New Opportunities to Develop National Industry [Archives:2001/42/Business & Economy]
Marketing experts believe that the local industrial sector has a good chance to increase its production of foodstuffs, home appliances and fashion to cover the needs of the local market owing to the high prices of imported goods as a result of the rise in US dollar prices.
The increase in the prices of imported goods following the September 11 events demands local alternatives at lower prices.
Increases in prices was accompanied by the Yemeni Riyal losing 3 percent of its value since September 11. Dollar exchange rate has mounted to YR 172 from YR 169 two months ago, leading to a 3 to 4 percent increase in the prices of imported goods.
Marketing analysts think that increasing production of local factories will help the private sector compete with the export sector and win consumers’ confidence. However, the industrial sector seems likely to be unable to improve its production due to the stagnant market and push on imports.
They also say that the bad performance of the industrial sector in Yemen started during the freeing of foreign trade, which was accompanied by a sharp decrease of national imports and production. Studies show that growth of the industrial sector is not improving because of the high cost of workers and fluctuation in the national currency exchange rate. Furthermore, neglecting the role of investment in improving industrial production also created a lot of problems for the local industry.
Industrial people accuse traders of creating a liquidity crisis by purchasing hard currencies which affects the available cash. Traders respond by saying that purchasing hard currencies enable them to continue dealing with foreign companies, which is a matter that always affects the national industry. However, market researchers recommended the industrial sector to activate demands on their products, attract foreign investors to local industry, direct resources to increase industrial production, and increase exports to foreign markets.
The government plans focus on increasing non-oil exports by an annual growth of 17.1 percent through promoting tourism and the Aden free trade zone.
Therefore, there is a chance for the industrial sector to increase its production under the current circumstances which make it difficult for importers to offer lower prices.