“I am extremely pleased to be here today, both as a resident of Yemen , and in my official capacity as the representative of the World Bank.

Within the region, Yemen has been in the forefront of committing itself to the Millennium Development Goals to improve dramatically the lives of its people by 2015. Within the region, Yemen has been in the forefront of preparing a quality Poverty Reduction Strategy, which sets itself ambitious goals. Within the region, Yemen has been in the forefront of decentralizing, of investing in girl's education and investing in people. In all of this the Social Fund has had, and will continue to have, a central role to play.

If we imagine the headline in the newspapers on January 1, 2015, I fully expect it to read" Yemen Meets its Development Goals" and the subtitle will explain how important the Social Fund has been in accomplishing this.

Let me take you back few years, to the year 1996 when the idea of establishing the Social Fund in Yemen was just an idea in the minds of few people in the government and the World Bank. To be frank with you, a number of my colleagues were skeptical about the idea of establishing a social fund in Yemen . Their reason was that the quality of the World Bank portfolio in Yemen was not very good, and social funds in general require a high level of commitment, sophistication, and staff of high professional caliber. I am happy to confirm to you today that the World Bank's portfolio in Yemen is above average compared to other IDA countries, and that the Yemen Social Fund is used in the World Bank as a best practice model. We are encouraging colleagues in other countries to come, visit the Social Fund in Yemen and learn from the rich experience they have. The Yemen Social Fund has also been selected by the management of the Bank as a successful case study to be presented in a major poverty reduction conference that the Bank is organizing in Shanghai , China next year.

Let us reflect for a moment on why the Social Fund is making a difference in Yemen . There are two main reasons for it, it seems to me.

First, we need to recognize publicly the quality of the Social Fund staff and management. We all know that the Yemeni public has concerns about the quality and effectiveness of the civil service. I never hear complaints about the Social Fund no matter where I am in Yemen ; quite the opposite, I hear people are pleased the Bank is supporting it. The lesson is that there are many qualified Yemenis who are capable and committed and if they are well selected, well compensated, well managed, and placed in an enabling environment, Yemen can compete on a global scale. Civil service reform is not only needed, but the model of the Social Fund shows us it is entirely feasible.

Second, I think we need to acknowledge how important it has been for the Social Fund to have an independent and autonomous character, operating under a board of directors, which is diversified and professional. The Social Fund's flexible nature is also an important element in this success.

I would like here to also mention that the Social Fund has moved from just being a service delivery mechanism to becoming a model agency and a house of innovation. This aspect of the operation should be recognized, and ways should be found to maximize the institutional development impacts of the Social Fund. The Social Fund has developed a real comparative advantage in working with local communities. More of this will need to be done in the future. Training of community groups, support to user committees, and work for the benefit of the disadvantaged groups is the main direction for the future both at the Social Fund and through the government.

In conclusion, let me emphasize one major point. We in the World Bank are pleased to continue to support the Social Fund given its strong performance. I believe many other donors feel the same way. But government contribution in the form of substantial funding is necessary as well. We at the donors' side also have to work closely together to ensure we are providing the support we can to the social fund, and that our requirements do not become a burden on the Social Fund. We have received commitments from the government that it will considerably increase its funding to the Social Fund and we are pleased with this. The level of Bank support to the Fund, as well as in respect to other donors will be related to the level of government financial support. The more the government is willing to do, the more we will be willing to do”.