Expected war against Iraq leads to a drop in Yemeni expatriates remittances [Archives:2003/627/Business & Economy]

March 17 2003

By Yemen Times Staff
Economic sources in Yemen have said the eruption of war against Iraq would impact on Yemeni expatriates volume of remittances and lower it drastically, specifically from the expatriates in the Gulf states. It would have a detrimental effect on the economic crisis and living conditions of the Yemenis as well as leading to reduction in investment activity in the country.
Sources expect the drop in volume of money transfers by no less than 30 per cent. They say that it is expected that Yemeni expatriates living in the GCC countries, especially in the UAE, Bahrain, Saudi Arabia and Kuwait would most of them prefer to leave their jobs and return to their country, fleeing the atmospheres of war and its consequences.
According to official sources the value of present investments in Yemen is basically dependent on the expatriates in the Gulf countries and it is considered the most important resource of capitals flowing into Yemen for investment especially in the Free Zone in Aden or in other areas and ports. The government interest in Yemeni expatriates has increased after the September 11 events in the United States. The events have led to abstention by businessmen from investing in projects and abolishing some licenses by the investors. The official sources also confirm that the efforts for attracting expatriates to bring their properties for investment in vital projects have contributed to reduction of negative impact of 11 September events on the Yemeni economy because they came at a difficult time.
Despite that the number of expatriates living in the GCC countries is not fully known up till now, estimates point out that there are around 900 thousand of them working at financial, trade, contracting and other private sector works. official sources put the volume of Yemeni money in the Gulf countries at about 75 per cent of total money of Yemeni expatriate all over the world.
With the aggravation of prospects of the U.S.-British war against Iraq, Yemen fears that it would cause the expulsion of Yemeni expatriates in the Gulf states, a consequence that would deprive them of their activities and jobs and would in the end affect the rate of gross domestic product due to drop in financial remittances.
In the aftermath of the Gulf war in 1991. Yemen's economy was hit with a setback it did not recover from it till now. About one million and a half Yemeni workers in the Gulf countries returned to their country and the government has so far not been able to solve their problems or alleviate their suffering while their money transfers dropped from two billion dollars to 300 millions. The same official sources say the expected American war on Iraq would have economic disaster on Yemen's economy, Its effects would exceed the issue of reducing money transfers to causing heavy losses to tourist sector, sea navigation, export-import movement in addition to investment in the country.
Fears have motivated the Council of National Defence, the highest authority in the country, to convene and take a number of decisions. Among these decisions are offering new facilities to local, Arab and foreign investors and containment of consequences of the war on economy, security and development.