More economic woes in waiting for Yemen
Yemeni economists warned of a collapse of Yemen’s economy, a rise in the unemployment rate, and food scarcity. A recent document issued by the Yemen’s Central Bank revealed that the bank made an emergency plan in anticipation of an increase in violence.
Mostafa Nasr, head of the Studies and Economic Media Center told the Yemen Times that Yemen is on the verge of an economic collapse. According to Nasr, suspension of work in private sectors, random spending on weapons and fall in development projects in Yemen have led to this dangerous economic situation. He indicated that despite the resumption of oil production during the last two months, the economic situation hasn’t returned to its normal status.
“There is acute shortage of food in Yemen. Yemeni traders are afraid of importing more foodstuffs to avoid potential losses,” he said. Imports into Yemen fell to 80 percent due to the fears of Yemeni traders and weakness of purchasing power as well.” “Unfortunately, the tourism and construction sectors are badly affected. More factories will stop their work and the unemployment rate in Yemen will increase,” he said. Nasr confirmed that the nation poverty rate has reached 60%. “We must stop this collapse that will worsen the situation in Yemen,”
“Several Yemeni banks have stopped their domestic investment and they are still working because of foreign investment and usage of treasury bills,” said Nasr. “I don’t rule out that some Yemeni banks will declare bankruptcy in the coming days if this bad situation continues, especially those banks that depend on treasury bills.” Nasr severely criticized the performance of the Central Bank in dealing with Yemen’s economic crisis. “The monetary policy of the Central Bank during the uprising was unsuccessful. Unfortunately, this bank is incompetent to lead the country out of this crisis,” “If there are no urgent plans to save Yemen’s economy by the Central Bank, we will witness a complete economic collapse,” warned Nasr. “The Central Bank must find prompt solutions to avoid the risks of economic collapse.” Speaking about the performance of Yemeni economic staff, he said, “Our main problem in Yemen is the weakness of management that caused this economic crisis and other crises.” He said that Yemen has skilled local economic experts who can lead the country out of this economic depression. “Solving this crisis requires political reform and a serious intention to work together with the aim of ending this critical economic crisis.”
Recently, many Yemenis expressed their serious fears of bankruptcy of Yemeni banks, leading some of them to withdraw their money to hide them in different places. “I would rather save my money in my home than in such deteriorated banks,” said one of the Yemenis who withdrew about 4 million riyals (USD 17 thousand) from his account.
- With Sisi likely to take over, how will Egypt's 'military economy' look like?
- Will future talks between the IMF and Egypt help the country's economy?
- Is Iran's economy already thriving amidst limited sanctions relief? Apparently so!
- Invest your wealth or each person for himself? Growth and tackling inequality are the key
- Will UAE's new law really boost SME development in the emirates?