Yemen - Claiming Future

…Sanaa was born in September so as to die in November…
Then to be born again in May or in October.
Do you know how this dead Sanaa died?
And when it will live again?
Like an Apricot tree it died standing.
So as to prepare for its green birth.
It continues to die so as to live better.

Abdalla Baraduni, Yemeni poet

* * *

Economics is about every day life, development is about people, their hopes and dreams, how to make difference and stand by the world. The challenge is to follow through and nurture the abundance but which has a life of its own. Human creativity cannot be measured in numbers and or statistics only. But if released it is the most important vehicle for human development.

THE ARABIAN PENINSULA
This inhospitable, inaccessible area we know as the Arabian Peninsula can justify the claim to be the cradle of civilization. Its very in- hospitability meant that within the limits of available technology it could support no more than a limited number of people. When that number was exceeded then migration became inevitable. The migration, however, of peoples who were accustomed to fighting and struggling for their existence in a harsh environment and who therefore made a considerable impact on their new, leas austere surroundings.

The inhabitants of the Peninsula had, for as long as can be remembered, referred to it as "Jazirat alArab", the Island of Arabs. The tribe of Kindah with its origin in mountainous Hadramawt in Yemen played decisive role in cultural history of the Arabian Peninsula in the 5th and 6th centuries A.D. This was the tribe to which the famous Amara AlQais belonged, the greatest poet of pre-Islamic Arabia. It was under impetus of the later and of the Kindah that the Arabs were united for a century, and that Arabic became in a more united form – the language of the entire community. It also meant the first step towards unification that reached its heights with advent of Islam. From the womb of Arab peninsula gushed forth a spiritual force that carried the bounds of Arab lands to five million square miles, one-eleventh of the world’s surface, and accounted for one thirtieth of mankind. It was the Islamic impetus that carried the Arabs from their home into historic greatness, and vice versa. It was the Arabs who gave Islam its earthly success.

When after their long journey, the Banu Hilal, the tribe of tribes, whose origin is probably between ancient Marib and the Barati mountains, shook off the dust from their boots, it piled up and became the hill known after them. Beside this dust the ground also became covered with seeds that grew into trees in whose broad branches birds sang about faraway lands.

The Arab Empire stretched from Persia in the East and to Spain and Morocco in the West

YEMEN – THE SETTING
Secluded behind its mountain barriers, protected by its sheer lack of physical communication, the Yemen maintained a reputation for unusual mystery – even for Arabia. But Yemen was not always isolated from the outside world. Unlike Oman it is one of the few regions of the Peninsula to have regular rainfall. The soil is therefore fertile and valleys are green. Yemen was renewed for its walled cities, fruit gardens, spices, textiles, coffee, and cotton. To the Romans with its flourishing agriculture Yemen was Arabia Felix, or Happy Arabia.

HISTORY OF ECONOMIC DEVELOPMENT
Yemen has a long history of civilization and economic development. It has experienced several kingdoms and states through its long history. The first kingdoms historically documented as political units were Maineans Sabeans, and Himyars, which during the eight century B.C. existed simultaneously for 500 to 500 years. At height of their power they dominated much of Southern Arabia and controlled the Incense trail. In addition Marib held a commanding position for transport of frankincense on the important caravan route that ran from the areas on the Indian Ocean to the shores of the Mediterranean. The route winded along a chain of watering places on the edge of wadis, between the mountains and the desert. Here the riches of Arabia traveled by caravans through Yemeni landscape. Herbs, spices, and incense were coveted through the ancient world. More than 3.000 tons may have been exported annually to Greece and Rome. It used to be giant industry. The whole civilized world craved incense and South Arabia controlled the source. It developed a powerful cartel, a kind of OPEC of its time. The "pipeline" began at Qana, the present day Birr Ali, east of Aden. During the Middle Ages, AlMukalla, replaced Qana as the chief port of Hadramawt. From small river of incense rose a river of incense that in ancient times flowered north on caravan camels from Arabia Felix – Happy Arabia – to distant Greece and Rome. Along the route a succession of kingdom prospered for nearly two Millennia, fabled names like Main, Hadramawt, Sheba, Qataban. They forced their own languages and alphabets, laws, and religion art and architecture, and engineered dams to farm hundreds of thousands of acres of desert before slipping into the dust of history.

