Promoting Economic Resilience in Yemen

At the heart of Yemen’s recovery lies the capacity of its economic institutions to perform core functions, even amid fragility and crisis. The EU-OECD Project on Promoting Economic Resilience in Yemen  has  worked closely with central institutions to reinforce the foundations of economic governance, enabling the state to deliver essential services, manage public resources effectively, and restore confidence in the financial system. By combining technical assistance, international best practices, and tailored capacity-building, the project has helped Yemen take concrete steps toward restoring institutional credibility and advancing long-term economic stability. The following areas illustrate where key impacts have already materialised. 

Ensuring the effective functioning of key economic institutions lies at the heart of promoting economic resilience in Yemen. To this end, the project has focused on three vital areas: strengthening fiscal governance, improving the performance of network industries such as electricity and telecommunications, and enhancing public service delivery. The Economic Recovery Plan is now being used by the Internationally Recognised Government to shape priority interventions supporting economic stability in the short to medium-term. 

To address a longstanding data gap in Yemen, the OECD conducted the country’s first-ever national survey on financial literacy and inclusion, in partnership with the Central Bank of Yemen (CBY-Aden). The findings were stark: Yemenis scored the lowest globally in the OECD’s International Network on Financial Education (INFE) 2023 International Survey of Adult Financial Literacy. This highlighted an urgent need for inclusive financial policies and targeted financial education. The survey results are now being used to shape evidencebased interventions to increase access to basic financial services and improve financial capabilities, especially for underserved and vulnerable populations.

The project supported CBY-Aden in closing a major regulatory gap by developing and adopting Yemen’s first comprehensive Financial Consumer Protection Framework, aligned with the G20/OECD High-Level Principles. This included drafting and issuing new regulatory instructions and the creation of a dedicated department within the Central Bank responsible for overseeing financial consumer protection. As a result, Yemen’s financial regulatory framework now includes greater coverage for clients of banks, microfinance institutions, and e-money providers. These efforts have significantly improved institutional capacity and are expected to restore consumer confidence in formal financial services. 

In the face of a weakened fiscal base, the OECD provided targeted support to help Yemen’s authorities increase domestic revenue mobilisation. This included peer-learning exchanges with tax and customs authorities in Egypt and Saudi Arabia, as well as capacity-building on international taxation, VAT design, customs processes, and audit techniques. These initiatives contributed to the establishment of new training centres by the Yemen Tax Authority (YTA) and Yemen Customs Authority (YCA), alongside the development of comprehensive human resources and reform strategies aimed at modernising tax and customs administration. 

The project delivered strategic advice to help rebuild public trust in Yemen’s financial system and to strengthen the role of banks and licensed money exchangers in financial intermediation. Particular emphasis was placed on enhancing access to credit for Micro, Small and Mediumsized Enterprises (MSMEs), which are vital for job creation and economic recovery. The OECD’s recommendations have already begun shaping national efforts to introduce credit guarantee schemes, support FinTech innovation, and restore correspondent banking relationships. These measures aim to revitalise financial sector confidence and improve economic resilience in a fragile and fragmented context.

Reliable data is critical for effective policy design, monitoring, and implementation— especially in fragile and conflict-affected settings. Under the leadership of the OECD’s PARIS21 initiative, the EU-OECD Project has supported the recovery and reform of Yemen’s statistical system. Key actions included a comprehensive national data gap assessment, the establishment of a Statistics Task Force to coordinate data producers and users, and the development of the Statistical Priority Action Plan (SPAP)—a forwardlooking roadmap to rebuild statistical capacity and prioritise economic data collection. These efforts significantly strengthened institutional coordination, particularly under the Central Statistics Organisation (CSO) in Aden. As a result, Yemen has begun integrating statistical planning into broader development frameworks, including the Yemen Economic Recovery and Reconstruction Plan (YERRP). In parallel, the project supported foundational training programmes that enhanced the skills of Yemeni officials in economic statistics, planning, and governance, laying the groundwork for a more resilient and responsive national data ecosystem.

