A purposely delayed destinyYemen’s accession to the Gulf Cooperative Council [Archives:2006/977/Business & Economy]

August 31 2006

By: Raidan Al-Saqqaf
[email protected]

Yemen's economic development hasn't been smooth sailing. In the last twenty years Yemen has suffered primarily from regional and internal disputes including the 1990 Gulf War which brought back over 800,000 Yemeni expats who were working in Gulf countries and were sending over US$ 1.7 billion in remittance to Yemen. The 1994 civil war reduced the Gross National Product (GNP) to almost half what it was in 1990. Yemen's economic deterioration hit the bottom in 1995 when external debts were double the GNP, that is when the government launched financial and administrative reforms packages, announced later on by the Minister of planning to be a failure as it had very limited success in meeting objectives, mostly due to corruption which became widespread in most government and government-linked operations.

Terrorism cost was high in Yemen and the bombing of USS Cole and French tanker Limburg showed that Yemen's fragile security can cost the economy dearly, however with Yemen's participation in the war against terrorism, confidence in Yemen's security has slightly increased only to find some of Al-Qaeda's most wanted escape from political security in 2003 and again last February.

Yemen's reliance on natural resources as a means to fund government operations and several infrastructure services is an unsustainable one as Yemen doesn't have as much oil and gas reserves compared to neighboring countries, and the current exploitation of Yemen's Natural resources without compliance with the Extractive Industries Transparency Initiative does not indicate that Yemen is using revenues from extractive industries to undertake projects of sustainable development and reduce poverty, in fact, poverty in Yemen continues to escalate in spite of high prices of Oil reaching US$ 70 per barrel.

Therefore, Yemen's development isn't relative to the country's resources and wealth; it is an issue of policy reform especially considering the gloomy history of Yemen's economy. Here comes the hope that Yemen's accession plan to the GPC would not only result in serious policy reform and corruption eradication, but might boost the economic growth to bring a brighter future for Yemen.

The General Secretariat of the Gulf Cooperative Council has sent a team of experts to Yemen in order to analyze the economic, political, social and cultural circumstances and formulate a detailed 10-year strategy in order to accept Yemen as a member of the GCC. The strategy consists of two five-year strategies, the first has to do with habilitating Yemen's systems and infrastructure which includes serious measures against corruption and existing inefficacy, while the second half includes tactics towards harmonization between various authorities and government agencies between the GPC and Yemen.

Parallel to that ten-year strategy, was another supplementary strategy to encourage businessmen and donors to invest in Yemen, this includes GCC technical assistance in preparing for the donors conferences scheduled in London in November, and a follow-up conference in Sana'a in February. The goal is to enlighten international investors on the opportunities in Yemen, which will result in providing employment and increasing economic activity and out-put along with spillovers of technical know-how, methodologies and new technologies.

Ironically, the government of Yemen focused on the supplementary strategy without fully integrating the first primary five-year plan laid out by the GCC experts into Yemen's third National five-year plan in order to facilitate Yemen's accession in the GCC. Moreover, Yemen is yet to formulate a strong anti-corruption policy, in spite of the recent presidential decree with regards to disclosure of wealth of newly appointed government officials, and giving the authority of execution to a non-existent government agency. Yemen seems to be lacking the motive for corruption eradication, increasing the validity that those involved in corruption are policy makers or are involved with policy makers. The selective integration of the GCC's primary 5-year plan into Yemen's third national plan is another indication of that.

Last Tuesday conference on Yemen's accession to the GCC, Prime Minister Abdul Qadir Bajammal indicated the main obstacles for Yemen's accession to the GCC are cultural and social rather than economic, in the sense of creating shared ideologies and 'way of thinking' among youth of the GCC and Yemen in order to create true integration. However, knowing there are critical differences and a huge contrast between the quality of life and students in Yemen and the GCC, that integration seems far fetched to most, especially in Yemen.

At the same conference, Minister of Planning and International Cooperation indicated the means to achieving the prime minister's vision is by allowing Yemeni labor to travel and work in GCC repeating the history of the 70s and 80s, a point which was not pinpointed in the GCC's strategy to habilitate Yemen for a good reason, allowing mass migration to the Gulf does not solve Yemen's problems.

The unrefined understanding and execution of Yemeni policy makers of the 10-year strategy laid by the GCC's general secretariat would not only delay Yemen's accession but will, unfortunately, continue the current trend of economic hardship and poverty in Yemen.