Ancient Marib was the largest of the incense cities. The ancient Marib dam built to harness runoff flood from Yemeni high mountains to the west. The dam and its canal network greened thousand of acres around the ancient Sabean capital. Upstream from the ancient site of the dam, is the new dam. The new dam is meant to double the area the ancients used to cultivate and make also electricity.

Flourishing agricultural activity supported trade prosperity. The agricultural system reflected its owners high skill and genuineness as demonstrated by terraced fields and dams. Veering off the incense route briefly are Yemeni high mountains and cool fertile valleys to the west, what perhaps was Sabas fairest province, and where majority of Yemenis live today. There coffee beans ripened on the green slopes. Yemen invented the beverage that took Europe by storm in the 1600s. The richest variety grew on Yemeni hills, although it took it name from a Yemeni seaport Mocha.

In the sixth century, however, the great Marib Dam on which much of Yemeni farming was based upon broke down. The wadis and forests disappeared, and Yemen entered a period of a long and slow decline. Further discovery of the sea route around Africa shifted most of the traditional trade from the Incense trail.

The ruling dynasty of royal Imams which was to last for eleven hundred years, was founded in the Ninth century. The following social, political and economic isolation prolonged economic stagnation and prevented initiatives for economic growth and development. The 26th September 1962 and subsequent 14th October 1967 Yemeni revolutions meant to date the most radical change in the social, economic, political and cultural life on the Arab Peninsula.

ECONOMIC DEVELOPMENT DURING EIGHTIES
Important structural changed took place during Eighties in the area of trade, payments, investments and capital flows resulting in formulation of a Yemeni national economic policy. Two main issues dominated the economies of the Arab Peninsula, namely food and energy. It was also during Eighties that the trend less food for more people emerged. On the other hand the Arabian Peninsula emerged for industrial countries an important market. The region itself emerged very much on the crossroad.

A new division came into being
THE ARAB RICH with material financial resources but no physical wealth, such as human resources, agricultural land, and rain water, and
THE ARAB POOR with limited financial resources but physical resources, such as human resources, agricultural land, rain water.

Arab Rich cover their food requirements out of their petrol profits from imports from non-Arab countries. Further Arab speaking peoples depend on rivers and water flowing from non-Arab countries. Many Arab countries mine ground water. This may be a justified use for now but cannot continue indefinitely. Local drainage, flood control and river training facilities should be incorporated within the responsibilities of an irrigation scheme or an urban or regional utilities.

Majority of Arabs live in Arab poor lands. Southern Arabia is the most populated part of the Arabian Peninsula. The social differences and challenges here are sharper. Their development is being further handicapped by different factors, such as lack of financial resources, education, poor technology, poor development policies and uncoordinated Arab policy.

SUMMARY OF THOUGHT
Petrol profits of Arab Rich should find its reproduction in Arab Poor Countries.
.
THE YEMEN ARAB REPUBLIC – AN AGRICULTURAL COUNTRY

earth every spring
turns into a painting…

Yemen Arab Republic has been basically and agricultural country. It had long been known for the export of coffee, cotton, textiles, fruits, hides, skins. The most important crops are: wheat, sorghum, millet, barley, legumes, grapes, bananas, coffee, dates and other types of fruits. The majority of population live on agriculture. Although its share in GNP during Eighties went gone down from 55 percent in early seventies to 29 percent in late seventies. Yet those engaged in agriculture represented still 83 percent of the working population.

Various factors were over time instrumental and were changing the conditions in the Y.A.R. One was the gradual emigration since early 1970 – 1980; the long draught from 1967- 1972, qat growing became an important agricultural activity at the expense of some previous export crops such as coffee, and cotton. While cotton, cotton seeds, and qat disappeared from the export list, both coffee, and hides, and skins maintained a relatively low but unstable export value. Other exports as live animals, fresh fruits, rock salt, dried fish and potato maintained also a low and unstable level.

