To be rich What? [Archives:2005/844/Opinion]

Raidan Abdulaziz Al-Saqqaf
[email protected]
I received considerable controversy in response to my column “To be rich is glorious” Published here in YT on May 5th, therefore I thought I'll make the time to discuss the subject further.

In the global economy, Foreign Direct Investment (FDI) plays a crucial role in developing an underdeveloped nation such as Yemen, as it is an important source for building expertise and funding economic growth, this is no news.

However, we, in Yemen, lack a number of important facilities to enhance our economy's attractiveness to FDI, in fact, a considerable amount of FDI is invested by Global Fund Managers and financial institutions, which compare and contrast what is happening across countries and regions, setting their expectations and investments based on global trends and national investment opportunities. So far, most of these have been deliberately ignoring Yemen due to three reasons:

Non-existence of a stock market:

Stock markets are a crucial element in attracting FDI, especially from the point of view of international fund managers, for example: between June and August 2003, foreign investors bought 79 billion rupees of shares in Indian stock markets against locally derived stock purchases of 1.4 billion.

Risks Involved:

Global investors operate on a global stage and have a range of options regarding the safest investment location to put their money, contrasting with local investors who may tolerate the eccentricity of Yemen, in terms of political risks & instability, inflation, and return on their investment, of course, and comparing that which better investment options in the region and elsewhere in the world. For example Yemen is the only country in the world from which Proctor and Gamble disinvested from.

Governance:

The governance plays an immense role in determining economic growth, in transparency levels, information disclosure and above all in Judicial reform, with the high rate of controversy in our political scenario as reflected in the free press; the regime in Yemen have been saying the same things to global investors for too long while almost all other economic indicators reflect something else, such as the differences in the quantity of oil reserves in Yemen. Is there no end for this story? Or is a no-end better than a sad ending?
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