The fragile banking sector [Archives:2005/904/Viewpoint]
Editor
The long arm of the law has been replaced in Yemen with the longer arm of corruption. Since the core of all corruption is power, it would not be surprising that the power of money is sought after the most in today's life. What happened recently to one of Yemen's commercial banks “Al-Watani Bank” is tragic, but definitely not surprising. According to the officials in the Central Bank of Yemen, they saw it coming: “We raised the concern many months ago. We pointed the issue to the governor and we know he has raised the issue further. We don't really know at which level but it was blocked by some people at the top.” A Banker friend told me last Thursday.
The collapse of one bank is not where the catastrophe ends; it is rather where it starts. Many clients have started losing their confidence in the banking and monetary sector in Yemen, and people have been withdrawing their money from the banks frantically.
Yemen Times will be publishing an investigative report on this issue soon. “I'd rather keep my money under my mattress and know it is there, rather than keep it in the bank and lose it”, was the common justification clients gave as they withdrew all their money. And while current investors are looking behind their shoulder in concern, new investors who were interested in Yemen are thinking again: It does not stop here. Many of the current banks' managers in Yemen have been expressing their concern at how the image the banking sector has deteriorated to the extent that the local banks will lose their credibility on the international and regional level; It is obvious that the strength of monetary work is dependent on the networking and outreach. This means that loss of credibility would greatly affect the success of the domestic banking sector in Yemen.
It is ironic how the government calls for reform and claims to encourage investment on one hand, and literary takes measures to destroy any potential for investment on the other. Transparency in money transactions in Yemen is a myth. And the short arms of the law are handicapped that it can do nothing but clap in applause when requested. The president's call last year for reform from within was a bull's eye de-facto and it gave the impression that the Yemeni government knew where the problem lies and is working on fixing it. However, since then things are only getting worse. The changes in the structure of the ruling party announced post the conference do not show much promise either. If reform is to take place from within, shouldn't the people “within” be reformed first?
——
[archive-e:904-v:14-y:2005-d:2005-12-19-p:view]