On the other hand it was during eighties that some new items appeared on the export list which reflected promising but gradual efforts of Yemeni private sector. Those were export of biscuits, sweets, and textiles, as well as small quantities from cotton yarn during 1977/78 and 78/79. This shift was a welcome change. It should not be forgotten that such industries are not dependent on domestic agricultural base but are depending mostly on imported foreign inputs, which will always be governed by foreign exchange availability.

Y.A.R. exports during Eighties remained weak, especially as a result of Yemeni emigration and the decline in agricultural productivity. However a gradual process of manufacturing industries then started to have potential for the future and compensated for decline that had taken place in the export of traditional export crops.

After the Yemeni 26th September 1962 revolution and more precisely after 1970 when political and social conditions settled, the beginning of organized effort started to take shape. Y.A.R. begun to open itself up as a reaction to the long isolation which kept the economy and people at an extremely low level of economic and social development. Also due to the fact that any attempt or organized effort to improve and raise the level of living would have meant material, financial and skilled human resources much beyond that available to the country at the time, or even in 1970 when political conditions greatly improved.

IMPORTS
Imports experienced an unusual growth since 1962 revolution. They grew 1.2 times between 1960 and 1969/70, 46 times between 69/70 and 79/80, and about 50 times between 60 and 79/80. This impressive growth in imports took place in spite of the insignificant proportion of exports to imports. The import bill was largely covered by Y.A.R.s invisible account – emigrants – remittances, and due to the fact that prior 1962.
Revolution an extremely low consumption base was kept. The policy was to produce major food items within the economy. In fact the suppression of consumption and the insistence on producing the countries own requirements were not without their logic. The policies aimed among other things to keep all modern products and processes out of reach of the Yemeni people. It was thought that such products and processes embody a considerable amount of evil. Such policies were meant to certain ends, namely to keep the population isolated from what was happening in the rest of the world.

The people seemed to have accepted the argument and went on to accept producing for their own needs, and are therefore taking a lot of pride in their own efforts. This explains the strong liking that Yemenis have developed for locally produced products which is still prevalent until today. It can therefore be seen that while Yemen isolation deprived it from taking advantage of modern products and processes, such an isolation was in itself instrumental in pushing the population to use their domestic creativity to produce enough food and enough cash crops for exports and also produce other allied products such as domestic crafts which were within the reach of Yemeni technology.

It can also be fairly said that in spite of the low level of production and in spite of the highly suppressed demand for consumption, Yemen was able to have an underdeveloped, but relatively more economically independent base that was the case in later years. Yemen was then able to secure its own food requirements and was also and was capable of exporting cash crops produced within the country and according to its natural environment.

Clearly, there was a significant development in Y.A.R. imports, which assumed high levels especially after 1970. Various factors have contributed to these developments. One of the factors is that the Yemeni emigrants to the oil rich countries created a reverse flow not only in savings in form of remittances, but also in terms of an indirect market for goods. These remittances constituted during Eighties a major source of Y.A.R. s prosperity. The country had after 1970 enjoyed a certain degree of political stability, which greatly encouraged and allowed economic activity to carry itself on, especially in the private sector, which was a major force in recycling such remittances. The increasing available liquidity from remittances gave a tremendous push to commercial and trading activities. For the Yemeni private sector, the period of 1972 to 1980 was one of the ever- expanding prosperity. Suddenly an enormous market for foodstuffs, other consumer goods, and construction materials emerged, and kept growing.

Looking at the overall changes in the structure of YAR imports it could be said that such developments were positive as the change was more in favor of capital goods items. However much was left to be desired, especially in the area of rationalizing importation of non-essential items as well as in the area of increasing the efficiency of trading procedures and investment procedures, purchasing, storing and keeping proper inventories with a view of optimizing trade and investment and reducing the unnecessary utilization of countries foreign exchange reserves.

DEVELOPING OF BASIC INFRASTRUCTURE
The development of the basic infrastructure for which external financial resources like loans aid, grants, were subcontracted, encouraged the importation of machinery and equipment, and created an increased demand for goods, like pumps, generators, drilling equipment, heavy machinery, etc. all as pre requisite for any kind of production activity. Most of the subcontracted external financial resources during Eighties came from Arab governments, and a substantial portion from Saudi Arabia.

