The economic importance of attracting investment (Part 2 of 2) [Archives:2006/937/Business & Economy]
By: Dr. Ahmed Ismael Al-Bawab
Our banks and financial establishments also must adopt and finance strategic projects serving the national economy effectively, as well as lead and manage issuance and underwriting processes in vital and important projects possessing studied feasibility. Re-attracting migrant capital requires more effort to create an investment climate convenient for such investment work.
Economic stability should be provided represented by stable economic decisions, laws and internal policies. Such laws and legislation especially must include investment guarantee articles and stipulate a clear-cut compensation system in the event of reconsidering any concession for projects under license.
Other requirements include the existence of realistic exchange rates, positive interest rates, granting encouraging tax exemptions, establishing and developing interconnected capital markets in prelude to a unified stock market.
Our banks and financial establishments also must establish permanent and distinguished relations with Arab banks and financial establishments and their organizations and unions, coordinating with them to create a relationship near to integration. Yemeni commercial banks must expand their work through programs of Arab trade financing.
Additionally, Yemeni banks and investment establishments should play a role in making stocks and bonds and work to involve investors from many Arab countries in Yemeni production projects or common projects by organizing regional stocks and bonds, as well as future enlisting of Yemeni companies' shares in more than one Arab financial market. This could be a means of activating capital movement between Yemen and the Arab world.
Attention should be paid to Yemeni banks and financial establishments' presence abroad and cooperation with Arab banks and financial establishments, as well as the federation of Arab banks. This is considered a factor in helping to gather Yemeni-Arab financial investments.
Re-attracting local, Arab and foreign investment capital has witnessed noticeable progress in recent years under the financial, administrative and economic reforms program, which especially has focused on building industrial and tourist areas and various investment projects. Focus also was on improving the investment climate, providing financial and investment incentives and customs and tax exemptions. Added to these are encouraging local, Arab and foreign investment inside the country.
Considering the Sept. 11, 2001 events and events following that date, we can see investment dangers in international markets compared to investments in Yemeni markets, where economic and financial dangers very much receded by virtue of the state's wise and sound policies and the great role of Yemen's financial and economic sector. This sector works to mobilize local and Arab savings and attract local and Arab capitals through developed services like investment banking, special banking services and providing funding for existing Yemeni projects for the interest of all parties.
Dr. Al-Bawab is a Yemeni writer specialized in banking and finance affairs. He is the general manager of public relations at the Yemen Bank for Reconstruction and Development.
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