The
International Monetary Fund on Tuesday approved a $553m loan for Yemen
to help the struggling country stabilize its finances and boost growth.
The three-year loan aims to support the Yemen
government in implementing a package of reforms amid a challenging
political and security environment, with the government facing attacks
by an Al-Qaeda affiliate and a rebellion by minority Shiites.
The reforms are also focused on the
politically difficult plan to eliminate large fuel subsidies in order to
reduce a drain on the state budget.
“A first step in this direction has already
taken place and will be complemented by well targeted social transfers
to the poor,” the IMF said.
“Additional fiscal measures will aim at
reducing the budget deficit over the medium term by reforming the civil
service and improving tax compliance.”
The announcement of the new program, with a
first disbursement of about $74 million, came as Yemen’s president
Abdrabuh Mansur Hadi agreed to the demands of the Shiite Huthi rebels to
cut back a fuel hike set in July by 30 percent, and to shake up the
current unity government.
Faced with increased pressure from the Huthis
and a deepening political crisis, “the president has agreed to go ahead
with the initiative and form a new national unity government,” Hadi’s
media advisor Fares Saqqaf told AFP.
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