New strategy for investment in Yemen [Archives:2005/823/Business & Economy]
Mahyoub Al-Kamaly
Investment projects in Yemen have been successful in several sectors but there has been an overall failure in implementing strategic project licenses, which were granted to the private sector. Those licensed projects floundered in a way made the government think of reconsidering criteria of investment and think of entering new amendments on the law of investment.
According to evaluation of the course of the investment process, the reasons of some strategic projects floundering lie in the extent of the licensed sides' commitment to build new projects rather not in what the government had provided and what facilities the laws have offered to investors.
Official sources confirm that slowness of investment process in Yemen could be attributed to that some investors have got facilities to buy lands for investment but they did not erect projects on them and their owners changed into agents for selling those pieces of land and benefit from that transaction.
Some serious-minded investors demand establishment of vitally important productive projects absorbing the biggest number of the unemployed by finding legal outputs for the modernization and upgrading the investment map so that investment could be the more important provider of the development process in Yemen.
The Yemeni government says it intends to draw up new criteria to guarantee implementation of the licensed projects. Among those criteria to be proposed by the government are the prevention of trading with the pieces of land and putting an end to exploitation of facilities and customs and taxes exemptions by the persons who obtain licenses for projects, which then become unreal. According to some official data, there are persons who import materials such as steel, cement and other construction materials in the name of projects to be built but they change those materials to means for living and trading in the market.
One of the questions that led to lose the importance of investment process is that each side is dealing with the new projects with its own special way. Thus, the responsibility of the state authority of investment changed into just a party for registration and facilitating the task of exempts. Specialists clarify those matters by mentioning that the ministry of culture and tourism undertaking of the affairs of hotels and tourist complexes, the health ministry undertakes the matter of hospitals and clinics projects, the education ministry supervision on educational establishments and the state authority of investment dealing with investment requests in the free zone in Aden, contribute to shrink the role of the authority in following up accomplishment of licensed projects.
Despite of the state authority for investment responsibility for knowing and following up the level of projects implementation, the failure is clear in the performance of the authority's branches in the governorates with regard to follow-up preliminary supplies for the licensed projects and importation of equipment and supplies necessary for them.
To come out of this existing dilemma in the investment process, specialists believe in the necessity that the concerned parties have to introduce solutions for problems proved to be forming impediment against establishment of the licensed projects. They are:
– problems pertaining with pieces of land specified for the projects,-problems related to financing the projects,
– technical problems and others connected to taxes or failure of the infrastructure,
– providing information and economic studies for investors and facilitating procedures of the employment of foreign expertise,
– obliging the investors to abide by a time ceiling for the establishment of their projects on the pieces of land allotted for them.
It is certain that the responsibility for bringing to success the investment process in Yemen is common among official parties and the private sector. There is a suitable climate for activating the process as the government has provided services in the areas set aside for investment and taken measures against those who interrupt security. In addition, there are legal guarantees encouraging investors to use their properties successfully.
The concerned parties, especially the state authority of investment, must encounter those who seek to trade with investment licenses and prevent them from dealing with lands set for building productive projects. Such a task whose results would positively be reflected on economic and social development in Yemen.
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