How Can Investment Prosper? [Archives:2001/52/Business & Economy]
Mohammad Hatem Alqadhi
Investment in Yemen is believed to be a very good source for national income. There can be many opportunities for local and international investors. However, there are many obstacles lying ahead.
There are people at the power center who exercise pressure on investors to join investment projects and share the profits. They dont share the expenses, claiming that they provide protection in return. The government confessed that such practice has made many foreign investors change their minds about investing in this country.
The absence of law and order, which has been always breading kidnappings and other sorts of security break downs, adds fuel to the fire. Of course, there are other reasons like government bureaucracy, lack of independent judiciary, smuggling, lack of facilities and other pitfalls-all have crippled investment drive in the country which substantially emerged in 1992.
Since this beginning of this year, around 2606 projects have been licensed by the General Investment Authority (GIA.) During the same period only 1346 projects have been implemented (57%). They provided 26976 job opportunities for Yemenis. Most of these projects belong to the service sector (48%), then the industrial sector (41%), tourism (38%) while agriculture and fisheries hit only 23%. Other projects are stuck and have not been carried out. Lack of services like water, electricity telephoneetc: represent 35% of the obstacles facing investment in the country. Government routines and other sorts of blackmailing and corruption make 27% of the obstacles these stuck projects faced. Report of the (GIA) reveal that 7% of the problems are technical difficulties investors themselves face, leading to the stop of their projects.
Of course, we cannot neglect the security situation, which brought some projects into a halt. Oil companies are working in tribal areas mainly Marib, have suffered a lot. Their experts have been kidnapped. Their pipelines have been pierced several times.
Kidnappings have stalled tourist sector completely. This sector has flourished between 1996-1998. But after 1998, it dramatically fell down, losing around $200 million per year. Not only this, around 35,000 persons working in this sector are without work now.
Of course, a number of investors would like to come to and invest in Yemen mainly in the Aden Free Zone. But when they look into such detriments, they hesitate as they dont want to take the risk.
But, the lack of infrastructure, independent judiciary, stability, stock market and other attractions will continue to stick investment, pushing investor to look for a better place.
People in authority should think of how to create the appropriate atmosphere for investment to prosper. Investment can help a lot improve Yemens economy, particularly in this era of globalization when countries are working hard to attract more and more investors.
Before calling on foreign investment, government should first ask if the needed factors are available or not.