Building an economy from scratch [Archives:2006/1003/Business & Economy]

November 30 2006

By: Raidan Abdulaziz Al-Saqqaf
[email protected]

A mechanism to monitor progress in the post-donors conference era is essential, while the Ministry of Planning and International Cooperation is recruiting the services of international and renowned economists to oversee the progress made, the ministry has pledges to meet with representatives of donor countries every six months to view the progress, in order to ensure Yemen makes progress in accordance to the third five-year strategic plan, donors know about it and in turn realize their pledges into finance accessible for the government in order to advance progress.

For the first time in a long time, the government seems to know what it's doing. Their workable plan got the endorsement of the international community and donors, a mechanism to monitor progress indicating that Yemen learnt from the mistakes following the Paris 2002 conference, and a revolutionary policy towards industrialization of the Yemeni Economy.

Advisors to the prime minister seem to know what they're doing, the concepts behind the Aden-Lahej-Abyan Industrial Triangle is indeed a brilliant one, Lahej has received several focused government and privet-sector investments such as the two cement factories recently established, one by the government and the other by Hael Saeed Industrial group. While the Abyan Basin is known for quality agricultural productions such as cotton and bananas, while Aden is the commerce and industry hub of the country besides having the most prosperous industrial area in Yemen with investments in sugar, oil refining, iron, steel, petrochemicals and other industries.

All the factors critical for success are available from labor to natural resources to a new power plant to access to international markets and government support, what is still missing is the financing and this is why we all are looking forward to the “Invest in Yemen Conference” in Sana'a on Feb. 7.

The aspirations of the Yemeni government aren't far apart from the reality and the newfound sense of direction can mean a new start from Yemen's economy, especially when it's the case of a country like Yemen: Building an economy out of scratch. Today, Yemen still has a shrinking agricultural-based economy providing income and livelihood to some 70 percent of the society, while all industries in Yemen are unsustainable extractive industries with a few minor exceptions, providing some 70 percent of government income.

This shift is the ultimate challenge, should anything go wrong in the implementation of the third developmental plan, if corruption takes the best out of development funds, or if the plan fails to meet its target of 7.1 percent growth per annum, then all what would be left in the Yemeni economy is scratch and unfilled election promises leading to socio-political instability shaking the region.