The scary equation [Archives:2005/883/Viewpoint]

What defines the power of a country is not just how many resources the country has, but more importantly how many of the resources are in the hands of the people. This is very related to the people's ability to purchase. If one cannot afford the merely basic needs, one is on the boarder of the poverty zone. The more one is able to purchase, or rather to spend money on other than basic needs, the further one is from the economic poverty line. There are many factors that play a role in people's ability to work, also termed as “productivity”. There are factors of age, education and skills, opportunity and some times gender. Let us take Yemen for example. Yemen's vast population is very young: 50% of the population is in the age group between 0-15 years old. Adding two percent for people above 60 years of age, the supposedly productive percentage is only 48% of the population. Considering that 50% of the productive group is females, the productivity of females in Yemen range between 3-15% of the women able to work, according to gender statistics. There are many reasons influencing on this aspect, such as education and the fact that one of two women in Yemen is illiterate, and in the rural areas as much as 70%. Besides the problem of illiteracy, cultural barriers stand against women's participation in the public sphere. This means that in spite of the fact that 50% of the productive group is female, only 15% (at best) of the women are able to work.

In the end it is only 27.6% of the whole population that are being productive. Taking unemployment into account, which according to government statistics is 30% (while other non-government statistics give higher percentages), this leaves us with only 19.32% of the population actually productive.

Around 23 percent of the population is shouldering the responsibility of feeding the 21 million inhabitants of Yemen. Even though there is a theoretical 19% of the population earning, only 30% of that group are able to spend money on other things than food. This is the percentage of people above the poverty line. These other things may include health, education, housing, clothes and other, but it does not include tourism or purchase of high technology for example.

Coming back to our calculation: of the 19.32% able to earn, only 30% (5.79% of the total population) is able to spend on non-basic issues. This 5.8% defines the target market for technology, tourism, brands, style, etc. Just below 6% of the Yemeni population are able to purchase a digital camera or branded shoes. 6% of the population are supposedly able to go to a different city on holidays or if lucky enough to a neighboring country.

Although this percentage is theoretical and could have been calculated in many other ways, the fact remains that it is an extremely low percentage. This means that in spite of the large population in Yemen, the percentage that the business sector is competing on only constitutes 6% of the total population (1.3 million people).

The point here is not about Yemen being a good consumption market for international companies; it is the fact that although Yemen has a large population, it also has more human and natural resources than many other countries. Still, it's per capita income is very low, hardly exceeding 400$ per year, while countries such as Lebanon, which is a war battered country with no oil resources, have a per capita income that reaches 7000$ per year. There are many reasons why the Yemeni economy is so low. Among others is the high growth of population, weak infrastructure, feeble economic system and strategies. Yet, what is most important is the spread of corruption and lack of good governance. This creates an environment not suitable for investment, economic growth, development or progress. The bottom-line is that good governance is the only way forward if we want to utilize our resources right.
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