Impact of 11 September events on Yemen economy [Archives:2002/37/Business & Economy]

BY MAHYOUB AL-KAMALI
YEMEN TIMES STAFF
After one year since the events of 11 September in America had taken place we may wonder how does the Yemeni economy look and why officials talk about lagging in investment processes and drop in oil and tourism revenues despite the rise in oil explorations and the govenment’s measures for encouraging local and foreign investors. There are many questions to be raised about Yemen’s current economy situation and consequences of New York and Washington events on Yemen’s economy.
Economic negative impact on Yemen produced by 11 September events are concentrated in the following areas:
-Foreign investments in Yemen have faced a setback because immediately the Arabs and Muslims have been accused of being behind the attacks in addition to elements bearing the Yemeni nationality. That prompted foreign companies to suspend their investment in Yemen.
-Oil prices dropped by 20% and resulted in decrease in Yemen’s oil revenues on which Yemen depends on by 90% for financing its general budget.
-Tourism revenues plummeted by 50% of its annual incomes as a result of decisions taken by some countries preventing tourists from visiting Yemen under allegations of the presence of Usama bin Laden’s followers.
-Drop in Yemen’s civil aviation revenues.
-Sharp reduction in hotels guests due to reduction in number of tourists coming to Yemen from western countries.
-Losses of insurance companies because of the rise in war risks premiums imposed by international insurance companies.
-Drop in value of the national currency at a percentage as high as 6 points as the dollar exchange has reached to 176,30 rials.
-Naval transport companies of Yemen have also sustained losses and recession in their export activities. Against this situation and these developments the Yemeni government started at once taking many arrangements to deal with impact of 11 September crisis on Yemen’s economy.
-Financial evaluation has been taken regarding the losses entailed from those events and there were efforts for gathering and providing relevant information to deal with their danger in the process of preparing the general budget of the state.
-A new strategy has drawn up for activating tourism and addressing South-east Asia markets to attract tourists to Yemen.
-The government conducted investigation into sources of invested money and also subjected honey merchants to investigation to be sure about reality of information accusing them of having link to Usama bin Laden, and that suspicion proved to be groundless and therefore Yemeni honey business stayed outside the circle of the charge of funding terror.
-A new law on investment was issued containing factors and big facilities offered to investors with the aim of attracting them to Yemen.
-The Yemen Central Bank introduced a draft law on fighting money laundering.
-Yemen made contacts with the United states and donor countries to provide help in the effort for combating poverty and to help form the coast guard.
This orientation has yielded some benefits in favor of the Yemeni economy through urging Washington and donor countries on the necessity of aiding Yemen for uprooting poverty, as one of the factors breeding the phenomenon of terrorism.
The Yemeni government has obtained loans and facilities for implementing a new strategy for fighting poverty and unemployment, for supporting vocational and technical education and handicraft. The donor countries on their part decided holding a conference in Paris in mid October to discuss supporting Yemen’s policy of reforms and helping the government in its development fields.
A year after the events of 11 September it seems that Yemen which got negatively affected by them, is considered one of the countries that benefited from the war on terror. It has in return dismiss any fears aroused on al-Qaeda elements and to continue the efforts of its economic reforms and reap the fruits of cooperation with the United States for fighting terror.

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