Yemen shifts to big projects & restructuring [Archives:2005/810/Business & Economy]
Yemen is endeavoring to correct the defects in its national economy that it has been suffering from since 1995. The government has presented a new effort aimed at developing trade activity so that it is more in line with regional and world standards. It also intends to develop its use of technology and human resources.
The government remains committed to implementing economic reforms and continuing to restructure state institutions to increase growth. The reforms include wage reforms, financial and administrative decentralization, and reforms to the taxation and customs systems. The government also intends to attract investments to industrial zones for Hudeidah, Aden and Mukalla. It is hoped that this will help Yemen's accession to the World Trade Organization.
The Yemeni government has made it clear that what has been achieved for Yemen of those reforms came at a time when Yemen's economy was deteriorating rapidly. It defends its reforms by explaining that if they had not been implemented, the economy's conditions would have been much worse as the country's inflation was at about 77 percent, the budget deficit at 17 per cent, unemployment at 22 per cent and indebtedness at about $US11 billion. Then, after carrying out reforms, the deficit has dropped to between 3 and 3.5 per cent, inflation to between 8 and 10 per cent, unemployment has dropped to about 17.5 per cent, and the foreign debt than half of the previous figure.
Freedom of the market should play a pivotal role in construction of the national economy because it provides the opportunity for each citizen to contribute to building the country. The government must also work to reduce poverty and unemployment and working against corruption in state departments and institutions.
The objective must be to enhance economic growth by expanding the base of investment and by a commitment to comprehensive development and modernization of administration and institutions.
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