InvestmentRequirements and demands [Archives:2004/699/Business & Economy]

January 1 2004

What does investment in Yemen want and would the issued legislation achieve aspired expectations of capitals for the realization of investment projects and help in providing job opportunities for the unemployed workforce? These are some of many questions that seem related to the investment climate suitable for business administration, building development and services projects and erecting industrial and tourist installations.
Capitalists believe that legislation pertaining to offering facilities to investors is very important to encourage the private sector to embark on building economic-valued projects contributing to increase of production and development of exports. But the legislation needs easy mechanisms for carrying out away from bureaucratic complications and the so-called administrative red-tape that delays the speed in accomplishing the projects.
Capitalists and businessmen believe that technically the investment climate in Yemen is lacking required mechanisms to help the private sector invest its money, build up it and get profits at a record time and that the government measures have participated up till now in:
-founding an infrastructure such as roads and services of electricity and water but they are still confined to the capital, the port of Aden and some big cities like Taiz, Hudeidah and Hadramout,
-working out a law for investment that has been subjected to several amendments and then there have been some taxation and customs exemptions granted to investment projects according to the law,
-setting up some studies on feasibility of projects that constitute investment opportunities but other opportunities are in need of studies and promotion among the circles of local and foreign investors.
Investment circles sources say the problem that impedes the investment movement in Yemen is attributed to weakness in performance by authorities in charge of organizing and granting investment projects licenses and that is because of administrative complications prevalent in those authorities. The sources add that this situation has encouraged some trading elements to obtain licenses for building projects aimed at getting gains by exploiting exempts granted to investors and restricting their activities to importing materials under the name of projects while at the end would not implement those projects on the ground.
What calls the attention here is that some middlemen get big customs and tax exempts and they exploit them for their own interest and not for implementation of projects that have been licensed.
The other problem that hinders finishing investment projects' works is shown in the middlemen resorting to cheating ways for winning permits pertaining to investment projects just for speedy gains without executing them. Some of them set conditions for building projects by using external capitals because they do not possess financial assets. Here emerges a highly complicated problem as the local and foreign private sectors are trying to evade from the process of joint investment, especially with investment middlemen.
Capitalists and businessmen say the investment climate n Yemen gains relative success for their projects because intruders in the business of investment try to dominate the investment situation and monopolize projects of economic feasibility.
Nevertheless many businessmen are endeavouring to introduce themselves as an effective force in investment field through entering in competition with modest potentials a matter which negatively affects the movement of investments in the country.
We emphasize in this regard that the successful investment requires pushing of investment middlemen away from it. Capitalists and businessmen also demand the removal of administrative bureaucracy from the departments concerned with granting investment licenses and facilitate for them getting tax and customs exempts without hindrances.