In a Sana’a symposiumMany reasons behind low trust between state & private sector [Archives:2004/766/Business & Economy]

August 23 2004

Mahyoub Al-Kamaly
The relationship between the private sector & the state in Yemen can be likened to that between cat & mouse. Each side is watching the other. At a time the state request help of the private sector and its participation in development, employment of unemployed people and the implementation of charitable projects, private sector officials attach hope in the necessity of reforming legislations and offering more facilities, accusing the government of dereliction with regard to private sector investment.
In a most recent symposium organize by the Yemeni Center for Strategic Studies, private sector researchers have demanded the foundation of a Social Security Net to help the society and offer its members various types of service.
Professor of Economics at Sana'a University Dr. Mohammed Al-Haweri says that private sector's participation in investment in 2000 has declined to 60% at of total investment then in 2002 dropped to 13,5%. He has affirmed that the relationship between the private sector end the state is not founded on an institutional basis leading to the creation of job opportunities for the poor.
He has also clarified at the symposium that the private sector is suffering some problems, most common of which are bribery, corruption, statistical database, weakness of public services and banking infrastructure and spread of the phenomenon of tread cheating and smuggling.
Researchers at the symposium pointed out that the relation between the private sector and the government is characterized by ambiguity. Although the government attached hope on the privates sector for implementation of 90% of the second five-year plan to terminate at the end of next year, it (government) has not worked out mechanisms assisting the private sector for implementing its share of the plan, and that has contributed to degradation of its role in this regard.
The participants, representing Chambers of Commerce and Industry, have asserted that when investors wanted to build a project costing about YR 100 million, the municipality refused granting them license unless they paid large amounts of money in return for that, which means offering know facilities to help succeed investment projects. Those participants described the existing investment climate as an environment repulsive of investment and dose not help develop investment or use external funds for running big projects in the country.
The symposium has deemed that this situation has created some fears with the privates sectors despite of their good intension in investing their money, providing profits for their employees and upgrading their investments away from the corrupt manipulation. While the participants have emphasis the necessity of the establishment of stock exchange market as a funding source and creation of trust among investors, the symposium called on the private sectors to establish the Social Security Net for offering services to the society.
This means that the relationship between the state and the private sectors must be in an integration form leading to investment partnership and offering equal services to the society in return for improving a stable investment environment in Yemen.