovery process. Although the Development Champions acknowledge that many local institutions lack the necessary capacity to assume responsibility for implementation directly, they point out that some local governance structures — notably those in Aden, Hadramawt, Hudaydah and Taiz — had proven more effective than others prior to the conflict.
The Development Champions emphasize that reconstruction efforts must include mechanisms to rebuild trust in central authority and the rule of law. Finally, the Development Champions suggest establishing a new bureau to oversee reconstruction efforts:. To conclude, the Development Champions strongly underscore the importance of beginning the process of recovery and reconstruction even while the conflict is ongoing. In their views, the deteriorating conditions in Yemen require an immediate response.
Reconstruction, the Development Champions suggest, could begin in secured areas: small-scale interventions could test the efficacy of reconstruction financing and implementation models. Accessed February 21, Executive Summary: Nearly five years of conflict in Yemen have created a humanitarian catastrophe that has brought the country to the brink of famine. The Development Champions recommend that anti-inflationary measures must be part of any food security strategy. Rampant inflation exacerbates food insecurity in Yemen: The depreciation of the Yemeni rial increases the cost for local importers to bring food into the country and makes basic staples costlier for Yemeni households.
The Development Champions emphasize that any humanitarian interventions must clearly link immediate needs to a plan for lasting economic growth. The Development Champions suggest that such links could be fostered by encouraging regional and international organizations to source goods for aid and development assistance from the Yemeni private sector.
Even when addressing urgent needs such as humanitarian aid and food security, long-term economic recovery must be a priority and respective measures should be incorporated in short-term assistance. Although the Development Champions call for financial assistance, they caution against a sudden influx of external assistance to cover fiscal shortages. The Development Champions note that an injection of recovery funds may produce market distortions such as inflation or price hikes.
With regard to the payment of civil servant salaries, the Development Champions emphasize that all salaries should be paid — including military salaries. The Development Champions note, however, that the budgetary burden of salaries for military personnel in Yemen is constantly increasing.
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They argue that any intervention should directly address the significant and growing burden of military salaries on the Yemeni budget and the effect this will have on the larger economy. The Development Champions highlight that education will provide a strong basis for stable reconstruction: it ensures that future generations of Yemenis are able to take an active part in national rebuilding efforts. As such, the Development Champions caution against prioritizing other sectors over education. Rebuilding damaged schools must be accompanied by plans for more significant and comprehensive investments in education.
The Development Champions suggest the establishment of empowerment programs to prepare school leavers and college students to enter local and regional job markets, especially in neighboring Gulf countries. They suggest that, in order for training institutions to reach their full potential, the Skills Development Fund should be restructured to collaborate with the private sector. This fund could fill the skills gap between education and job market requirements to provide students with the necessary skills in languages, computer literacy and administration.
The Development Champions encourage the development of youth-tailored programs that will also tackle the culture of corruption and create a generation with a new, productive mindset. Similarly, the Development Champions propose the establishment of graduate programs to improve the capacity of state officials. Graduates of these programs would go on to help implement medium- and long-term reconstruction plans, so these programs would contribute to rebuilding state institutions.
The Development Champions also recommend creating programs to train youth in the skills needed to design and implement effective development programs and assume leadership roles in state institutions. These efforts will also strengthen the capacity of local and national institutions to transition to the agreed form of governance post-conflict, whether this is a federal state or another option.
The conflict-driven disintegration of the social fabric is an issue that impacts the success of reconstruction, economic growth and the rebuilding of state institutions. The Development Champions suggest developing a peace-building program to address negative and extremist ideologies propagated over the course of the conflict. They also recommend incorporating a detailed plan for disarmament, demobilization and reintegration activities. The Development Champions suggest reintegrating fighters into society by providing opportunities such as education and vocational training.
Above all, the Development Champions strongly emphasize that social protection programs must take into account the local context of communities in Yemen. This is likely to require a new, community-based approach. A number of Yemeni ports are in need of full rehabilitation, among them al-Mokha, Soqotra and al-Mahra.
