Is it an election ploy? Government wants talks with private sector [Archives:2003/08/Business & Economy]

February 24 2003

The Yemeni government has called for dialogue with the private sector to try to find solutions to economic problems, and to work on improving production.
The dialogue also aims at utilizing facilities offered to investors to develop exports and surmount negative features of marketing. Prime Minister Abdulqader ba Jammal says the purpose of dialogue is to encourage investment projects and help businessmen get acquainted with economic measures the government will take for the improvement of economic performance in general.
The invitation to dialogue comes after a drop in the private sector’s production and weakness of the national economy.
All that happens despite that the state’s continual work for developing investment legislation.
Nevertheless, the government dialogue with the private sector comes under circumstances, investors deem as complicated. Investors have based say the causes are:
a) an absence of transparency in economic decisions taken by the government,
b) no development and reform achieved in judiciary system for resolving trade disputes,
c) heavy taxes on private industrial sector,
d) increases in electricity bill prices,
e) weakness of free market structure,
f) domination of bureaucracy on measures of parties granting investment licenses.
For these reasons the private sector has became weak especially for the establishment of effective partnerships in governmental investment.
Private sector capitalists have failed to gain profitable results from their industrial, agricultural activities and to invigorate exports.
Hence, there is a failure of government administration in managing its investment plans and that has negative effects on the performance of the private sector.
The gap of confidence has widened between the two groups, and dialogue, aimed to mend bridges and combine the two sides’ interests, has become hard due to the approach of the scheduled parliamentary elections.
The implied objective of such a government move could be alleviation of acuteness of the economic crisis to an extent to realize a face-saving image before voters.
Also, the government is willing to give promises to private sector concerning preparation of proper circumstances for investment following the elections, adopting economic measures and offering investment facilities to investors.
It is predicted that the proposed dialogue would be entangled, leading to more losses among investors and public sector businessmen.
Meanwhile, the government would extend support to capitalists and businessmen having close interests with it.