The Following piece is written by a Yemeni-based journalist who writes for the Foreign Policy Blogs network and, due to serious security concerns, remains anonymous.
In a recent interview with Reuters, Hisham Sharaf Abdullah, the Minister of Industry and Trade said that Yemen’s uprising had cost so far an estimated US$5 billion. “We have reports that the losses range between four to five billion dollars…”
He added that immediate aid was needed in order to avoid an economic meltdown of dangerous proportion.
Economic Catastrophy
Yemen which under Saleh’s rule has become the poorest country of the Arabic Peninsula is suffering greatly under the strain of the Revolution.
Minister Abdullah noted that: “The economy should not be held hostage to the political crisis, because the situation is alarming…” However true his statement, the minister is omitting one crucial detail; the government is to blame for this state of affair. It is the Regime which in the first place allowed the state’s economy to be so fragile. It is Saleh’s clan who has derailed Yemen’s resources for its own financial benefit.
It is ridiculous for a country such as Yemen, with Oil, Natural Gas and Fisheries reserves to be listed as one of the poorest countries of the Globe. With so many riches, Yemenis still have to live with less than US$2 per day.
Foreign Aid
Many Westerns and Gulf donors have under the light of recent events, decided to suspend their contributions to Yemen; cutting off a much needed cash flow. Wary of Saleh crackdown methods, Europeans have said that they will resume their support of Yemen once Saleh will depart.
However, some analysts are now worried that further financial difficulties will only further the cause of terrorist organizations such as al-Qaeda; putting at risk the Oil commercial routes and threatening the entire Region security.
Oil Production
Most of Yemen’s US$31 billion GDP is directly linked to the Oil industry, about 60%.
For the past month now, the government has had to suspend all its Oil activities as it claimed that the tribes threatened to attack the pipelines, putting oil workers and international companies at risk. Furthermore, Saleh had to palliate to the fuel penury by importing fuel and petroleum derivatives from abroad. The Trade Minister said it cost the state an estimated US$1 billion.
“We started doing that because the opposition pushed the tribes to bomb the oil pipeline, which has been closed since the end of March,” Abdullah said.
The minister went on saying that in his view, the main problem resided in the fact that Yemen had been unable in the past to attract foreign investments. “Our biggest problem is that we haven’t been able to attract foreign direct investment to create jobs because of the security problem in Yemen…” But if it’s true that the state has failed on that aspect, it is more corruption and lawlessness which have kept investors at bay….not so much security. Foreign companies have greatly benefited for dealing with Iraq if I’m not mistaken.
Mohamed al-Maytani who is an Economics professor at Sana’a University said to Reuters: “If there is no injection from outside … the Yemen economy will collapse, definitely…The Rial will collapse, inflation will rise to a level Yemen had never witnessed, the most needed food will not be available for majority of people who are poor.”
It is quite evident that Yemen cannot continue to function without foreign intervention. But because this aid is linked to the departure of President Saleh, no one can foretell when it will happen.