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The Development Champions recommend that the Yemeni private sector play a key role in rebuilding infrastructure. They emphasize that enabling local input into the recovery process and empowering local actors is critical to transform Yemen and not merely rebuild it. Given the potential role of the private sector in building a stable Yemeni economy, the Development Champions caution international donors against imposing conditions that favor regional and international firms. They suggest prioritizing policies and regulations that encourage public-private partnerships.
Collaboration with the private sector could also be fostered through the Build, Operate and Transfer BOT method in rebuilding airports, seaports and electricity grids. In addition, the Development Champions suggest creating an environment that enables entrepreneurship and supports small and medium-sized enterprises SMEs , for instance by fostering financial sector development such as venture capital to support them. The Development Champions point to the high risk of corruption in the construction sector and the need to develop strict measures to curb potential avenues for fraud.
Instead of relying on the weak and costly national electricity grid, households and local institutions should be encouraged to continue to use solar power and thus to be self-sufficient. Now, as Trump begins to work toward fulfilling his promise, the details of his plan remain sketchy. Since the s, when the federal government began winding down construction of the Interstate highway system, federal spending for public projects has steadily fallen as a percent of GDP.
Faced with rising pension costs and tax-weary voters, state governments have also been cutting infrastructure spending as a share of the economy. Over the last half decade, state and local government spending on capital projects dropped from its high of 3 percent of U. Now, as Republicans take control of the White House and both houses of Congress, there's renewed momentum to tackle the task of infrastructure repair and upgrades.
But conservative Republicans remain leery of borrowing trillions of dollars to pay for the new spending, adding to the rising federal debt. The president-elect has so far spoken only in broad strokes, but he apparently intends to rely heavily on private financing to avoid the massive budget impact of an ambitious rebuilding program. The outlines of the idea were sketched in a briefing paper last month by two Trump advisors, Wilbur Ross, a private investor, and Peter Navarro, a business professor at the University of California at Irvine.
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In addition to existing programs designed to attract private investors to finance public projects, the Trump plan would provide generous up-front tax credits to those investors. The credits would then be paid for with additional revenue generated by wages from workers who build the projects and the profits of the contractors who oversee construction.
Private investment has financed a number of public projects in the last two decades, but the idea has had mixed success. In the last 25 years, for example, there have been 36 privately financed road projects that are either completed or under construction, according to a report last year from the Congressional Budget Office. Of the 14 that have been completed, three of them declared bankruptcy and one required a public buyout of private partners, the report said.
But even when those public-private projects are financially viable, they represent just a tiny fraction of the funding needed to maintain and upgrade existing roadways and bridges. That's just for highways. Much of the required infrastructure repair will involve public schools, water systems, power grids and other systems that underpin the U. One option for offsetting the impact on general federal tax revenues would be to raise additional "user fees" for specific infrastructure projects. In other words, charge people to use public infrastructure. But those additional fees would likely face political backlash as a tax increase that goes by another name.
That's why critics of private financing believe it would limit the scope of any infrastructure program. Without a new revenue stream to pay back private investors, they would have little incentive to put up the money. Though they have an important role, public-private partnerships are "no replacement for direct federal funding," and any such project "requires a reliable revenue stream for the project to be viable," Senior Vice President Richard Fierce of engineering and construction firm Fluor Corp.
Much of hundreds of billions of federal, state and local spending every year is consumed by just keeping existing infrastructure operating as smoothly as possible. Rising costs of operating and maintaining infrastructure are crowding out dollars for new highways, bridges, airports and railways. That's diverted money from new facilities that might generate new revenues. And it's also gotten a lot more expensive to build new projects. For more than a decade, infrastructure-related costs of labor and materials rose much faster than the amount being invested, according to the CBO.
It's also not clear how Trump's proposed infrastructure program will divide the burden between the state and federal budgets.