Reflection on 2005 and challenges aheadYemen: On the road to future [Archives:2006/908/Front Page]

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January 2 2006

Irena Knehtl
[email protected]

There is not easy walk to freedom anywhere and many of us will have to pass through the valley of the shadow of death again and again before we reach the mountains of our desires.

Nelson Mandela

This is a time to take a fleeting moment and reflect on what has happened to the world in 2005, and imagine how things are going to develop in 2006 and beyond. Here is summary of the main issues likely to challenge in the years ahead.

The regular appearance of China, India and OPEC in headlines all year emphasize the shift in economic power from North America and Europe to the Middle East and Asia. The challenge for Yemen, in particular, is to stand on its own two feet in the global economy and ensure that Yemenis will share in the benefits of the shift away from the developed world. In addition we can also expect geographic shifts in military power. Although it affects all of us, governance does not feature as much in the debate as it should.

With the cold war behind, we can already see the tussle taking place between democracy and human rights on the one hand and greed, corruption and tyranny on the other with international bodies increasingly unable to act when it matters most. We can hope that the freer flow of information will prevent the situation getting worse. While there's a hum of excitement about today's convergence of technologies – mobile phones, computers, TV, radio, camera and more – the really exciting part is yet to come where applications such as banking and buying and selling of shares and goods become universal with no need for a physical stock exchange, shop or bank. An huge increase in productivity – the USA this week reported a 4.5% productivity increase for the past year – could mean that those employed produce all that is necessary. Yet at the same time, the oil industry records shortage of engineering skills and US universities point to drops in science and engineering graduates. The move of manufacturing and services of increasingly complexity to the low cost areas of the world and the migration of people with initiative to where they can make a better living for their families. The HIV/Aids continues to take its toll, specially in developing world. Those left behind are leading longer lives putting a strain on both government, pension and health care funds. While working longer might be a partial solution, the developed world, despite all its financial and intellectual resources, is battling to get to grips with this problem.

The sky-rocketing crude oil price in 2005 served as a warning that oil and gas are finite resources and will certainly run out some time in the future. Over the past 20 years, the world's proven oil reserves have increased by 56% to 1187 thousand million barrels, enough to last the world another 40 years at current production or 22 years if growth continues at the same 4.5% rate as 2004 and no more oil is found. The debate surrounds the merits of alternative energy sources. There is, however, not enough discussion about new feed stocks for the petrochemical industry. Ironically, just as carbon starts becoming too expensive to burn, the related issue of Global Warming has started moving to centre stage. Reports are aplenty of melting ice-caps and glaciers and regions which will be hotter, colder, wetter and drier. The issue is of key importance to the future of life on the continent. World governments seem at last to be taking global warming seriously. Developing nations including Yemen are expected to be hardest hit by global warming. On the medical front, there were hints of progress in finding vaccines and cures for malaria and HIV/Aids, two diseases which have a debilitating impact.

The oil price shot from a level around USD 25 (Dec 2004) a barrel to trade in a zone between USD 40 and USD 50 with experts predicting prices will stay there. Others are pointing to the rise of the Euro which, for the first time is competitor to the US Dollar as a global investment currency. These are moves over which the developing countries, including Yemen, have little control but which impact them greatly. Perhaps the most significant tilt was that away from the economies of North America and Europe to China, India and the OPEC members, who, in partnership with Brazil, Nigeria and South Africa, are starting to have a major impact in world trade and politics. In Africa, for example, the Chinese and Indian companies follow Malaysian companies in trying up mineral and energy resources in competition with the multinationals. Further Western attitudes towards Iran for having the same nuclear capability as France or Israel. The body count of invasion force soldiers killed in Iraq, while the numbers of local civilian casualties goes unaccounted. Strikes in Nigeria or Venezuela, the war in Iraq, hurricanes in the Gulf of Mexico, and shortage of global refining capacity. At first glance, the high oil prices were been good news for the Middle East and Africa.

The Middle East, however, is not a single homogeneous country. And further, the income from oil sales does not all return to the oil producing nations, among which Yemen, while each economy does indeed pay for what is imported and consumed. A combination of tax and interests of national oil companies nets oil producing countries 40 percent of the sale price. Some oil producing government are attempting to renegotiate their contacts with the oil companies in order to get a bigger portion of the higher oil prices. While the “oil rich” will take the cash, the “poor” will be hoping more will follow the example of Venezuela in providing subsidized fuel to less fortunate neighbors. A major reason for the high oil price is the increased demand coming from the Chinese economy. Over the last few month, Chinese oil companies have been very active in bidding for oil concession in Africa, notably West Africa, Nigeria, Sudan and they are poised to be given a major stake in Zimbabwes electrical power sector. The events in the Ukraine made alter the power of the people. In the global energy and mineral scenes, the booming economies of China and India are competing more and more with the G8 countries for resources. African, Asian and Middle Eastern energy and minerals producers are already starting to capitalize on these global division. Over the last months India has announced projects to bring oil or gas from Iran via Pakistan, from Myammar, via Bangladesh and from Russia. China is competing with Japan for deliveries from a Russian pipeline and is looking to Iran for LNG. Venezuela, a major oil source for the USA, is looking at ways to divert supplies to China and Iran. There have also been warnings that Europe is becoming too dependent on Russia for gas supplies.

