A GCC-brokered political transition agreement for Yemen has moved into its second phase, which will see the country’s new president and cabinet focus on fostering national dialogue and economic development, according to Jamal Benomar, the UN envoy to Yemen, who helped facilitate the deal.

“Phase one is now over and we are moving into phase two,” he said after a 27 February ceremony, which saw outgoing president Ali Abdullah Saleh hand over the reins to his former vice-president, Abdrabbu Mansour al-Hadi. Two days earlier, Al-Hadi had been formally sworn in as president after standing as the sole candidate in a 21 February election.

The first phase of the deal, which Saleh signed on 23 November, saw the then-president of 33 years hand over most of his formal powers to al-Hadi, his deputy since 1994, including the ability to call for a snap presidential election and form a unity government made up of Saleh’s General People’s Congress and the opposition coalition, the Joint Meeting Parties.

With the election over, Al-Hadi now has two years to work on a new constitution with the new cabinet and plan for legislative and presidential elections to be held in 2014 under the second phase of the agreement.

“The major task now is to organise a national dialogue conference,” Benomar told MEED. “That will bring into the political process the key constituencies, who were not at the table to negotiate the transition agreement.”

The UN envoy said that preparations for the dialogue conference, which will aim at bringing together groups including youth, representatives from the south where separatists attacked polling stations during the elections, and northern Houthi rebels who rejected Al-Hadi’s installation as president, began before the new president was sworn in.

“We have been meeting with all players over the past few days,” he said. However, the dialogue process is at an early consultative stage and the cabinet is yet to agree on the formal mechanism to start it,” he said. “It’s a delicate process that could make or break the transition.”

The Yemeni economy, which shrank by about 5 per cent in 2011 thanks to unrest across the country, is also a key concern for Al-Hadi and the new cabinet, according to Benomar. “Yemenis have high hopes for the economy and it will be hard to meet them,” he said. “Electricity has been a problem, as have unemployment, fuel and food prices, and a serious humanitarian crisis. Economic recovery and stabilisation is a top priority for the government.”

Al-Hadi and the unity government are now working on an economic development plan, which they to unveil in April, he said. Government sources separately say that they expect international donors to make aid pledges in June.