Center for Studies: inflation in the public sector payroll threatens Yemen's powerless economy
English - Wednesday 25 September 2019 الساعة 04:21 pm
Aden – NewsYemen.net
The Sana'a Center for Strategic Studies revealed a huge inflation in the public salaries sector in Yemen after the government and the Houthi group added thousands of names to the payroll of the military and security services.
Worsening public sector employment put pressure on the state budget before the conflict to consume an average of 32 percent of government spending in salaries and wages between 2001 and 2014, the Sana'a Center report said.
The report considered inflation as a cumulative result of mismanagement of employment policies and administrative corruption because the payroll included a large number of fake names and double employment, and military and security leaders received financial and in-kind privileges.
The report pointed out that the warring parties increased large numbers of new employees to the public payroll, especially the military and security services, in conjunction with the contraction of the Yemeni economy.
Yemen faces a large budget deficit, estimated at 660 billion Yemeni rials in 2018, equivalent to $ 1.24 billion.
According to the report, public sector salaries represent 39.33% of expenditures provided in the first section of the government budget for 2019, and does not include government expenditures on other bodies and funds that are outside the first chapter.
Spending for the public wage sector rose from 977 million riyals in the 2014 budget to 1.2 billion riyals in the 2019 budget, although the government paid only about half of its employees.
About half a million employees in Sana'a and the rest of the Houthi-controlled provinces remain without salaries for nearly two and a half years, while the government pays the salaries of state employees in their areas on a monthly basis, including half a million military personnel, inflating the salary bill.
This month, the International Monetary Fund (IMF) urged the Yemeni government to pursue better economic policies, improve revenue collection and intensify efforts to control and rationalize spending, particularly spending on the public sector wage bill.
The central bank's stoppage of salaries to civil servants in August 2016 has played down the current crisis, and if salary payments - an urgent priority to help alleviate the humanitarian crisis - resume, it would be a crisis.
The Sana'a Center for Strategic Studies report made recommendations to reduce the public sector salary bill, relating to the Government undertaking an assessment to estimate the increase in salary records.
The report urged the reintegration of ex-combatants into civilian life, since if left unarmed and unpaid, they could disrupt any peace process, and it would not be financially possible to continue their assimilation into the military and security after the conflict.
It pointed out that they should be offered reassuring options, and if some were not included in salaries, they would be integrated and employed in post-conflict reconstruction and rehabilitation efforts, and trained professionally in line with labor market needs.
The report stressed the need to reduce administrative corruption through the electronic fingerprint system to identify all employees.
The report recommended medium- to long-term reforms to create an effective and financially sustainable public sector, including scrutinizing public service accounts and reducing salaries by reducing staffing and developing transparent recruitment procedures.
