Local Councils to Develop Small Enterprises [Archives:2002/02/Reportage]

January 7 2002

Farook al-kamali
Yemen Times
In his meeting last Tuesday with the officials in Aden, Abyan, and Lahj, the President gave his orders to the local councils to practice their role in development, alleviating poverty and unemployment and creating job opportunities for the people.
The local councils and their role in the development of the national economy was the main topic of discussions during the two-day Horizons of the Local Development Workshop kicked off on December 30 in Taiz.
Dr. Mohammed Ibrahim, Director of the Future Studies Center at the University of Asyoot emphasized, in his working paper, on the important and significant role the local councils could play in the development of the national economy by means of encouraging small enterprises. Recent studies show that a good number of poor Yemenis are more interested in some technical professions such as maintenance, plumbing, etc., (23 percent), small projects such as owning taxis, restaurants, cafes, etc. (9 percent), bee-keeping, etc. (27 percent) than in other economic activities and/or governmental jobs, he said.
The non-organized sector in Yemen comprises two different kinds of economic activities. The first kind is the management of small enterprises that employ 1-5 people such as handcraft shops, cafes, car maintenance workshops, barbers etc. The other type includes activities of people who are economically active outside institutions such as cottage industry, peddling, part time jobs of government workers like driving taxis, etc.
The number of economically active people in the non-organized sector with exception for those working in the agricultural sector is estimated at 35 percent out of the total number of economically active people in the country. The micro enterprises (1-2 employees) seem to greatly dominate the structure of small enterprises by forming about 85 percent in the urban cities and about 94 percent in the countryside. Similarly, the small enterprises (1-4 employees) constituted about 95 percent of the total industrial institutions in 1999. The pavement economy has greatly spread and widened since the 1980s, especially during the last five years, which shows that the non-organized sector in Yemen has developed a big identity. Ignoring and neglecting this sector may lead to the loss of a golden opportunity to develop this sector and consequently, will lead to the augmentation of the economic problems, specially after the failure of the public sector to provide all necessary economic and social needs for a great number of the poor and unemployed people.
In this respect, the local councils seem to be capable of adopting new policies to develop the non-organized sector. Dr. Ibrahim proposed several policies to encourage small enterprises. He also proposed to establish producer’s cooperatives and adopt new legislative and financing policies entrusted with granting loans to small enterprises.
In his working paper, Dr Ibrahim placed great stress on the leading role of local councils to improve small enterprises which, he said, could be achieved through encouraging the expanding of such small institutions. He also called for overcoming difficulties encountering the development of such institutions.