Iraq war could hit Yemen’s economy hard [Archives:2003/628/Local News]

By Mohammed Bin Sallam
and Yasser Al-Mayasi
Yemen Times Staff
What loss could this war hovering on our region cause Yemen? Taking the financial aspect of it in view; economic specialists and analysts in Al-Jazeera Channel last Tuesday predicted losses during the first ten months after the American attack against Iraq.
The specialists say that war consequences will reach all sectors of the Yemeni economy. The economy was already affected for two years due to the attack on the American warship USS Cole's in October 2000, then the September 11, 2001 attack and then the Limburge explosion in October 2002.
The danger- as the analysts say, would come as a result of the decline in oil prices which could reach US$ 8-12 per barrel, an objective of the American war anyway.
Al-Jazeera added saying that consequences of the decline of price oil are lower economic growth rate, more inflation, larger deficiency in the commercial expenditure because of the dependency on the oil resources.
Also the effects on tourism and less investments would lead to greater unemployment and deterioration in the exchange rate of the local currency, increase in prices of goods, costs of production and insurance value.
An official census mentioned that Yemen's loss due to stopping existing investment projects would reach US 500 million.
The investment rate in Yemen has already decreased by more than 60% since the terrorist events. And investments in the service sector have decreased by more than 35% and in the agriculture by more than 40%, and a massive decline of 90% in the tourism sector.
On a regional level the war on Iraq is predicted to influence negatively the relationship between Yemen and the GC countries, and that the bilateral and group investments which could have materialized without the war would remain in question during the war and perhaps to a long time post it.
Abdulqader Ba-Jammal Prime Minster, said last Wednesday that the financial and economic situation is stable in Yemen and that the country has the resources to cover the deficiency and all the markets requirements of products such as food, medicine and petrol.
He said that more order and organization is required to maintain stability and that monitoring in the coming period would be more strict especially on the local level.
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