Needs diversification, smaller deficit Pulling Yemen’s economy from its pit [Archives:2002/50/Business & Economy]

BY YEMEN TIMES STAFF
For Yemen’s economy to grow, the country needs to be less dependant on oil and more on commodities such as agriculture.
It needs to end its deficit and also limit interest on foreign debts. From indicators of annual growth, it seems that economic policies depend on oil revenues without paying attention to productive sectors that can develop a base of strong income and gross national product.
Agricultural sector
Investment plans in the coming years need to be directed to development of the agricultural sector and animal wealth in percentages exceeding what is planned for in the second of the five-year plan, whose percentage is fixed between 2.3% to 4.6% including the gross national product.
There is a need to increase production of cereals, fruits and vegetables for the purpose of moving toward self-sufficiency and a trade surplus.
The present reality of agricultural production causes the national economy to lose millions of dollars, spent on the importation of food, agriculture cans and animal products which weakens the volume of domestic production in agricultural and animal areas.
Thus there is an urgent need for investment in agriculture and in increasing the animal wealth. Steps that must be taken include:
-improving sowing seeds,
-providing plants capable of adapting to the Yemeni agricultural environment,
-increase production of plants such as cotton, coffee and grapes,
-establishing new centers for marketing and exporting,
-providing modern means of transport, as well as building up-to-date factories for animal wealth products and looking for external markets for them,
-finding alternatives to the qat tree and bringing forward suitable solutions giving incomes to those now working in planting the qat tree.
Ports
Investment plans should also be directed to building industrial and productive zones in Yemeni seaports and coasts. especially those proper for investment and establishing a productive base founded on local materials as factories for fish canning and building centres for re-exportation and others for activating tourism on beaches by building tourist hotels, beach cabins and centres for practicing diving.
But tourist investment in beaches and ports requires taking strict measures for securing transport in the regional waters and restoring confidence for vessels and tankers in the security atmospheres in Yemen and its ports and coasts.
Improving the security reputation would facilitate attraction of industrial activities.
It would help establish modern industrial towns, intensified work opportunities, population migration from cities and densely populated capital towards the new industrial regions, activate internal marketing and link it to external trade and exploitation of fish and mineral wealth available on both sides of Yemeni coasts, and to export them to world markets.
Therefore, there must a drawing up of the requirements of ports and coasts infrastructures, and diversifying the base of the national economy.
According to economic experts concepts this trend would create for residents new areas of work and would urge them to discard qat farming.
The governorates far from the coasts and sea ports could in turn play a prolific part in supplying the new industrial areas with materials necessary for the new activities there. And this would create a kind of economic integration and development of the national economy in addition to utilization of mineral riches.
This economic vision proceeds from an accurate diagnosis of economic indications over the past years. Those indications have disclosed weakness of outputs depending on oil and foreign loans for solving development and social crises.
Yemen has opportunities for attracting investments especially by expatriates.
Economic experts also think that the yearly plans within the second year of the five-year plan from 2001-2005 are not able to attain a real development proportion in the gross national product because they can’t be accomplished on the ground. The budget suffers from an incurable deficit and external aid is not allotted for strategic projects, but they rather go to social fields to ease the pressure of negative outcomes from the economic reforms.

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