The Yemeni Ministry of Industry and Trade intends to adopt an emergency economic plan to address the consequences of the political crisis that broke out in February.
The plan, which the ministry is seeking to implement in the coming months in co-operation with international donors, especially Yemen's regional partners, includes credit financing to support the economy's public and private sectors.
Hisham Sharaf Abdullah, Minister of Industry and Trade for the caretaker government, highlighted the importance of adopting the emergency economic recovery plan. He stressed that funding by donors should be provided without pre-conditions.
"The proposed plan will focus on re-starting the economy, which was brought to a grinding halt by the crisis. As a result, the economy suffered significant losses and the poverty and unemployment rates doubled," Abdullah told Al-Shorfa.
He said the plan will focus on both the private and public sectors. It will support the public sector by rebuilding infrastructure and services that were damaged by acts of sabotage, including the electricity sector. It will shore up the balance of payments to offset the depletion of public resources and the lack of foreign financing. It will also support social security initiatives through the Social Welfare Fund to mitigate the impact of high prices on the poor and provide food and daily necessities to them.
As for the private sector, Sharaf said the plan will provide support to industrial, commercial, agricultural, and financial sectors in order to rehabilitate production lines and add new ones. The economic plan will arrange for easy access to lines of credit from international financial institutions, in addition to providing training and job creation locally.
Mohammed al-Jadri, president of the General Federation of Workers' Trade Unions of Yemen, said on November 18th that 60% of employees in both the public and private sectors have lost their jobs as a result of the current crisis and that the national economy has suffered financial losses totalling $17 billion.
Dr. Hassan Farhan, a professor of economics at the University of Sanaa, predicted the economy will improve once services return, particularly the oil products industry, which is an economic hub.
Farhan emphasized the need to reduce the interest rate on loans and credit facilities to the private sector, noting that the interest rate in Yemen is 23%, its highest level ever, compared to 7% in European countries.
"The government of national reconciliation needs to meet with the chambers of commerce and resolve contentious issues, particularly the sales tax law. Resolving those issues would contribute to restarting the economy and to increasing state revenue."
Dr. Taha al-Faseel, an advisor to the Minister of Industry and Trade, told Al-Shorfa that addressing the economic crisis must be accompanied by a political solution because the ongoing political conflict is the main cause of the economic decline.
"Addressing the economic situation is the key to curbing the decline of economic indicators, restarting factories and production lines, and reinforcing infrastructure in order to support the unregulated economic sector, which constitutes 90% of the industrial sector in Yemen," he said.
Al-Faseel said the goal of the emergency economic plan is to prevent an economic collapse and continued deterioration of economic indicators, especially since the contraction in gross domestic product has reached 30%.
"The international community and donor organisations must support this plan without pre-conditions, such as requiring implementation of specific reforms as a precondition to supporting economic plans in developing countries."