Prospects on increasing Gulf investments in Yemen [Archives:2002/34/Business & Economy]

BY MAHYOUB AL-KAMALY
The Yemen State Authority for Investment (YSAI) expects an influx of GCC capitals into Yemen for investment, especially following issuance of the new investment law that cancelled the former system of granting permits for investment that was causing problems to businessmen. Sources at the Authority mentioned that the difficulties and inconveniences the Gulf investors are facing in Western countries and the United States would urge them to divert their capitals for investment in Yemen and to benefit from privileges and facilities and guarantees the new law offers to foreign investors in Yemen.
A major target stipulated in the amended investment law is encouragement of domestic agricultural and industrial production and developing Yemeni exports to foreign markets.
Chairman of the State Authority for Investment Abdulkarim Mutair confirms that the law curbs interferences of the Authority and some other parties in affairs and work of investment projects.
The process of granting licenses was impeding investors obtaining of official agreement on building their project as it had fixed a short period of time for completing its procedures. That has consequently resulted in delaying investment processes and hindering the finishing of projects.
In order to enforce the amended law the YSAI works on finishing the drawing up of regulations for applying the law, and that would put an end to the duality that was existing. That duality was represented by interference by several sides in dealing with local, Arab and foreign investors.
YSAI statistics demonstrate that the number of investment projects licensed in the capital and governorates since March 1992 till the end of 2001 reached more than 5000. During that period the YSAI had cancelled permits for 882 projects after it had been found out that their owners were not so serious about building them, while the number of executed investment projects were 1346. The percentage of implemented projects amounted to 42, 8 % at a cost of YR 129 billion, 134 million and 692 thousand. The number of job opportunities created by those executed projects reached 126,976 for local labor and 1801 for foreign labor. The total cost of licensed projects for the past ten years has amounted to YR 521 billion, 371 million and 776 thousand.
As regards the licensed projects, the industrial sector comes in the first place (702) projects, the second is the services sector (351) projects and the third rank is agricultural and fish industry sector (116) projects.
It is to be noted that foreign investment projects constitute 8% of total licensed projects, 3,3% are joint Yemeni-foreign projects, and 4,7% foreign projects. Circles concerned with promotion for investment attribute the drop in amount of foreign investments to negative sides of the former law and bureaucracy that prevailed on procedures for granting permits to foreign investors.
Investment sources confirm that there are many vital opportunities attracting Gulf investors, particularly at the Free Zone, in fields of traditional industries and building tourist facilities. The government of Yemen hopes for establishing active investment partnership with capitalists from the Gulf countries as part of its orientation towards strengthening its cooperation with the GCC countries, consolidation of Yemen relations with Gulf countries and realization of economic integration with the regions countries.

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