Yemen’s Economy in a Decade [Archives:2001/35/Business & Economy]
Yasser Mohammed Ahmed
Since the renunciation of Yemen in 1990 and up to now the Yemeni economy can be divided into two phases:
The first phase is characterized by going through different economic and political crisis resulting from the civil war of 1994. Similarly the return of over than 800,000 Yemeni expatriates from the Gulf countries and the collapse of the socialist pact have also further worsened the situation due to the stop of financial assistance granted to Yemen. On the other hand, the merger of both the economies of the former South and North Yemen has its own administrative and construction-related problems which adversely affected the overall economic performance of the Yemeni economy.
The second phase 1995 – 2000:
This phase was marked by the adoption of the economic reform program with support of the World Bank (WB). The program aims at stopping the deterioration of the national economy although it has destructive impacts on the citizens.
Some of the measures adopted by the economic reform program are lifting subsidies on some of the products including oil, diesel and some of the basic commodities. Furthermore, privatization of the crippled public enterprises and enhancing the role of the private sector were also encouraged as a way to boost the Yemeni economy.
Statistics has shown that the last steps toward more open economic market without exercising any efficient control may lead to further deterioration, particularly with regard to smuggling and its destructive effects on the national economy. Consequently, owing to smuggling and the absence of the role of the competent authorities, many national factories have been forced to close down and some others have retrenched many of their workers. This requires the government to take immediate action so as to protect the national industry.
The different entities concerned with manufacturing and trade expressed their concern over the damages arising from smuggling, especially since these smuggled products are sold in very low prices. The Consumer Protection Society has shouldered the responsibility of protecting consumers and it is even much more effective than the governmental monitoring bodies. In my opinion the government should exercise strict control over the different outlets so as to put an end to smuggling and enhance the economic progress.