Yemen's 2012 budget aims to address poverty and unemployment

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Following the cabinet's approval of the 2012 budget last week, a number of Yemeni officials and economists called for more investment programmes and greater tax revenue to spur economic growth.

The budget, which is the largest in Yemen's history, is pending approval by parliament.

Officials said the increase in spending came in response to the security and political unrest that shook Yemen over the past year. The budget increased by 38.9% over the previous year's budget and has a projected deficit of 561,611 million riyals ($2.7 billion).

"The general budget came in response to the needs of the transitional period, which explains the somewhat high deficit," said Muhammad al-Hawri, deputy minister at the Yemeni Ministry of Planning and International Co-operation.

Al-Hawri told Al-Shorfa that this year's budget increase aims to address Yemen's poverty and unemployment problems, which were exacerbated by the political and economic crisis that swept Yemen last year.

The draft budget includes provisions to provide jobs to 60,000 unemployed Yemenis, resolve half a million Social Security cases, and institute pay raises for state employees that had been delayed since 2005, he said.

Although the budget promotes stability, "it falls short in terms of stimulating economic growth," he added.

Economists spoke to the strengths and weaknesses of the 2012 budget.

Dr Taha Al-Faseel, economics professor and advisor to Yemen's Ministry of Industry and Trade, said the budget is "ambitious", saying that it responds to the people's aspirations.

However, the budget's investment programme is "limited considering its vital importance to fighting poverty and unemployment," he said. Investment is important in creating new jobs and stimulating the private sector, which has become a key economic engine in employing the workforce, he added.

Al-Faseel said the surplus from the sale of oil and contributions generated by the Friends of Yemen conference -- scheduled to be held in Riyadh next month -- will be used to help bridge the deficit.

"The government must also consider raising tax revenue, which only represents 6.5 percent of the GDP," al-Faseel added, saying there are monumental tasks facing the government, including restoring health, education, electricity, and water services to pre-crisis levels, as well as repairing state institutions that were decimated by military clashes, such as the Agriculture Ministry, the Tourism Ministry, and the Saba news agency.

Sanaa University economics professor Hassan Farhan said the budget deficit is "realistic" and expects it to be covered by state revenue, service taxes, property-use taxes, and revenue from oil derivatives.

He underscored the importance of bridging the deficit using non-inflationary sources, saying attempting to cover the shortfall by issuing treasury bills will not do.

"The government must work to cover the shortfall from the sale of bonds or Islamic sukuk [financial certificates]," he said.

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    فواز

    2012-6-5

    Unemployment is one of the worldwide phenomena because of the failure or weakness in economic growth and the decline of production, which lead to a decline in the employment rates. However, the need for access to the labor market continues to increase with the increasing rates of population, in particular the youth that make up most of the Arab population, and the females. However, the unemployment rate is twice the rate among the males, in spite of the fact that the growth in the rates of employment opportunities in the Arab countries exceed the rates of the developed and developing countries. This is in addition to their failure to improve individual productivity and increase real incomes, which has a negative impact on the income of the workers as reflected by their social status, the increase of poverty and reduction of the standard of living. I think that the problem is even more serious as we move forward because of the continuing increase in the unemployment rates and the inability of the market to accommodate job opportunities if the situation remains as it is, in that there is a notable discrepancy among them with regards to employment levels and the rates of employment growth according to the economic conditions of each country, in terms of natural and human resources and economic structure.

  • علاوي

    2012-5-22

    It is well known and agreed upon that these people who are sneaky with religion in a false way are opponents for the sake of opposition and praise to Allah that the Jordanian street knows them well. I will not say more than that. We are Muslims in Jordan before their arrival to the Muslim Jordanian scene and we know about the great Islam more than they do because we believe in Allah, the nation and the king, otherwise, they are just tampering.

