Yemen reconstruction profile in details… Saudi Arabia is back
The reconstruction project will kick off from the restored cities
If the war persists, more than 80% of Yemeni economy will collapse
By Mahmoud Ali
After several United Nations-brokered Yemen peace negotiations failed, Kuwait hosts a new round between conflicting parties. This comes amid experts’ confirmation that if the current political and security chaos in Yemen persists, this would lead to an adverse economic disaster.
Failing to reach a political settlement through these negotiations to stop the war and restore legitimacy, following the decisive storm and bringing back hope in Yemen, might cause more than 88 per cent of Yemeni economy to halt. Moreover, industrial facilities and agricultural exports may partially stop, in addition to a collapse in construction, contracting, trade and services sectors, amid import and export drops and 87 per cent increase in unemployment rates.
Within one year only, 80 per cent of Yemenis have plunged below the poverty threshold, GDP declined by 40 per cent, compared to 2014, and growth rate dropped from 12 to 34 per cent in 2015.
Foreign currency reserves reached $2.8bn, after it was $5bn. Moreover, nearly 75 per cent of business sector is shut, basic services are almost completely missing and around 1.8 million children cannot go to school.
Besides the political and security burdens it has to incur, Yemen hosts 1.5 million Somali refugees- since before the war- which adds more pressure on its limited economic resources, especially when it comes to education, health care, water and job opportunities.
GCC countries have recently pledged to help reconstruct Yemen, after the war is over. Saudi investors and businessmen assured that they will channel $5bn for developmental investments, although previous Saudi agricultural, industrial, real estate and tourism investments in Yemen stopped because of the war.
This commitment was offered during the latest Saudi-Yemeni business council, as it was preparing to receive the first tranche of investments in 2016 to re-construct necessary infrastructure to hold them successful. The reconstruction programme is decided to kick off from Eden first, according to Saudi officials, precisely from the stable areas that fall under Assad’s rule. It involves providing basic services in education, health care, water and drainage, housing and electricity, since related institutions will be restructured.
Saudi businessmen will focus on infrastructure, according to Yemeni-Saudi Business Council, seeing the importance some sectors hold to carrying out projects, like electricity, ports, warehouses and construction. This is expected to start once peace negotiations in Kuwait are concluded and political resolution process begins in 2016.
It is worth mentioning that Saudi Arabia is not the only state engaged in the reconstruction process. According to Yemeni Minister of Planning Mohammed al-Maitami, all GCC countries will channel 70 per cent of total funds needed to re-build Yemen, namely $100bn, over the next 5 years. He pointed out that these states are currently working on laying down a future vision of the process, based on the initiative launched at the 36th GCC Summit. It pledged a field survey to estimate damages that hit roads, facilities and public and private properties.
For its part, World Bank expressed willingness to contribute to Yemen reconstruction, after the war comes to an end and stability is restored. Since Yemen is a WB member state with its own programmes. It is also a middle-income country and receives a lot of funds and support.
Arab Investors Union’s Secretary- General Gamal Bayoumi says that WB announcing its support to Yemen is very positive, since it will attract several other entities to contribute to bringing back stability to Yemen. Yet, many more billions are still needed.
Bayoumi added that the bank funds infrastructure projects so it cannot interfere in Yemen now, especially since the conflict is still under way. But, this announcement along with the neighboring state’s peace efforts shall encourage parties to stop the fight and restore stability.