The sources of Yemen imports during Eighties experienced some interesting changes. During 69/70 to about 1971-72major suppliers of imports requirements were USSR, UK, France, and Australia. They have supplied 68,4 percent of total Yemeni import requirements. Beginning 1972- 73 the sources of Yemeni imports started gradually including countries like Japan and Saudi Arabia. Japan had in fact remained YAR major supplier during 72-73 till 76-77 when it was replaced by Saudi Arabia during 77-78 till 79-80, Japan taking second position. Only two European countries maintained their hold with a change in rank and that is UK and France. It may, however, appear odd for a country like Saudi Arabia to become Yemeni major supplier of its import requirements at the time when Saudi Arabia was not yet known to be industrialized country. With the gradual emigration of Yemenis and their concentration in the Kingdom, they created a reverse flow of goods that took place through Yemeni northern and eastern border. The bulk came as re export from Saudi Arabia, especially items like fuel, vehicles, electrical and other heavy machinery and equipment.

SUMMARY OF THOUGHT
Y.A.R. during Eighties enjoyed a fairly comfortable level of foreign exchange reserves as compared with other least developed countries. However, the accumulation of foreign reserves was not due to an internally generated productive activity, or an internally oriented growth, but due to savings resulting from export of manpower to neighboring oil rich countries, particularly to Saudi Arabia. The accumulation of foreign reserves took place within an extreme open door policy. Remittances and other financial resources were allowed to flow in without any restrictions and were utilized especially by private sector, and again without any restrictions whatsoever.

In addition neighboring Arab and European countries as well as international and regional institutions, responded with enthusiasm to the massive needs of YAR for all kind of services, assistance and support. In addition to transfer of emigrants savings it converted itself into a massive inflow of funds and resulted in the prosperity that YAR enjoyed during Eighties.

The Imamate established relations with countries like China, USSR, and USA. During 1959-60 major assistance came from USA, USSR, and China. But in 1971-72 major donors were USSR, China, German Democratic Republic, and former Yugoslavia. In 1980, for example, contracted loans were from Arab countries 46.2 percent, Arab financial institutions and Islamic bank 53,8 percent, out of which Western Europe 7.9 percent.

A sectorial distribution of contracted loans in 1980 was:
--building and construction: 22.3 percent
--electricity and water: 20.7 percent
--agriculture: 12.3 percent
--transport and communication: 5.3 percent
--education: 2.3 percent
--commerce: 2.1 percent
--mining and mineral wealth: 0.8 percent
--finance: 0.5 percent
--manufacturing: 0.1 percent

Total 48.3 percent were contracted for building and construction and electricity, water and transport and communication. All were sectors where YAR required urgent development and attention.

During this period most of the external resources contracted by Y.A.R came from Arab governments and financial institutions (62.7 percent), followed by Socialist countries (13.9 percent) mainly USSR and China, and lastly Western European governments 7.9 percent. Such resources were instrumental in building the infrastructure which was weak or almost non-existing at the time of 1962 revolution. The strict adoption of policy of non-alignment and neutrality greatly enabled YAR to attract increased financial resources irrespective of the source.

YAR economic independence was not jeopardized by the flow of loans, external loans, and grants, as loans were mostly earmarked for specific project. The "danger", if any, for Yemeni economy was to come from nature of its relationship with Arab rich.

SUMMARY OF THOUGHT
One thing remains clear and that is much of YAR infrastructure established after the 1962. revolution had been instrumental in breaking the Yemeni internal as well as its external isolation.

With such resources of flows, the individualistic nature of Yemeni traders in general, nature of Yemeni merchant class, and type of power structure during Eighties, the only logical policy had been an open door policy. Such a policy was also the major incentive for Yemeni emigrants to transfer their savings, whenever they wished or needed. Since the growth of remittances was higher that the use of remittances, YAR was able to accumulate a substantial level of foreign exchange reserves during Eighties.