  • ايوب حمدي

    2012-4-24

    The living conditions in Yemen are very hard. In fact, the Yemeni citizen leads a miserable, tough life as he finds great difficulty in providing for the needs of his family. This is due to the difficult conditions and unemployment which is widespread in the country. Poverty is rampant in this country which does not have a wise leadership which tries to deal with these crises and problems experienced by the Yemeni people. Besides, unemployment has considerably increased during the last year due to the security conditions, the situation that the country has gone through, the change and demonstrations which completely changed the country. This increased citizens’ suffering as these conditions halted life and disrupted their works in a significant way. Moreover, the former regime clung to power and the terrorist organization of al-Qaeda also led to the departure of many companies and investors. This exacerbated the situation and significantly increased unemployment.

  • باسل علوان

    2012-4-17

    Yemen suffers from the lack of security and stability, which caused increase in the poverty and unemployment. Yemen originally suffers from an economic crisis and the recent events in Yemen worsened the tragic conditions of the Yemenis. Many of the government institutions are still operational and terrorism gained control in some areas. The terrorist acts had negative influences in these crises and led to more deterioration in this country.

  • خالد العنزي

    2012-4-17

    The Yemeni people suffer from poverty and unemployment and many Yemenis suffer from pathetic conditions. That is because Yemen is among the countries that suffered from wrong policies that led Yemen into these pathetic conditions at the hands of Ali Abdullah Saleh and his regime, which is known for its corruption and favoring the personal interests over the interests of this poor people, who face many difficulties in their lives. Many families became preoccupied in securing their daily food. The Yemenis suffer from poverty, disease, hunger, and employment. Many of the Yemeni youth are jobless and some of them were exploited by some criminal and terrorist organizations using financial temptation. In my opinion, Yemen suffers from a serious human crisis and continuation of this problem affects Yemen and its people significantly. The living conditions in Yemen are not good enough and the Yemenis suffer from many bad conditions because of stopping many of their businesses and stoppage of importation and exportation. Certainly, this negatively affected this country.

  • ناصر حميدي

    2012-4-11

    I want the ruling power in Yemen now to work on finding a very quick solution for the Yemeni people, in order to get rid of the difficult situation which they are going through now, and to think about what is important, in order to get rid of the terrorists so as to reform the economy and to be better. I pray to Almighty God to grant the Yemeni people all the best, and for the coming days to be full of goodness and peace, and not to go back to the tragedies and pain. I want the Yemeni people not to surrender to what is going on in Yemen in terms of terrorist acts, and to be up to the responsibility. I want them to help their country, and not to let the terrorists do whatever they want to do, in order to control the situation more. They should sell and buy, import and export and do all the good things, and –God willing- things will be better, and the situation of Yemen will go in a better direction, in order to free the Yemeni people from the terrorist acts and the rise of prices in the markets, and to save the economic situation in Yemen. Please, God, help them restore the normal status, so it will be even better than before. And please, God, give them the power to get rid of the filthy terrorist acts, and from the evil of al-Qaeda and its acts. There should be no power to weaken the power of the Yemeni people. They need to be patient enough in order to restore the situation of Yemen to the best. God willing, the strength of the Yemeni tribes will be much better, so they can get rid of the terrorists and in a greater way, and they will also restore security, safety and stability; Amen.

  • مالك الياس

    2012-4-11

    Currently, Yemen is in urgent need of the stability and calmness and this requires fighting all the terrorists of Al-Qaeda, which tries to harm the Yemenis through deceiving them under the name of the religion in addition to tempting them using the money because the Yemenis are very poor and they suffer from unemployment, hunger, poverty, and corruption. Hence, we have to get rid of the terrorist elements of Al-Qaeda in order to restore the security in and stability Yemen and focus on the construction and development to get rid of the negative aspects in the country.

  • خالد

    2012-4-9

    The Arab nations are supposed to help one another in order to eliminate inequality and deprivation of any country of the reserves that it could need. Indeed, some Arab people are suffering from poverty. Some people and countries are enjoying high living standards and luxury while others die from hunger, poverty, deprivation, and unemployment, which is not fair. In fact, this situation could not please the Almighty God. Therefore, the Gulf States and people, who are blessed with huge oil reserves, must consider the help of many other poor countries. Meanwhile, the latter should seek development in order to spread comfort and confidence. It is a positive thing to seek development. However, it is also important and better to help people in need.

