The Poverty Reduction Strategy Paper (PRSP) for the years 2003 to 2005 is considered a national plan that reflects the state's commitment to its citizens for development and poverty reduction. It also represents the government's program and framework together with donors to continue the economic, financial, and administrative reforms program and achieve millennium development goals (MDGs). The Yemeni government has initiated the PRSP through widespread participation extended to the governorates and includes civil society organizations as well as the private sector. The preparation process took place during April 2000 to May 2002. It was then presented to the government and approved in June 2002.

The donor community has used this document as a vehicle to support the achievement of the MDGs. The PRSP is distinguished by its abiity to attract donor support, especially after the international organizations like the World Bank, International Monetary Fund and bilateral donors have shown their readiness to fund the financial shortfall. They have also confirmed their obligation and partnership with the Yemeni government in achieving these goals.

The PRS 2003 annual progress report outlined the procedures implemented during the year. The report also focused on the development of the economic situation and evaluated the budget performance and clarified the importance of unifying and merging mechanisms used in monitoring the implementation of the Second Five-Year Plan (2001-2005) together with the PRSP.

The government of Yemen has decided to merge the Five Year Plan and the PRSP in one plan to achieve MDGs. Because 2005 is considered the first year to start the merging process, efforts have been made to prepare the Third Five-Year Plan for Development and Poverty Reduction (06-2010). The government has also started to cooperate with the millennium project, the UN country team, concerned international organizations in developing the concept of planning according to the following three phases: