Restructuring Public Finances in Yemen

Restructuring Public Finances in Yemen


Restructuring Public Finances in Yemen The ongoing war in Yemen has contributed to the significant deterioration of government financial performance. Public resources before the war made up 24% of the gross domestic product, but this rate has decreased to 8% in 2018. Oil revenues were the main source of funding for public finance balances before the war, while the salaries and wages item took the biggest portion of expenditures in the public budget. And because of the war: 1- Petroleum exports and revenues have gone down by 77%. 2- Government spending has gone down, while social security programs and investment spending have been frozen. 3- The payment of the salaries of a large percentage of civil servants has stopped. 4- External grants and aid have been frozen. In order to restructure the public finance system, the following is recommended: 1- The oil and gas exports needs to be urgently increased. 2- Taking serious steps to diversify sources of public revenues by improving the effectiveness and efficiency of the tax and customs system. 3- Developing mechanisms to improve transparency and accountability for government spending. 4- Conducting an assessment on the increase of individuals in civil servant and military payrolls since the beginning of the war and decreasing administrative corruption through the use of biometric registration technology for all public sector employees. Rethinking Yemen’s Economy
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