Yemen tries to reconsider failures while investors move to Gulf States [Archives:2005/869/Business & Economy]

August 18 2005

Mahyoub Al-Kamaly
Economic reports have affirmed that more than 150 local investors holding Yemeni capitals and running economic activity may be on their way to move their activities to the Free Zone in Sharqa emirate, which the Emirates has established recently. Those investors are especially Yemeni expatriates in Saudi Arabia trading at the gold market. Instead of returning home they have chosen the Emirates to work in considering it a stable and safe state and encouraging and protecting investments.

It is also reported that businessmen in Yemen consider there are countless obstacles making investment in Yemen a risk needing exceptional courage. They believe that investment would not be oriented towards Yemen unless there is law and order, emphasizing the significance of judiciary reform to guarantee justice and enable it resist those representing parasites to the investment process. They are also of the opinion that the investment process in Yemen is full of many practices that are faced by authority with leniency. Such practices are mainly the seizing of plots of land and dispute over them under an absolute domination of corruption over the government institutions and judiciary, in addition to a government wearisome temperament forcing itself wherever and whenever it intends to.

On their part chairmen of chambers of commerce stress that, “an investor would not come while he feels he is in need of protection other than law and order.” Meanwhile the government unleashes and repeats its calls, every now and then, urging expatriate Yemeni investors and Arab and foreign ones, but it did nothing on the ground to tempt them to invest in Yemen. Added to that is the recession in local and foreign investment growth. Economists ascribe that recession to spread of a climate repulsive to investment and local capitals, especially in relation to the law of investment. The reason is that the concerned parties are still living a state of corruption away from surrounding changes. Those parties do not want to serve national capitals and local investors without gaining privileges, bonuses and commissions.

Field studies in this regard indicate that the promised investment flow did not find its way to Yemen, except for the so-called imaginary figures published by the sate authority for investment of projects registered with its offices, mentioning they are not implemental. This conclusion is depending on an official report by a committee formed by the ministry of finance, the authority of customs and the central apparatus for audition and control.

According to a report by the parliament regarding the implementation of programs of the second year of the second five-year plan due to expire by the end of this year, indicators about investment growth are causing worry. The report prepared by the special committee concerned with studying public budgets for the fiscal year 2004 affirms that growth of domestic and foreign investment has registered a panicking retreat at a minus rate amounting to -9% to -43.7% during the years 2002 and 2003 consecutively.

International organizations such as the International Monetary Fund and the World Bank advise the authority in Yemen to work for diversification of income sources because its income depends on oil by a rate of more than 67%. Recent warnings mentioned that oil as a source is heading towards exhaustion and thus diversification of income sources would help avoid what they described as disaster, urging the Yemeni authority to encourage investment and create climates convenient to attract it.

Recommendations issued by the G-8 nations held in America last year and attended by president Ali Abdullah Saleh, emphasized the importance encouraging investment to create new job opportunities and partnership of the private sector and civil society organizations in order to effect political reforms in the Middle East countries, among the is Yemen.

President Ali Abdullah Saleh had launched a wide-range assail on the corrupters who impede the process of investment in Yemen and gave directives for taking new measures to offering facilities to investors. Most important of those directives are putting an end to duality of specialties, unification of efforts of the parties concerned with offering services, development of infrastructures necessary to investment, removal of dysfunctions, reformation of legislations and activation of work in the law of investment that gives many privileges and exemptions to investors.