One gets the impression Europe does not have a strategy for maintaining a competitive advantage in a world dominated by Middle East oil, Chinese manufacturing and Indian service centers. After completing the enlargement of the European Union on the continent and the Balkans, the natural space for continuation of this unification will be the Mediterranean region, its southern and eastern par, Northern Africa and the Middle East. The European Union continually, step by step, develops its framework of cooperation (bilateral, multilateral relations, association and cooperation agreements, dialogues, partnerships, cooperation programs, regional policies, strategies, ministirial conferences, documents). The Union, for example, plans to create the Euro- Mediterranean Free Trade Area by the year 2010. This framework continues east, to the region of the Persian Gulf. Natural limit of this process will be the desert belt in the south (Sahara, Nafud, Dahna, Thair), somewhere interrupted by seas (Red Sea, Gulf of Aden, Persian Gulf, Gulf of Oman).

Weather inside or outside, a partnership with an potential economically united Arab world is increasingly in Europe`s interest, to help Arabs to realize their economic potential. The potential for partnership lies in continuing liberalizing of their economies more and managed them more efficiently. European investors no longer seek exceptionally high profits, and fast return, but such enduring values as culture. The oil and gas industry has lost much of its political prominence. It has been eclipsed by a new e-economy and telecommunications. However, e-commerce should never remain confirmed only to network, telecommunications, computers, and the media, and or markets. But rendering it human and on consolidating of democratic space. It is culture that provides us with values and identity, enabling us to cope with challenges and changes in expanding relationship with an increased united Europe and a potentially economically united Arab world. It is culture that reserves the right to be different, and an instruments of opportunity and inclusions on our terms. Thus the model for a new Euro-Arab economic partnership would be one of joint marketing exploration and exploration and approach, establishing of joint transport and logistical routes, product distribution centers, etc.

Open your eyes, it is time to fly

I understand Yemen from position of syntheses of dreams, as an oasis in the flow of world events. Similar geo- strategic position in the world to that of Yemen have Central Asia, Asia Minor, and Central Europe (Slovenia/Austria). In ancient times, the people of South Arabia were the paramount mariners in the Indian Ocean. Their function in the economy of this huge area was in some way comparable to that of the Phoenicians and Carthaginians in the Mediterranean. Yemen was itself a producer of valuable gums and aromatics, particularly frankincense and myrrh, much sought after by all the empires of the time. Yemen also had a flourishing agriculture based on sophisticated techniques of water management. This was because Yemen just catches the edge of the monsoon, giving it a higher rainfall than the rest of the Arabian Peninsula and permitting intensive agriculture and the growth of centralized states. Yemen was also a key area in the transmission of various food plants between India and Africa. From the middle of the first millennium BC, Yemenis dominated the carrying trade in the western Indian Ocean, a position it held until modern times. This kind of historical continuity is rare and is one of the most astonishing things in the history of the Indian Ocean.

Unlike a functional family, a nation is a team which symbolizes the ideal of human interdependence, and has long provided a firm foundation for society. The healthy family is a microcosm of society and the native soil in which ethical values take root and grow. Fertilize this soil, and the whole of society benefits. The power which bonds a “family” or nation together is the ancient feminine principle no longer honored in modern times – gentleness and receptivity. Relationships in all kinds of teams are improved through cultivation of this principle. The receptive force is sensual as well as powerful, and it can be missed by too much talk and planning. When spring comes, does the grass “plan” to grow? This is a time to concentrate on realities realties rather than potential – with how to response to a situation rather than how to direct it. To be broad and deep, receptive and spacious like the ocean. It is by recognizing and riding with the natural course of events – by hitching the wagon of development to the rising sun, as it were – that we advance our position and earn respect. The concern is that in the rush to tap Yemen`s raw materials, human rights and good governance, should not be trampled underfoot. When the path of the weaker aligns with that with that which is strong, a dynamic balance can be strike between involvement in the outside world and nourishment in the home. Only by adapting to change can we stay in the race. Yemen is big enough to embrace all its citizens, and misses them too. Like deserts misses rain, like eye misses the light after long darkness.

This century belongs to Asia in terms of economic development and political development. The challenge for 21st century is to dismantle the “big” and develop the people: services, education, prosperity and social justice will be the issues. The self-government, both institutional and non – institutional is to fulfill its mission that is all apart from the general spirit, needs assistance. Not a command but recommendation how to think, speak and mainly to act or not. To educate ourselves to much greater extend in the use of freedom.

Innovation is the key success behind all successful firms, undertaking and countries. Being innovative means, however, more than just having good ideas. In the fast changing environment innovation is not just a matter of export profitability, it can be a matter of survival. It is innovations that will allow companies and countries to thrive and survive. In a global economy is the harvesting the power of innovations the central theme. Technology enables, but creativity, flexibility and the intelligent use of information will win the future. In an another era, a nations most valuable assets were its natural resources – coal, or amber waves of grain. But in the information economy of the 21st century, the most priceless resource is often an idea, along with the right to profit from it. When the other day, I ventured for shopping to Old city of Sanaa, awash with tourists and visitors, I could not but reflect that I am privileged to live in one of the most beautiful, fascinating and challenging city.
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