Plans to Improve Economic Performance in the Wake of September 11 Attacks [Archives:2001/47/Business & Economy]

November 19 2001

Mahyoub Al-Kamali
The Yemeni government is currently assessing the impact of September 11 attacks on Yemeni economy by launching new economic policies aimed at reduce the negative consequences of the attacks on New York and Washington as well as the current war against Afghanistan. Essentially, these two events caused a drop in oil prices at the international markets, the decline in investment flows, and a sharp decrease of tourism in Yemen.
Undoubtedly, one of the most important issue, which affects the economy of the Republic of Yemen, is the fact that there will be a rise in air and sea transportation charges. These are due to the increase of insurance charges in light of some reports describing Yemen as one of the unsafest countries in the Middle East. According to official sources, the Yemeni government will freeze some of the big development projects dependent on oil revenues and will work out on new promotional plans to revive the tourism sector.
The overall losses incurred in Yemen since 11 September attacks are estimated at over US$ 3 billion in the oil, tourism, services and investments sectors. Despite the effort exerted by the Yemeni government to diversify its revenues, 95% of the budget still depends on oil revenues.
As a part of new solutions proposed by Yemen Airways (Yemenia) to tackle the disastrous consequences of the attacks on WTC and the Pentagon, the airline is to expand its operation lines to cope with the rise in number of passengers to and from Yemen. Furthermore, Yemenia is planning to operate flights, as of the beginning of January 2002, to Kuala Lumpur and Jakarta where 5 million Yemenis live. In the wake of September 11 attacks, Yemenia Airways had to cancel contracts to transport 60,000 tourists from Europe and the United States.

New Tourism Promotion Plans
The Tourism Promotion Board has prepared an urgent plan totaling YR 130 million to reduce the decline in tourism revenues. The plan principally aims at putting an end to kidnappings of foreign tourists in Yemen and adopting new policies which deal with tourist markets and encourage a stronger presence in the markets of the Gulf countries and Southeast Asia. In addition, the Cabinet approved the tourism promotion plan which includes using Arabic and international satellite channels in order to attract more tourists in Yemen. The successful achievement of the new tourism plan’s goals will depend on winning the confidence of tourists to come to Yemen and visit its unique historical monuments and antiquities.
Concerning the security measures, the plan will provide the Tourism Police modern means of transportation as well as re-deploying them at the main tourist attractions. For this end, YR 20 million have been allocated by the government in addition to another YR 5 million earmarked to support the personnel of the tourism police and give them up-to-date equipment.
According to some sources at the Tourism Promotion Board, the plan relies on two priorities: first, to raise the citizens’ awareness of the importance of tourism as an economic source; second, to work for activating the touristic installations in a drive to counter the recession effect in the tourism sector.

Activating Domestic Tourism
The tourism plan focuses on activating seasonal domestic tourism and popular festivals as well in cities, that attracts the majority of Yemeni tourists, like Husainyyah, Seyoun, Aden, Sana’a, Mukala, Hudaidah, and others.
It is clear that activating tourism in Yemen requires a strategic plan oriented towards its expansion. Likewise, reforming the economic situation and attracting a large number of investors in the tourism sector require efficient policies that can efficiently promote the country and increase therefore the flow of tourists in Yemen. Ultimately, the Yemeni economy requires a continued review of its performance in various activities, rather than emergency remedies for the negative consequences of September 11 attacks as partial plans always face hassles upon implementation.