Wages strategy & financial reforms [Archives:2005/807/Business & Economy]

January 13 2005

The Yemeni government has affirmed that the elements of reform are interrelated and for that, it has drawn up a national strategy for salaries and wages. The strategy is part of its quest to establish a genuine structure for minimum wages that would be around YR 12500.

Hence, the higher segment of employees would in the first phase receive 40-50 thousand riyals wages and at the second stage the amount rises from 14500 riyals to 70 thousands and then at the third stage the wages would go up from 16500 to 80 thousands.

Reforms in civil service

The minister of civil service and securities Hamoud Khalid al-Soufi has explained that the administrative reforms in Yemen are progressing according to a clear-cut and defined program, adding that his ministry has implemented a number of surveys to assess the system of administration. The surveys revealed the existence of big administrative failures and shortcomings with which the government has begun dealing with the aim of building a modern system for administration and government machinery capable of actively carrying out its functions.

Minister al-Soufi said the ministry had introduced the electronic system for employment on all sectors of the state in order to put an end to phantom employees and others having more than one job. That situation has formed an impediment for pensioning some employees that would result in providing the government machinery with specialized and well-qualified cadres and the creation of job opportunities for graduates of technical and vocational education. Mr al-Soufi has also clarified that his ministry has finalized a study on simplifying government services offered to the public and the private sector. The study defines those services in terms of their type, ways of assessing them and a directory containing them.

Mr al-Soufi also has disclosed that measures of the ministry of civil service have resulted in pensioning more than 34 thousand employees, procuring for the state budget an amount exceeding 22 billion riyals a year. Replacing non-Yemeni labour by Yemenis of 7286 persons has also secured an annual surplus of more than three billion riyals. The minister also said that elimination of 10242 double-job persons has produced an annual surplus exceeding two billion riyals, pointing out that application of mechanized settlements has enabled the ministry to solve situations of about one thousand employees, while the ministry's capability in this regard was modest and not exceeding 1500 settlement cases in a year and securing one billion riyals. He has further made it clear that activation of civil service fund and accomplishing legislations and regulations pertaining to it resulted in sending 15431 employees to the civil service fund and at present their status is under settlement in accordance to the law. A main center for information and branch centers for it in governorates has also been established. Mr al-Soufi mentioned that the ministry's plan in the year 2005 includes the finishing and application of the system of employment card and it has almost finished the designing works of the card that aims at giving employment national number to employees in the public and mixed sectors as well as building a database for the unified computer. He pointed out that the ministry of civil service had finished the national strategy of salaries and wages and that it was submitted to the council of ministers to be referred soon to parliament to complete it constitutional procedures.

Reforms of financial system

Regarding the second part of reforms connected to financial system and mainly the customs the government is seeking to achieve three things. The first is the capability of building a commercial and customs system with neighboring countries because both sides' products would influx between them. The second is related to conditions and requirements for Yemen's joining of the World Trade Organisation while the third thing is the protection of national industry.

The Yemeni government confirms that results of financial reforms would be needed in the industrial zones planned to be built in Hudeidah, Aden, and Mukalla. Those would need protection of their products so that there would be great demand for investment in them and consequently expansion of the work base and absorption of part of labour.

With regard to taxes, the government is studying the sales tax and a group of other taxes. However, the most important of all that is cohesion of the taxation system because, according to the prime minister opinion, the existing taxation system is presently not cohesive. Beside that, the government stresses the significance of linking comprehensive reforms towards development of the experiment of the local authority and enhancement of financial and administrative decentralization. The local council represents the cornerstone in the economic and social progress and building the state. It also represents a big political and human dimension of the question of the state administration and the people role and participation in it.