The GPC’s economic file till 2009 should…Curb poverty, reduce inflation, increase non-oil exports [Archives:2003/636/Business & Economy]

May 12 2003

The rate population growth and is impact on all walks of life constitutes one of the most important files the new government of the GPC has to deal with, particularly after the party's sweeping majority win it has achieved in the recent parliamentary elections on April 27, 2003. The file in question contains mainly continuation of poverty growth, illiteracy, low rates of joining education, weakness of covering public services, realizing a growth rate by six percent, along with indicators on retreat in oil production.
Pursuant to the new legislative period 2003-2009, the GPC's government would find a speeding up of population growth expected to reach at the end of the mentioned period at around 25 million people compared to 18.3 million at present. Economic experts say the population growth is out of proportion to amount of available economic resources and that would consequently limit possibilities of economic growth and social development during the mentioned period. Building on indicators of high rate of fertility and rising population growth, the work force at the age of fifteen years would redouble from more than 5 millions to about 10 millions. Added to that the increase in number of university graduates and those enrolled at the system of education and training and the rise in proportion of those leaking from education in quest of work. All these factors constitute a challenge to capability of the Yemeni economy and the private sector of providing opportunities enough to accommodate the new work forces. In the coming period the government would find itself encountered with challenges of population growth, ecological deterioration, emergence of some negative aspects regarding waters and air, expansion of desertification, and danger of pollution on marine life because of sewage system waters and oil pollutants in the seas.
According to financial statements the new government would have to control inflation in a way preventing it from going beyond its annual average of %6, compared to living expenditures and at an average of %4.9. It has to prevent the rate of inflation in the gross domestic product of non-oil economy from exceeding the percentage of %7 per year, provided that it should follow a regressive course to reach at about %5.6, at the end of the present legislative period.
Among the heated files awaiting the new GPC's government is to increase the total work force in the national economy by 876 thousand workers till the year 2005 and to the double of this number till the year 2009, as it had pledged in its second five-year plan ending in the next two years.
The government has to seek for improving the Yemeni current account at a surplus to the gross domestic product reaching %8.3. It must work for continuing the support for and enhancing the economic stability and achieving a real growth and sustainable development as well as the improvement of the state's financial situation. This is to be done via diversification of the economic productive basis and improvement of the entire competitive capability of the economy, added to that is the improvement of the current balance and the balance of payments and activation of private local and foreign investments.
It is expected that the human development would occupy he priority of expenditure on education at an annual rate of %13.2 of the gross expenditure and about %11 of the gross domestic product. The other priority is predicted to be spending on improvement of health and social services by %6 and %7 respectively.
Citing the program published for voters by the GPC the government would have to increase government revenues by %6.7 per year and rising public spending by %12 to cover the reform of wages and salaries system and increase investment spending for the development of infrastructure and basic services.
With regard to oil the estimates indicate to regression in production of Yemeni oil during the coming six years by %2.5, despite that the preliminary estimations of explorations in the present fields and the new areas of concession indicate to possibilities of increase in oil production by 10 to 15 percent. This retreat in oil production forces the new government to intensify its efforts towards digging for other mineral riches and increasing agricultural and industrial production. The aim is to diversify non-oil exports and attracting other revenues.
These indicators, in addition to implementation of the remainder parts of its economic and financial reform program, as well as privatization of some state establishments, constitute the outstanding files awaiting the government of the new GPC's government till the year 2009.