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Yemen was selected for the Threshold Program in the 2004 and 2005 selection processes, but on November 28, 2005, the MCC Board suspended Yemen from Threshhold Program eligibility due to a deterioration in performance on the eligibility indicators. On February 14, 2007, Yemen's Threshold eligibility was reinstated due to a demonstrated commitment to reform, particularly to reforms that address policy slippage as measured by the indicators.
On September 12, 2007, the MCC approved a Threshold Program (pdf) for Yemen. The $20.6 million program targets the Rule of Law, Control of Corruption, Political Rights, Fiscal Policy and Government Effectiveness indicators though various electoral, judicial, and investment climate reforms. On October 26, 2007, however, the MCC postponed signing the program.
In 2009, Yemen passed one of six "ruling justly" indicators, zero of the five "investing in people" indicators, and three of six "economic freedom" indicators.
In 2008 Yemen passed one of the six "ruling justly" indicators (corruption), one of the five "investing in people" indicators (primary education expenditures), and three of the six "economic freedom" indicators.
In 2007 Yemen passed only three of 16 indicators--one in each of the three baskets. It did, however, pass the corruption hurdle. Though reinstatement after suspension is not explicitly tied to performance on the indicators, Yemen failure of 13 out of 16 indicators in 2007 was four more failed indicators than the next lowest performing Threshold eligible country (at the time of their initial eligibity).
On November 28, 2005, Yemen became the first country suspended by the MCC for a deterioration in performance, as measured by the indicators. At its original selection point in 2004, Yemen failed to pass five of the six hurdles in the "ruling justly" category, scoring substantially below the median on rule of law. Interestingly, the one indicator it did pass in this category was control of corruption. It also passed only one of the indicators (primary education expenditure) in the "investing in people" category. Yemen did do quite well, however, on economic policy, passing five of six indicators in the "economic freedom" category, missing only on days to start a business.
In the FY 2006 round (which ocurred November 8, 2005--just prior to its suspension), Yemen failed all six "ruling justly" indicators. It failed three of the four indicators in the "investing in people" category (although it scored extremely high relative to its income-level peers on primary education expenditure). Yemen failed five of the six indicators in the economic freedom category, passing only the inflation rate indicator. Since its original selection, Yemen experienced policy slippages in 9 indicators, with consecutive annual slippages in fiscal policy and inflation rate.