The Saudis Are Coming! [Archives:1998/15/Front Page]

April 13 1998

It looks like Saudi businesses have discovered the Yemeni market. Every day, an average of 54 huge trailers and trucks cross one border point alone – Haradh. They bring in Saudi foodstuffs, beverages, manufactured goods and industrial raw materials.

The volume of Saudi exports to Yemen rose by 88% in 1997, compared to 1996. “We are expecting them to almost double again this year,” said Mr. Mohammed Al-Qadiri, Director of the Haradh Customs Office to a visiting Yemen Times team.
Such a development has resulted in tremendous grief for the Yemeni industrialists, most of whom were caught off-guard by the Saudi onslaught. “We support free trade, but free trade has to be fair trade,” insisted a leading Yemeni manufacturer, whose company sustained enormous losses in market shares.

Yemeni consumers believe Saudi products are of better quality. But Yemeni manufacturers say they can’t compete because they pay a 16% sales tax, which the Saudi exporters don’t pay. In addition, Saudi exporters get export credit and other facilities, which allow them to compete well in Yemen.
Another industrialist asked why the Saudis do not set up industries in Yemen. “We encourage them to establish long-term relations based on joint investments, not just trade. By dumping Saudi products, we will end up closing down our industries, which is dangerous for our country’s future,” he said.

But Yemeni products are also allowed into the Saudi market. These are mainly vegetables and fruits. The problem, however, is that Yemeni products face many restrictions. “All our products were blocked from entering Saudi Arabia during the Hajj holiday season,” a farmer complained. “Saudi officials always come up with excuses to block our meager exports,” he added. He was referring to a Saudi action against Yemeni products on grounds of improper packaging/labelling.
If the Yemeni-Saudi business is a source of some worry, it is the Yemeni-Saudi border arrangements that invite the real anxiety. Many Yemenis believe that an unbalanced power structure is allowing the Saudis to take advantage of Yemen. Continues on page Law & Diplomacy