Market Economy In Yemen [Archives:2000/48/Business & Economy]

Since the economic reform program was launched in 1995 a number of commercial and financial policies and procedures have been taken under the pretext of moving towards the market economy which has been solely directed and guided by the government. The private sector has so far been away from controlling supply and demands. Investment and development projects, administration of foreign trade, directing banking dealings in accordance with the available ready finance are still part of the government activities or those of mixed and cooperative sectors. The market economy requires opening the doors for traders and businessmen to mobilize investment and commercial projects without administrative complications.
The government has achieved some positive results in liberalization of products and oil derivatives prices and fixation of national current rate. However, there has been no sense of commercial competition among trade sectors. A large part of profits is going to small trade companies that cannot greatly contribute to a stock exchange.
Peoples purchase power has been affected by this tendency. Prices of imported products zoomed up after the government enhanced taxation by 40 billion rials in 1999. At the same time prices of the local products hiked more under the pretext of rising taxation on factories and local companies. By this the private sector has lost the chance to present competitive prices for the consumers while the market is full of smuggled goods.
Traders and businessmen think that the governments tendency towards the economy market has not entailed a comprehensive partnership between the state and the private sector in the commercial, development projects and administration of joint investment projects. They add that the government depends on the central planning to manage investment projects which weakens the national capitals that can not move towards the market economy.
The private sector thus must be more backed up to improve its situation within the framework of moving towards the market economy.

——
[archive-e:48-v:2000-y:2000-d:2000-11-27-p:./2000/iss48/b&e.htm]