Will it open more during the Dec. 21-22 summit?Yemen still knocking on the door of the GCC [Archives:2003/694/Business & Economy]

December 15 2003

Mahyoub Al-Kamaly
Yemen is looking forward to the coming GCC summit Dec. 21 – 22 with great expectations to joining the council's economic committees for the purpose of improving its conditions and getting aid to boost the country.
The big question remains, will the GCC Kuwait summit produce any resolutions in favour of Yemen, or will the GCC countries continue following the policy of gradual measures for accepting Yemen as a full member?
Yemen embraces a desire that the GCC summit adopts the report prepared by a committee of the GCC secretariat on conformation of economic legislation in Yemen with legislation in the GCC countries.
The Muscat summit in 2001provided the opportunity for Yemen to join as an associate member in some committees of the GCC. But Sana'a desires to gain full membership in the economic and trade committees as a measure leading to full membership of the GCC.
Resolutions of Muscat summit had opened the gates to full membership, which was a Yemeni goal since the establishment of the Gulf Cooperation Council at the beginning of the 1980s.
Yemen occupies the flank of the Arab Peninsula and it has many connections and ties with the countries of the GCC, countries with the same history, ideology and language. But certain circumstances have obstructed it against getting membership.
Yemen was not then part of the oil producing countries and was not in possession of wealth compared to what the Gulf States possess. Added to this is its republican political system, its backward economy, and its security situation was not stable because of its multiple internal problems. Also its foreign relations that were quite different from those of the GCC countries.
Observers confirm that what were the most important factors precluding Yemen's accession to the GCC were due to internal considerations, especially during the period of its division into two northern and southern parts, pursuing two different political regimes and variant international orientations. Thus it was difficult then to join one part before deciding its problem with the other part.
The decade of the nineties of the last century has witnessed a change in the political map of Yemen particularly after its unification in 1990 the event of which came after the collapse of the Soviet Union. Yemen's relations had also changed with the neighbouring countries in the wake of concluding the border agreements with the Sultanate of Oman and Saudi Arabia and discovery of oil fields in the country; an indication of richness similar to what is prevalent in the Gulf States.
These were not decisive for realization of the Yemen's accession to the GCC; however, the resolution of Muscat summit came to give Yemen hope for joining some committees of the GCC as a prelude.
Those interested and following up this issue emphasize that Yemen's joining of the GCC represents the best investment for the GCC countries. Nevertheless, the two parties have to work for solving the problems facing the Yemeni side, particularly that there is a big difference between the Yemeni infrastructure and that of the Gulf States.
For instance the income per capita in Yemen is estimated at $150 a year, and is very much lower than the income per capita in the Gulf countries which is estimated at $8,000 – 25,000, according to statistics of the World Bank.
International and regional changes after the events of 9/11 2001 and imbalance of the security factor have occupied the forefront position in the international relations and forced speeding up joining Yemen to membership of the bureaus of Arab health, education, labour and social affairs and the football federation, a step Yemen has considered as advanced and leading it to full membership of the Gulf organizations.
Observers also affirm that the new security factor had its own impact in the souls of the GCC leaders and a response to a common need, at least within the limits of present situations. Some do however dare say that the gradual accession of Yemen is no more than a temporary containment to avoid what could entail the security requirements. It seems that dealing with the Gulf States is no longer based on a tactical foundation especially after other factors have taken place inside the system of international and regional relations.
Yemeni economic sources emphasize that the negative impact created by circumstances of the first and second Gulf wars and their consequences on the current circumstances in general after the war on Iraq, the region is in need of communication between the Gulf countries and Yemen as partner in action of the committees in the GCC countries. The sources add that Saudi Arabia and the Sultanate of Oman have common borders with Yemen, as the Yemeni republic is situated on both the Arabian Sea and the Indian Ocean, covering an area of 33060 km, besides its control on Bab El Mandab Straits and overlooking the Read Sea.
A committee set up by the general secretariat of the GCC has held a comparison between the Yemeni economic legislation and laws and the systems and laws of the Gulf states and found out that there must be a measure for drawing up scientific and realistic programs for achieving the positive result of accepting the accession of Yemen in the Gulf grouping.
Political studies indicate that responsibilities are on shoulders of Yemen and the GCC states for realizing goals of this regional orientation. The matter is related to evaluating the Yemeni-Gulf relations objectively and in their normal volume without exaggeration or underestimation. Studies also stress that changing the Yemeni- Gulf relationship to an institutional shape, whether in the sector of education or the health or labour and other areas, must be started through pinpointing the areas of convergence and the challenges impeding this course. And in the framework of bilateral cooperation meetings of the Yemeni-Saudi coordination council during the past three years have come out with tangible results that included ways and means of cooperation in economic and trade fields and also in investment partnership and reciprocal understanding.
The two Yemeni and Saudi sides have managed to settle the indebtedness payable for the Saudi and which were agreed according to an agreement concluded between the Yemeni finance ministry and the Saudi Fund for Development (SFD) on 21 February 2001. The SFD has appropriated $300 million for funding development projects agreed upon in Yemen and the two countries sought to encourage the inter-trade with an agreement on developing exports and joint investments and supporting the private sector for bolstering bilateral cooperation.
Sana'a and Riyadh have also completed the final revision of an agreement on avoiding dual taxation and an agreement on customs cooperation and also an agreement on encouragement and protection of joint investments.
The two parties at the Coordination Council have also agreed in 2002 to finance some developmental projects that are given priority in the Yemeni's second five-year plan 2001-2005, especially in electric power. The two parties have also signed an agreement on land transport of passengers and goods and an agreement on sea transport. At the meetings of the Coordination Council in 2002 they have agreed to implement detailed programs in the field of education and an agreement on exchange of information concerning oil discoveries.
In translation of these distinguished relations a delegation representing Saudi businessmen had visited Yemen several times and that had resulted in the Group of the Saudi-German Hospitals adopting the building of a hospital in Sana'a worth $ 200million with a capacity of 30 beds and able to be expanded to 900 beds.
There are 39 joint projects in Saudi Arabia undertaken by Yemeni and Saudi businessmen with a capital of 831 million Saudi rials to which the Yemenis contribute with 28%. The border treaty between Yemen and Saudi Arabia signed in Jeddah in June 2000 has contributed to enhance opportunities of economic cooperation inside a market consisting of 40 million people and the value of Saudi exports has risen to around SR 888 million and the value of Yemeni exports to Saudi Arabia to about SR 280 million.
Yemeni-Omani relations have also witnessed steady growth by concluding many agreements of cooperation in economic and trade fields and establishment of a free zone on the two countries borders. Statistics point out that Yemen exports to the Omani market are worth of $2.484.829 and imports from the Sultanate goods worth 35.020.786 Omani rials. Exchange of visits between Yemeni and Oman businessmen continue for increasing the exchange of trade and establishment of investment partnership especially in the free zone in Aden.
Yemen and the United Arab Emirates have signed many agreements included cooperation in air transport, abolishing dual taxation and establishment of active partnership between the private sectors of the two countries.
Yemen has sought for consolidation of its economic and trade relations with Qatar and Kingdom of Bahrain, especially in investment and trading partnership.
The Kingdom of Saudi Arabia tops the list of the Arab countries receiving Yemeni exports, followed in sequence by Kuwait, UAE and Egypt. On the other hand Yemen imports from four Arab countries, namely, UAE, Saudi Arabia, Kuwait and the Sultanate of Oman.
Yemen imports 80% of cars via border crossings with Saudi Arabia and the Sultanate of Oman. Also the trading with used cars imported from Dubai forms the bigger share of foreign cars in the Yemeni market.