New Blow to Economic Well-Being [Archives:1999/17/Front Page]

Yemen Times sources are seeing more ominous clouds on the horizon for the Yemeni economy. Following the near-total collapse of the middle class (small/medium enterprises & businesses), there are now signs of serious cracks in the big business families of Yemen.
According to the final accounts of the Hayel Saeed Group of Companies (HSA), the Yemeni part of the business has suffered enormous losses in 1998. The Group’s Yemeni business reported major losses in the Yemen operations, though the overall performance of the group – including international interests – was profitable. “We cannot continue in this way. It is not good for us, and it is not good for the country,” explained a leading member of the group. As a result, the Group is expected to lay off nearly 1,500 employees over the next few weeks. The HSA employs roughly 10,000 persons, mostly in their Taiz factories.
Another family business group, the Thabet Brothers, saw their Yemeni profits cut in half, falling to almost negligible levels. Here again, return on the group’s foreign investments has been high, thus more than making up for the loss in the Yemeni operations. The logical conclusion from such developments is that Yemeni investors may find it more profitable to invest abroad, rather than in their own country. According to an international expert, “The authorities should take decisive measures in support of local investments. That is not happening at this time.”
Local industrial and service activities suffer from pervasive smuggling, as well as from unfair competition, nepotism and favoritism leading to the rise of a new upper class connected to the power structure. “Unless these elements are checked, there is no reason for us to invest in this country,” said one key investor.
——
[archive-e:17-v:1999-y:1999-d:1999-04-26-p:./1999/iss17/front.htm]