  • فاضل العتابي

    2012-4-9

    The situation in Yemen, in terms of the spread of poverty and unemployment, is considered very dangerous and may lead to a major crisis that will bring about the spread of hunger, corruption, disease, backwardness, and underdevelopment in all fields. This deterioration will harm Yemen. Consequently, the sons of Yemen will go through a very difficult era because of this state of instability. The current government must carry out the role of the former one and do its utmost to improve the situation as well as provide all the best for the Yemenis. It should eradicate all the negative issues that contribute to spreading a lot of things that threaten the Yemeni community and put their lives at risk. In addition, we have to eradicate unemployment and provide job opportunities for the youth, in particular, so as to prevent them from being subjected to dealing with al-Qaeda members and groups, because the latter will exploit their poverty and unemployment, and lure them with money in order to recruit them. In so doing, the situation will be disastrous for Yemen.

  • كامل حسن

    2012-4-3

    Yemen is one of the countries that have suffered from neglect and lack of guidance and awareness, and also a lot of the problems experienced by the citizens of Yemen. Therefore, the instability of the country and the difficulty of living experienced by many segments of this society is the cause of the spread of extremist and terrorist ideologies. It is trying to take advantage of such a situation. I also see that the Yemeni Government, the clergy and intellectuals among them have a lot of shortcomings on this point. The community needs to continue its awareness. Everyone plays their part in building the society whether this was through the guidance, awareness or concern for the poor, or the neglect of a lot of things behind the ideas of terrorism and militancy, even if they are not convinced by such ideas as the temptations that had influenced some. Therefore, an environment such as the environment of Yemen is originally prepared for the reception of such ideas, which started growing little by little, especially after the events in Yemen and the absence of oversight, follow-up and concern for the security agencies and the military to deal with the events in Yemen and what was left by the lack of stability in this country.

  • مسعود صدقي

    2012-3-31

    The economic situation in Yemen is in the midst of a very difficult phase. The indicators of collapse exist and represent the bankruptcy of a large number of small and medium enterprises, where the investment program of the State stopped in full, in addition to the paralysis that has hit the tourism sector and other sectors, most notably the banking and construction sectors, as well as the transport and services sectors, which led to the deterioration of the living conditions of the Yemeni people. In the event of the continuation of the situation as it is for the time being, Yemen will enter the stage called "the stage of hunger," which is the inability of millions of people to meet the requirements of basic food. Finally, the scarcity and depletion of savings mean the instability of the economic situation and this will inevitably lead to civil wars.

  • بشير

    2012-3-31

    The total gross domestic product of Yemen is $9 billion annually in a country that has a population that exceeds 19 million people, which makes the annual per capita less than $800 while the Sultanate of Oman, the lowest of the states of the Council in its gross domestic product with a per capita that reaches $11,000 a year. Also, the rate of Yemen's population growth rate is the highest in the Gulf and the Arabian Peninsula Surpassing Saudi Arabia, where it reaches 3.52%. Its rate of population growth reaches 2.94%, which confirms that Yemen's population will reach 84.4 million people in the year 2050. Surpassing Saudi Arabia's population at that time is likely to be 54.7 million persons.

  • ابو سارة

    2012-3-31

    The paralysis experienced by the Yemeni economy since the start of the outbreak of protests a few months ago, had effects on the living conditions of the people after the loss of thousands of workers and their jobs, causing a rise in the rate of unemployment and an increase in the deterioration of the living conditions. Poverty in Yemen is not the result of natural scarcity of economic resources or of an increase in population. Yemen possesses significant economic resources in various economic natural mineral and oil, agricultural and fishery fields as well as its important strategic location and presence of abundant and cheap human resources. However, the abuse of those economic resources under a traditional and underdeveloped economic administration and unfair distribution of wealth among the population and the seizure of its revenues by certain groups deprived the others of the wealth of the country. This was a reason for the deteriorating economic situation, living conditions and the widespread of poverty and unemployment among the population. Poverty, unemployment and deterioration of living conditions are the main factors that led to the wide protests in the country and the departure of Ali Abdullah Saleh from power. However, Yemen faces serious challenges and it has to put solutions to save itself and they are Huthist rebellion that want self-rule as well as the southern movement which believe that the central government controlled by the North took advantage of the unity agreement to grab their resources and failure to provide the necessary living conditions for them and some tribes took advantage of this problem to call for secession from the north. The organization of al-Qaeda found in Yemen suitable conditions to intensify its presence and start its operations in the rest of the Arabian Peninsula. There must be a deliberate move to fix the problem before it is too late.

