An Historic Agreement: Public-Private Partnership to Safeguard Yemen’s Future

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The stakes are high in Yemen’s ongoing political transition, but recently the Yemeni government and private sector took steps to ensure that this transition will lead to greater security and opportunity for all Yemenis.

Yemen’s recent history has been marked by popular demand for better governance and a more democratic policymaking process. This demand has been seen from the 2011 popular uprisings, to political demonstrations, grassroots activism, and widespread participation in the National Dialogue Conference. Meanwhile, the price of ignoring these demands and of failing to listen to sensible recommendations for improving governance, security, and the economy has been illustrated by ongoing instability throughout the country.

On November 18, a Memorandum of Understanding (MoU) between the Government of Yemen and the Yemeni private sector was signed, establishing a public-private partnership to foster an enabling environment for business creation and youth employment, a step that is unprecedented in that country. This event marked an important step toward inclusive governance and effective policymaking in Yemen. Such cooperation between the government and non-governmental sectors like the business community is vital to ensuring that Yemeni citizens can participate in the democratic process, which is necessary to promote inclusive economic development, security, and employment, and to reduce violence and extremism.

The MoU was signed at an official ceremony at CIPE Headquarters in Washington, DC, and aimed to promote inclusive economic development that will create jobs and foster peace. The document was signed by Dr. Mohammed Al-Maitami, Yemeni Minister of Planning and International Cooperation, representing the Yemeni government; and Mohammed Abdo Saeed Anam, Chairperson of the Yemeni Federation of Chambers of Commerce, representing the private sector. It outlined a formal dialogue mechanism between government and private sector, the creation of a Joint Committee on Small and Medium Enterprises and private sector engagement in value chain development. It also calls for reforms to reduce corruption, protect private property, and provide the requirements of a suitable investment environment for the private sector that is attractive for local and foreign investment.

The MOU focused on six substantive interventions to be undertaken by the Yemeni Government and private sector, including: (1) private sector feedback on the initial draft of the new constitution; (2) establishing a joint government-private sector economic and social council to promote private sector participation in policy-making; (3) commencing a public-private dialogue process at the national and local levels, to begin in 2015; (4) implementing a comprehensive strategy (outlined in the MOU) to support small and medium enterprises; (5) developing and beginning to implement a joint government-private sector reform plan by mid-2015; and establishing reformed, “model” police stations in several cities, starting in the first quarter of 2015.

The signing of the MoU took place following an event that CIPE co-hosted with the United Nations Development Programme (UNDP). It was an unprecedented roundtable of high-level representatives of the Yemeni government, political parties, the private sector, and the international community addressed the issue of the private sector engagement in Yemen’s economic growth and sustainable development. During the event, discussions revolved around the need for establishing mechanisms for a robust public-private partnership to address Yemen’s most pressing issues, such as slow economic growth, massive unemployment, widespread poverty, and the lack of security.

This roundtable was held in conjunction with Yemen being selected by the World Bank and the United Nations to undertake a Millennium Development Goals Acceleration Framework exercise to identify fast-track solutions for poverty reduction in Yemen by improving rural livelihoods and creating employment for women and youth. The findings of that exercise were presented to the Chief Executive Board meeting, which brings together the executive heads of 29 UN System programs and specialized agencies, including the World Bank and the International Monetary Fund (IMF), and which is being held this year in Washington, DC from November 20-21.

Yemen stands at a crossroads in its transition to democracy. This transition has overcome many obstacles, but many challenges lie ahead as well. Further progress requires comprehensive reforms of state institutions and public participation in the policymaking process. Although Yemen’s future is uncertain, the political transition provides a historic opportunity for political, economic, and social reform, and the signing of this Memorandum of Understanding represents an important step toward ensuring the success of Yemen’s transition.

In the upcoming months, CIPE and the UNDP will work with Yemen’s private sector, government and civil society to support the public-private partnership outlined in the MOU. As part of that effort, CIPE, the UNDP, and the Yemeni government will co-host a conference in February as a follow up to the November event to outline plans for implementing the provisions of the MOU.

Matthew Godwin is a Program Assistant for the Middle East & North Africa at CIPE.

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