Addressing corruption and illicit financial flows is essential to restoring trust in institutions and rebuilding Yemen’s economy. The project conducted targeted risk assessments of corruption and money laundering vulnerabilities, with a particular focus on the energy and banking sectors. These assessments were complemented by a national Anti-Corruption and Business Integrity Dialogue and a Seminar on Anti-Money Laundering and Countering the Financing of Terrorism (AML/ CFT), which brought together public authorities, private sector actors, and international experts. The impact of these efforts has been tangible. They raised awareness and built consensus among key institutions on the importance of inter-agency cooperation and information sharing. Notably, the Central Bank of Yemen in Aden (CBY-Aden) began implementing risk-based AML supervision, a crucial step toward restoring the reputation of the Yemeni banking sector and reconnecting it with global financial systems.

Yemen’s private sector has remained remarkably resilient throughout years of conflict, playing a vital role in providing goods, services, and livelihoods. Recognising the importance of private sector engagement in recovery and reconstruction, the EU-OECD Project placed strong emphasis on fostering constructive dialogue between public and private actors. The project introduced a structured and inclusive “Public-Private Dialogue (PPD) Framework”, adapted to Yemen’s context, that brought together stakeholders from across both sides of the conflict. These dialogues were designed not only to exchange perspectives but also to build trust, encourage collaboration, and jointly identify reform priorities. The PPD framework has served as a trust-building platform that facilitated consensus on key economic reform areas, allowing public institutions and business actors to co-create solutions to shared challenges. It promoted transparency and inclusion in decision-making processes and laid the foundation for a more stable and coordinated approach to policy development in support of private sector growth. Through sector-specific consultations, the project achieved meaningful results in three critical areas: • In the energy sector, it promoted investment in solar energy solutions to address the urgent need for reliable electricity access, crucial for both household resilience and business continuity. • In terms of investment, the project advocated for simplifying business registration procedures and expanding the use of Public-Private Partnerships (PPPs) to improve infrastructure and services while reducing the risks borne by the state. • For trade, the project supported the implementation of the Trade Facilitation Agreement and the reactivation of key trade-related committees, helping to enhance Yemen’s regional integration and competitiveness. Beyond sectoral progress, the PPD framework achieved cross-cutting impact by intentionally promoting inclusive participation. It empowered women-led businesses and young entrepreneurs by ensuring their voices were represented in reform discussions. The dialogues also helped align policy priorities among diverse national actors, fostering greater ownership and sustainability of reform initiatives.

In a context as complex and fragmented as Yemen, effective coordination among international donors is vital to ensure that aid contributes meaningfully to long-term recovery and stability. The EU-OECD Project has played a key role in strengthening donor coordination by facilitating structured dialogue between major donors, multilateral partners, and Yemeni counterparts. One of the project’s early achievements was to map Yemen’s fragmented aid landscape, identifying overlapping interventions and gaps, and initiating conversations that have led to a more harmonised donor presence. This work directly contributed to the establishment of the Yemen Partners Group (YPG) and its technical task teams, mechanisms that now serve as strategic platforms for enhanced donor coordination. These structures provide a space for international partners to align their efforts, share information, and define common priorities in line with Yemen’s recovery and development goals. As a result, donors have increasingly begun to align their programming around shared priorities, with a stronger focus on macroeconomic stability, institutional strengthening, and sustainable development. At the same time, the project has helped to strengthen the capacity of the Internationally Recognised Government (IRG) to engage with donors more effectively. This includes supporting efforts to shape aid flows in a way that is consistent with national priorities and development plans. Looking ahead, the OECD is now focused on co-designing a unified strategic framework to guide peace and development financing in Yemen. This includes exploring pooled funding mechanisms, improving information-sharing, and aligning development support with broader peacebuilding and state-building objectives. By anchoring donor coordination in an inclusive and forward-looking framework, the project continues to support a more coherent, impactful international response to Yemen’s recovery. 

A key achievement of the project has been its direct support to the Yemen Economic Recovery and Reconstruction Plan (YERRP). Drawing on policy analysis, technical expertise, and extensive stakeholder engagement, the OECD provided strategic guidance to help shape the plan’s priorities across fiscal governance, infrastructure, financial inclusion, and institutional development. This included contributing to the identification of reform areas and capacity needs that are now embedded in the YERRP framework. By aligning international support with national strategies, the project has helped strengthen ownership, coherence, and implementation of recovery efforts led by the Internationally Recognised Government of Yemen.