  • عبدالله عادل

    2012-3-30

    We call on the employees and officials to fear God and avoid using ill-gained money to feed their children. They must remember that God may give respite, but he never forgets. They should do their best to have a good end to their lives, instead of the scandals that you see today, let alone the penalty when they meet their Lord. They must work for the benefit of the home and the citizens and read, listen and implement. All officials must realize that they receive their salaries from the taxes that are paid by the people, and whoever finds that he is not efficient, he must respect himself and leave his position to more competent people.

  • ERT

    2012-3-29

    The condition of Yemen is completely dire and dismal because of severe political turmoil, terrorist attacks, abductions, assassinations and tribal violence. Adjusting to the living conditions in Yemen is very tough. Widespread poverty and unemployment are two major issues in Yemen which greatly discourage the foreign investors in business. There is a lack of infrastructure in the country. Living conditions deteriorate more because of the abduction of innocent civilians and the bombardment by terrorist groups. Frequent gunfire and the sound of explosions destroy the mental peace of the residents. In a country like Yemen, there is political unrest and war, which makes women and children suffer more. Additionally, the unemployed men are forced to join the fight against the militia.

  • مطيع غني

    2012-3-28

    There is a problem that has to be solved which is the administrative and financial corruption practiced by the politicians and the employees of the public sector who take bribes. This increased the suffering of the citizen in Yemen which is now one of the poorest countries in the world. The human development of Yemen is very low which is known for all the people of the world. In order to get rid of this bitter reality, the new Yemeni government has to rescue the people from poverty, hunger and lack of services by focusing on the process of development and investment in the country and giving the youth work opportunities to achieve prosperous future.

  • كسيف احمد

    2012-3-28

    The Yemeni people have been suffering for a long time from the destructive pair, unemployment and poverty. They led to bad living conditions in the country; they are a great threat to peace and stability nowadays due to the difficult economic conditions. Those conditions are the reason behind the outbreak of the political and security challenges in Yemen.

  • انور حميد

    2012-3-28

    If we want to get to know the so-called Arab Spring in the Arab countries that had victory and garnered the outcome of that spring: First, Tunisia has disorders, conflicts and unemployment. Second, Egypt has disorders, insecurity, increasing poverty, theft and political conflicts that might lead to dividing Egypt. Third, Libya after the Tyrant now has hundreds of tyrants and hundreds of murderers. The country is totally destroyed. The chaos is prevailing in Libya and instability is the dominant condition there. As for Yemen, and what can make you know what is happening in Yemen.

  • نصري

    2012-3-27

    Yemen is just like the other Arab countries such as Egypt and Tunisia. What caused the spread of poverty and unemployment was the deterioration and the political corruption of the corrupt regime, which were the main concern, and the issue preoccupying it the most was looting and stealing the wealth of that country. This is what led to the revolution of the Arab people and their new spring. There is also the spread of poverty, unemployment and neglect of the Yemeni citizens. They are not looking at the development of the infrastructure of the cities of Yemen as well as the way to take control of Yemen as a whole, considering the citizens as if they were slaves and had no rights. This is what led to the explosion of the people and the establishment of the Yemeni revolution. We can say that the living conditions experienced by Yemen were the first factor in the explosion of the Yemeni revolution like Egypt, Tunisia and Libya.The Arab citizen did not find respect in his own country and he did not find the required encouragement from his own country that he cares about. Those revolutions must have happened to take the Yemenis out of poverty, unemployment and develop their country again in order to build a strong economy upon which the Yemeni state is based. The political situation is the main reason for the poverty and unemployment, or rather the economic deterioration which the country is going through. The living conditions in Yemen are deteriorating and it needs a lot of adjustment and change.