“Your Excellency President Ali Abdullah Saleh,

Speaker of the House of Representatives
Deputy Prime Minister and Ministers
Distinguished Guests of Excellencies and Donor Representatives,
Ladies and Gentlemen,
I would like to welcome all of you for your participation with us today to inaugurate the Third Phase of the Social Fund for Development operations, under the kind sponsorship of His Excellency President Ali Abdullah Saleh.

Mr. President,

Ladies and Gentlemen,

The Social Fund for Development was established in 1997 as one of the main components of the Social Safety Net aiming to cushion the adverse impact of the Reform Programs, and to contribute effectively to improving the living conditions of the poor through the provision of basic services, promotion of income-generating activities and creation of job opportunities.

Today, the Social Fund plays an important role towards achieving the goals of the Poverty Reduction Strategy and national sectoral strategies, as well as the Millennium Development Goals.

Over the past six years, the Social Fund has adopted several important new development concepts and policies, and has decisively and determinedly promoted and applied them in its activities. The most important of these concepts and policies are targeting poor and deprived areas, demand-driven approach, community participation, sustainability, transparency, productivity, implementing projects cost-effectively, reducing administrative costs and financial and administrative autonomy.

They also include modern management & governance methodologies , accountability, applying advanced databases, developing the Geographic Information System that is used as an effective planning tool in targeting—using different surveys—and to produce services and poverty maps.

The Social Fund has encountered many hardships as a consequence of adopting these concepts and policies. However, the prompt fruitful and satisfying outcome of SFD's performance, continuously supported by the government and the political leadership headed by His Excellency President Ali Abdullah Saleh, have enabled the Social Fund to proceed forward successfully. In addition, many agencies—over time—have increasingly become interested in these concepts and policies as they realized their importance and favorable impact on achieving development objectives.

Consequently, the SFD has helped develop a new approach to development based on the best practices applied worldwide.

According to the donors and assessment missions, the Social Fund has become an important tool for change in the context of the weak prevalent administrative environment, providing a demonstration model to be learned from within the administrative reform efforts. Indeed, the Impact Evaluation Survey—funded by the Dutch government, and conducted by a specialized international company that was assigned by the World Bank—has shown that “a high proportion of SFD resources are benefiting the poorest households in Yemen” and the Yemen Social Fund's mechanism of targeting the poor is “much better” than the other Social Funds, where the same analytical procedures have been applied.

Mr. President,

Ladies and Gentlemen,

The determined commitment and adherence of the SFD to these policies have brought about a favorable shifting move, both quantitatively and qualitatively, towards further development & enhanced implementation of the Fund's projects & programs and maximizing their impact on the lives of target groups. Moreover, these policies have also enabled the SFD to utilize its resources more efficiently and thus accelerate the accomplishment of Phases I & II in a considerably short period—each in less than three years instead of the five planned.

Over the past six years—and as of 30 September 2003—the Social Fund could develop and implement about 3 , 260 projects (some of which are still under implementation) with a total cost of around 243 million dollars. The projects were distributed as follows:

1737 schools

59 dams, 664 cisterns, 127 mechanized water projects, 132 creefs,

74 environmental projects

252 health projects

146 projects targeting special needs groups (the blind, the deaf and mute, physically disabled, mentally disabled, orphans, street children, incarcerated men and women, female and male juvenile delinquents)

84 rural feeder roads

27 roads pavement projects

232 training courses; number of beneficiaries: 76,000 from various fields

194 capacity-building projects (government agencies, NGOs, local communities, individuals, etc.)

49 projects for the preservation and restoration of historical buildings

23 credit and savings programs (which benefited 22 thousand small entrepreneurs and savers—a high proportion of them are women).

The number of beneficiaries from these projects has reached 6.6 million people—about 49% of whom female, since the Social Fund's gender-sensitive policies ensure benefiting women in all its interventions. The projects generate nearly 9 million working days and about 8,000 permanent jobs.

All these achievements could be attained only by virtue of the dedicated work of talented Yemeni professionals, who have been taken care of through continuous training and capacity building. These hard-working professionals were capable of developing work systems, procedures and approaches, benefiting from the international expertise and—at the same time—avoiding mechanical replication. This has substantially contributed to the success of the Yemen Social Fund.

Mr. President,

Ladies and Gentlemen,

The Third Phase of the Social Fund operations (2004—2008) is designed based on the acquired experience, accumulated knowledge, policies & concepts adopted during the two past phases, enhanced partnership with local communities for the social capital development, reviving the initiative spirit and self-reliance inherited by Yemenis over time. Moreover, the SFD's role will be enhanced in capacity building of local communities, civil society organizations and government agencies, as well as in supporting decentralization, coordinating & cooperating with the relevant agencies and bolstering partnership with international institutions that are experienced and specialized in small & micro-enterprises development to help support and expand credit & savings programs and increase non-financial services.

Moreover, the SFD will benefit from its institutional capacity in expanding the scope of project implementation: It is envisaged to implement about 4,400 projects (within its main three Programs) with an estimated total cost of 400 million dollars.

The projects will be distributed among the various sectors as follow:

Education 38%, Water & Environment 17%, Rural Feeder Roads 13%, Cultural Heritage 7%, Training & Capacity Building 7%, Health 6%, Special Needs Groups 5%, Integrated Intervention 4% and Small & Micro Enterprises Development (SMED) 3%.

It is worth mentioning that certain activities within the Capacity Building and SMED programs represent a challenge for the Social Fund in light of the complexity of activities, the unfavorable surrounding environment and the scarcity of human resources in these two areas—along with the determination of the Social Fund to apply the best practices.

The Third Phase will devote more emphasis to human resources development, exploring new horizons in education and expanding activities in the area of cultural heritage, with special focus given to the restoration of archeological buildings and preservation of historical cities.

Obviously, these ambitious objectives simultaneously form a big challenge due to the scattered population settlements, the small size of the projects and SFD's keenness to adhere to the best practices. Nevertheless, the Social Fund feels assured and confident in its ability to live up to the challenge.

I would like to emphasize the importance of coordinating and collaborating with sectoral ministries and the relevant concerned agencies. Capitalizing on the positive relationship that has been developing between these agencies and the SFD will undoubtedly contribute to maximizing the benefit of the projects and programs—in favor of the overall public interest.

Mr. President,

Your kind sponsorship and presence with us today to inaugurate the third phase is a great honor and support for all of us at the Social Fund. We promise hard work and commitments to accomplish more achievements.

I would like to extend my gratitude to H.E. the Prime Minister/Chairman of SFD's Board of Directors, Vice Prime Minister/Minister of Finance and Vice Prime Minister/Minister of Planning and International Cooperation, and members of the Board of Directors, and to previous Prime Ministers and Board members for their support.

My special gratitude also goes to all donors who funded the first and second phases: the World Bank, the Arab Fund for Social and Economic Development, the Dutch Government, the Government of the USA , the European Union, the OPEC Fund for International Development, the Islamic Development Bank and the Japanese Government.

I also give a warm welcome to the new donor agencies attending and participating in Phase III inauguration and the Donors' Meeting.

Thank you.”