Friday,20 October, 2017
Current issue | Issue 1127, 20 - 26 December 2012
Friday,20 October, 2017
Issue 1127, 20 - 26 December 2012

Ahram Weekly

Bleeding resources

Yemen has suffered more than $22 billion in economic losses since the 2011 revolution

Bleeding resources
Bleeding resources
Al-Ahram Weekly

A recent study of the Yemeni economy by economist Ahmed Shamak has revealed that Yemen has lost some $22 billion since the country’s 2011 revolution, with the losses being the direct or indirect result of the political unrest in the country, writes Nasser Arrabyee.

The bill includes damage done to state institutions, such as hospitals, police stations, military camps, electricity networks, water resources, and oil and gas installations, in addition to losses in the business sector.

The study showed that about 40 to 50 per cent of the Yemeni population lives in extreme poverty, and 85 per cent lives in rural areas where basic services like education, health, water and sanitation are often unavailable.

The further communities are located from the country’s main cities, the fewer basic services they receive.

According to the study, the economy may be set to worsen further, since current policies are influenced by interest groups from the old regime that have been trying to keep the country’s wealth in their hands.

These interest groups include tribal, military, and religious families who are also trying to dominate not only the economic but also the political and social scenes during the current transitional period.

Plans put forward by experts to fix the economy are being ignored as a result.

Saudi Arabia this year deposited $1 billion in the Yemeni Central Bank to support the country’s foreign reserves, which were down to $6 billion in November 2012.

According to Abdel-Rahman Al-Qadasi, head of Yemen’s main electricity corporation, the country is losing some $0.5 million per day because of sabotage attacks on electricity towers and transmission lines by tribesmen.

The tribesmen are usually demanding the release of relatives from government prisons or improvements to their living standards, Al-Qadasi said, and they attack the transmission lines when negotiations with officials reach a deadlock.

This happens often, sometimes on a weekly or even daily basis.

Officials at the Ministry of Petroleum and Minerals, including former minister Hisham Sharaf, estimate that the country has been losing around $10 million a day as a result of the bombing of the country’s main oil pipe line in March 2011.

While the pipe line was finally repaired earlier this year, the total loss during the 10-month stoppage is estimated at $3 billion.

The Yemeni economy depends mainly on oil exports, which form more than 85 per cent of the country’s export revenues. Income from the oil exports forms about 75 per cent of state revenues.

International donors pledged last September to help Yemen’s economy by giving a total of $8 billion, more than half of which was from neighbouring Saudi Arabia and other Gulf countries.

However, the donors have set conditions before delivering on their pledges. They want to see a minimum level of security and stability in the country and institutions that can translate the money into concrete development projects.

The state budget today stands at about $10 billion, yet Yemen needs a further, equal amount to be able to deal with the aftermath of the revolution.

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