Saudi Dumping Trade Policies Hurt an Already Troubled Yemeni Industry [Archives:1998/33/Business & Economy]

A number of leading Yemenis businessmen and industrialists, representing four Yemeni chambers of commerce and industry (Sanaa, Taiz, Hodeida, and Aden) and the Association of Yemeni Industrialists, went to see Prime Minister Abdulkarim Al-Iryani. They presented him with a list of factories that were closed down over the last two years, and some more that could by shut down before this year is over. “We estimate that some 5,000 more employees will lose their jobs, and the government will lose some YR 2.4 billion in taxes, and the loss of income (value added) to the Yemeni economy is around YR 12 billion,” said a spokesman for the Sanaa Chamber of Commerce. Those figures do not include externalities and linkage effects.
Yemen’s industrialists are complaining about the inapporpriate government policies. The government media is working against the interests of the country. “All over the world, the national media is supportive of any local production. Here in Yemen, senior media personalities openly and on the air belittle Yemeni products,” said Abdul-Wassa Hayel Saeed, executive director of the Hayel Saeed Group of Companies.
“Our officials have the wrong concept of free trade and free enterprise. They think that free trade means chaos. We see goods in Yemen that have expired or about to expire being brought in at a fraction of the cost, thus killing us in the market,” said Abdul-Wahab Thabet, executive director of the Thabet Brothers Group of Companies.
In another meeting with Mr. Abdulaziz Abdulghani, Chairman of the Consultative Council, Mr. Mohammed Hassan Zubairi, Vice Chairman of the Federation of Yemeni Chambers of Commerce and Industry, urged for action, regarding Saudi dumping policies. “We are not asking for controls. We are asking for reciprocal treatment and fair trade,” he insisted. I can offer you proof after another that there is unfair trade policies.
Mr. Thabet also demanded that Yemeni authorities simply uphold the law. “For example, how come goods that had been shipped from their country of origin are dumped in a third country and then trans-shipped to us much later,” he asked.
Abdul-Galeel Radman, chairman and owner of Nana products went on to explain factor costs and other cost elements. “In Saudi Arabia, an investor gets a free plot of land, with all utilities and infrastructure. In addition, an investor is provided 60% of his capital expenditures in soft loans. Now compare that to our situation. An investor has to pay for all utilities, infrastructure, land, etc. It is part of the project cost. Now, how can you have a fair competition between the two producers.”
The industrialists circulated a letter with statistics showing that the Yemeni market is now flooded with cheap, low-quality goods imported or even smuggled from neighboring countries, taking advantage of the lax border patrols. This reflected negatively on investments within the country, leading to rising unemployment and the foundering of the local industry.’
The letter cited other countries in the region with expanding economies such as Egypt, Jordan, Morocco and Tunisia, which provide a lot of tax protection for their local industry and a well-developed infrastructure to entice potential investors. A good infrastructure helps a lot in decreasing a given project’s overheads. ‘In Yemen, an investor has to cough-up a lot of money just to get the basics such as electricity and water supplies,’ complained the Yemeni businessmen. Protection is also provided by the US and EU countries for their local industries.
‘We know that the policies of the World Bank and World Trade Organization do not necessarily stipulate the removal of protection from national economies and investments. These policies also call for regulating imports so as not to harm local resources, both material and human. For a local economy to get integrated into the world market, long periods of adjustment are allowed both international organizations. ‘However, our running to prematurely achieve what is in essence a future goal has turned Yemen into a consumer market in which others flog their goods.’
The Yemeni industrialists made the following demands:
1- Protection from unequal and unfair competition must be provided by the state. Customs tariffs and taxation laws, especially those concerning production and consumption, must be reviewed.
2- A policy must be formulated to achieve equality with foreign competition, whether in connection with the local market or exports.
3- Investment incentives should be provided.
4- Yemeni trade marks and patents must be protected from foreign imitations.
CRISIS OF YEMENI INDUSTRIES Shut Down or Foundering Factories 1) Dry Battery Factory, Sanaa
2) Ardh Al-Jannatain Industrial Complex, Sanaa
3) Diapers Company, Sanaa
4) Ready-Made Garments Factory, Sanaa
5) Carpets and Floor rugs Company, Sanaa
6) Blankets Factory, Sanaa
7) Azal Shoe Factory, Sanaa
8) National Factory for School Bags and Belts, Aden
9) Sponge Factory, Aden
10) Yemen Company for Plastic Products, 
Aden
11) United Company for Metal products, Aden
12) Nail Factory, Aden
13) Perfumeries Factory, Aden
14) Shoe Factory, Aden
15) Welding Material Factory, Aden
16) Paper Bags Factory, Taiz
17) National Company for Perfume Production, Taiz
18) Yemen Copany for Car Oil, Taiz
19) Bilquis Factory for Biscuits and Confectionery, Taiz
20) Al-Arabiyah Al-Saeedah Factories, Taiz
21) Diapers and Cosmetics Factory, Taiz
22) Electric Cables Plant, Taiz
23) Bilquis for Industrial Development Company, Taiz
24) Factory for Electrical Appliances, Taiz
25) Chloride Batteries Factory, Taiz
26) Al-Ghannamy Industrial Group, Taiz
27) Manufactured Foodstuffs Complex, Taiz
28) Bottled Water Company – Sihhah, Taiz
29) Dates Factory, Taiz
30) Liquid Batteries Plant, Hodeidah
31) Perfume Factory, Hodeidah
32) Al-Shallal Water Bottling Plant, Hodeidah
33) Sesame Oil Factory, Hodeidah
34) Adhban Industries for Agricultural Equipment, Hodeidah
35) Shoe Factory, Khamer Closed Down
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