Since 2000 USS Cole blast: Terrorism slows Yemen’s economy more than ever [Archives:2002/51/Business & Economy]

December 16 2002

By Mahyoub al-Kamali
Yemen Times Staff
Yemen’s efforts for developing its promising economic sectors have collided with 9/11 and its fallout, including the American campaign on terror.
The Yemeni government found itself confronting terror even before Sept. 11, 2001, when a suicide bomber blasted the USS Cole in Aden in October 2000. The incident resulted in a decline of foreign investments at the Aden Free Zone and a tarnished reputation of the container port built by the Yemeni government to consolidate the country’s world commercial role and restore Aden as an active trade center.
Investors began to act slowly in establishing factories and installations necessary for the Free Zone. Even domestic capitals hesitated in embarking on investment in this region citing reasons of unstable security there.
The Cole explosion resulted also in abstention of tourists from visiting Yemen, considering it as harboring terrorists and tribal elements that were behind incidents of kidnapping foreigners.
Then the events of September 11 gave discomforts for Yemen heavier than the Cole incident, as the leader of al-Qaeda organisation Osama bin Laden has been linked to having origins in Hadramaout.
Yemeni authorities have intensified their security cooperation with the United States and demonstrated their credibility in the war against terror. But the Yemeni economy did not recover.
On the contrary it has been seriously affected by consequences of the American international campaign. Prime minister Abdulqader ba Jammal said that in the first year after 9/11 that his country has lost around one billion dollars.
He confirmed that a number of companies and some businessmen from western countries who had previously decided to invest in Yemeni economic sectors have frozen their investment projects following the September events, a matter that redoubled slowness of investment operations in the Aden Free Zone.
Problems of the Yemeni economy have also been aggravated more after the incident of the French oil tanker Limburg on Oct. 6. Official circles have estimated losses sustained by the Yemeni economy at YR 1.3 billion, or US $7.6 million a month.
The Limburg incident has also caused serious damage to fish wealth, damaged the coral reefs and caused death of fish, birds and marine life.
Also, following the incident, costs of insurance on maritime vessels coming to Yemeni ports have risen, and that has deprived Yemen of a significant source of national income in the wake of retreat of navigation activity by 50%.
Yemen has borne results of keeping security in the ports and coasts extending for a distance exceeding 2500-long km. American and western assistance has been confined to technical aspects and bearing costs of some equipment.
Meanwhile, the tourist sector has lost revenues of up to $250 million while the Yemeni airways sustained losses of over that sum.
Then came the operation of assassinating the prime al-Qaeda operative in Yemen in Mareb in joint effort of Yemen and the U.S. to add more hardships to the Yemeni economy.
The operation has also put on the Yemeni economy responsibilities of hunting down the runaway elements suspect of their link to al-Qaeda organisation.
Added to that is the financing of campaigns of research and erecting security barricades and points equipped with developed devices.
The authorities also fear possible disturbances to take place in the tribal areas, which could lead the US company Hunt Oil, operating in Mareb, to reduce its operations of extracting and marketing crude oil, which would result more catastrophe to the economy.
So Yemen is swallowing consequences of terror and the campaign against it and this is directly reflected on its economy.