Foreign investments increased in Yemen in 2009, despite financial crisis

By Faisal Darem in Yemen
For Al-Shorfa.com
2010-02-19

[MARWAN NAAMANI/AFP/Getty Images] Yemen wants to increase investment in industrial projects, like the LNG plant in Balhaf.

An official report shows a 57.6% increase in foreign investment projects in Yemen in 2009 compared to 2008. Officials told Al-Shorfa that the increase demonstrates a remarkable progress in Sanaa's ability to attract foreign and Arab investments, especially from Gulf countries, despite the financial crisis.

The report, issued by the General Investment Authority (GIA), said that the overall investment projects registered during 2009 consisted of 272 projects costing 314.9 billion Yemeni riyals with 102 billion in fixed assets. The projects would help create more than 10,364 jobs.

The number of foreign investment projects amounted to 34 in 2009 at a cost of more than 130 billion Yemeni riyals. Foreign investment capital accounted for 14.6% of all projects registered last year, which is worth more than 15 billion riyals in fixed assets.

Muntaha Muthanna, head of the promotion sector at GIA, told Al-Shorfa that "this improvement is a result of an intensive promotional campaign targeting specific businesses in select countries and in competitive sectors in order to launch specific strategic projects."

Muthanna said that the agency has worked diligently in order to accomplish its four main functions, namely supporting its policies, building a positive image of Yemen, facilitating and attracting investment and using new and state-of-the-art advertising technologies and media in the investment field.

"In spite of changes happening locally and internationally in the previous years, especially the global financial crisis and security conditions in Yemen, there has been a remarkable increase in the number of Gulf investment projects registered with GIA and its branches in 2009 compared to 2007 and 2008," she said.

Gulf investments accounted for 14 projects in 2009, including a Qatari project worth 105.5 billion riyals, seven Saudi projects worth 4 billion riyals, four Kuwaiti projects worth 3.5 billion riyals, and two UAE projects worth more than 159 million riyals, according to the report.

Industrial projects registered in 2009 witnessed a decrease both in terms of their numbers and their investment value. Muthanna said that their number decreased from 128 in 2008 to 126 in 2009, which represented a reduction of more than 135 billion riyals in investment value.

However, "the industrial projects registered in the last three years were ranked among the top projects, and that was a positive indication given that industrial projects create more job opportunities," she added.

"The Yemeni government has made huge efforts to provide a suitable environment for local and foreign investments. It amended trade and investment laws and adapted them to the prevailing international conditions, particularly the laws and regulations of the World Trade Organization and the Gulf Cooperation Council."

Dr. Taha al-Fusayel, advisor to the Minister of Industry and Trade, and head of the Business Environment Development Unit at the Ministry, told Al-Shorfa that "despite the remarkable increase in Gulf and foreign investments compared to previous years -- a result of Yemen’s positive ratings in various international reports such as Doing Business, published by the World Bank, or the Economic Freedom Report -- there are internal and external causes for the reduction in [overall] investment in Yemen during the last year."

According to Al-Fusayel, "The global financial crisis affected investors in their own country, so how would these investments increase in foreign countries?" He stressed that the investment environment relies on political, economic and social stability, which was not completely available last year.

"The year 2010 will see new influxes of investments," he added, "especially with hopes of an appeasement in the conflict between the government and the rebels, and the agitation in the south. In addition, Yemen is keen to pursue economic reforms and improve the investment environment. This will result in Yemen’s rank going up in international reports and reflect positively on foreign investments pouring into the country.

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