OPINIONThe 2007 price hike [Archives:2007/1013/Business & Economy]

January 4 2007

Raidan A. Al-Saqqaf
[email protected]

2006 was a good year, the YemenTimes won three international awards, Yemen demonstrated that it has become a high-development democracy, the donors' conference met its targets and reforms on almost every level were undergone. 2006 made me more optimistic about my 2007 resolution; perhaps I can achieve more on my personal level as well as advance my career even further.

I am an economist by training; undergoing my PhD in Economic development with the University of Nottingham, I am also a journalist by profession, I was mentored into this profession by my late father, Prof. Abdulaziz Al-Saqqaf, and more than six years down that road I find my self standing today, with a prediction that the next six years will be lucky for me as I start reaping the fruits of my academic hard work and built-up experience.

For Yemen, however, 2007 is predicted to be less lucky. Tensions between the government and the privet sector on the issue of sales tax which the government aims at imposing from January 1st, while the privet sector and the business community insists that the new tax regulation be delayed until the mattered is settled. Mahfoudh Shammakh, director of the Sana'a Chamber of commerce has indicated that unless the government negotiated with the business community the mechanism to renegotiate the disputed legislation and the mechanism of enforcing it then a total freeze of business operations in protest. He emphasized that the objection isn't on the theory of the legislation, but the objection is on the mechanism of enforcement.

The law was initially passed in 2001, however, it continues to be stalled, discussed and negotiated seemingly towards the stand-off of today, it's either the government will stall the legislation for another year to disuses its implementation even further with the business community or another price hike, this time to compensate for the new sales tax.

President Saleh got time and again involved with the issue, ordering the delay of the execution of the legislation in 2005 in order to be restudied and further discussed with the privet sector to get their consent, however, the prime minister looks like if he has made up his mind that the execution will take place and the business community have made it clear that any increases will directly come out of consumers' pockets. What a way to begin the year.