A frog in a well [Archives:2008/1201/Viewpoint]

October 23 2008

Perhaps one of the many ironies of Yemen is that our economy is so underdeveloped that it doesn't have much to lose amidst the ongoing global financial crisis, while neighboring Arab countries and other more sophisticated and more globalized economies are shaken by this crisis. Other developing countries strategize to sustain a certain level of trade and economic activity with neighboring countries to boost their economic growth, but Yemen doesn't. We sell oil for a living; this is our economy in a nutshell. Therefore, we find Yemen's top officials and economic policy makers claiming that Yemen will not be affected negatively by this crisis.

However, this also means that Yemen will not be affected positively in times of economic growth and prosperity in other parts of the world. A frog stuck in a well is not affected by the four seasons outside of the well, and this is the status of the Yemeni economy at the moment. It is not affected by the crisis, with the exception of the limited foreign reserves Yemen maintains overseas.

The Government needs to adopt measures that help the Yemeni economy become more prosperous and advance into these modern times of capitalization, instead of maintaining the worst characteristics of a medieval economy coupled with pumping foreign currency in to stop the local economy from crashing and maintain the Yemeni Riyal on life support.

Economic activity includes winning and losing. Countries establish economic ties and become economically inter-connected in order to increase the prospects for economic growth, as well as mitigate the consequences of any economic crashes and slowdowns. The world is calling for a unified action to deal with the financial crisis sparked by the U.S. mortgage crisis, and the world is on the way to recovering from this crisis, and moving towards becoming more integrated and more economic growth as a result. Will Yemen learn this lesson any time soon?