It was also during Eighties that the economy gradually changed from relative economic independence with high degree of underdevelopment under the policy of isolation to gradually more integrated within the economies of the neighboring oil rich countries. It also became integrated in the world market from where YAR during Eighties obtained its basic and other requirements for all kinds of goods and service.

REASSEMENT
Various factors at work begun to change position end of Eighties, firstly of foreign exchange reserves and as the consequence its national economic policy. The economic "crises" that affected the region since 1986 was the product of collapse of world oil prices, and decline of productivity and investment. What then were the alternative courses of action available to YAR policy makers: to rationalize in a more meaningful way the use of recycling of massive flows to the best advantage of Yemeni economic and people.

The events that followed in were:
further, decline in the labor market in Saudi Arabia and hence decline in remittances
as consequence stabilizing of external financial resources, like aids, loans, grants, due to the fact that there were less financial resources available in the region as such,
in Y.A.R. building of the institution of the State and hence increased
--government spending
--discovery of oil in commercial quantities,
--building of remaining infrastructure,
--begin of provision of basic commodities to citizens, like water, electricity, health, etc
--begin to establishing an industrial and agricultural base.
--exploration and assessment of mineral and other natural wealth.

One of three measures usually used in such situation is imposition of restrictions. The other two exchange control and financing of the deficit. Y.A.R. then opted for imposition of restrictions. This trend has lead to greater discussion about the need to develop local production capacity. More specifically "the crisis" stimulated the debate over the need for a local agro and manufacturing industries. Yemen emerged no longer a quick profit market of the Seventies. Increasingly the country begun to search for serious long term investment. Foreign investors were encouraged through investment law No. 18 which was after unification re-written as to provide even greater incentives to interested parties.

Y.A.R. went on also to encourage various forms of industrial cooperation, ranging from joint ventures, licensing agreements, co-financing, etc. Industrial enterprise was a priority items at the Ministry of Economy which gave further incentives through import license privileges.

Estimated Yemen then had a good business and investment climate in the region. Yemen is still heavily dependent on importation of goods for the provision of its most basic needs. This dependence extends from basic commodities up to heavy machinery in the years to come.

During Eighties begun also an obvious trend and an increased government involvement in overall investment and its strategies. The government spelled priorities, basic and strategic industries and also begun to provide basic commodities and services to its citizens. It was then supplemented in its development efforts by such dynamic sectors as the cooperative development movements, the Yemeni private sector.

The government institutions were complemented by more than 20 public and mixed corporations. The areas that were dominant in investment were agriculture, building and construction, housing, transportation, communication, mining and energy.

YEMENI DEVELOPMENT MOVEMENT

am never slave
except to my guest…

Yemen Development Movement during Eighties became known as Arab phenomenon, was based on local initiative, and represented a bottom up, self reliant and decentralized mechanism for meeting basic rural infrastructural needs, roads, drinking water, schools, health facilities and other projects based on local priorities determined at the local level in the rural areas. The increased flow of remittances to rural Yemen – 1,5 Billion in 1979 was an important fact in the role of this unique Yemeni development movement. The movement in many ways awakened the rural economy in Yemen, and changed the life style since the rural areas lived in isolation and people spent incredible effort simply to survive.

The principles of self-reliance, private initiative have their roots in centuries of the Yemeni isolation from the rest of the world. The organization of tribes was based on leadership of the heads of each tribe. Because of the absence of a strong central authority due to mainly physical constrains, a tradition of local governments developed over time in Yemen. These local village organizations focused almost only upon law and order, and not economic development, as evidenced by the relative absence of infrastructure, and all social sectors. But their creative talents were applied to the imaginative agricultural terraces in the mountains.

This movement had also its roots in the very history and character of the Yemeni people. Which lived isolated from the rest of the world.

During eighties this movement had dramatic effect on social, political and economic structures of the villages. By linking rural communities with other areas, the movement raised their awareness of the potential economic development. Perhaps the most unique feature of the movement was the fact that the villagers were prepared to contribute a major financial part to their projects and undertakings. Thus confirming that development is for the people and by the people, that otherwise it has no "taste" and no meaning.

BEGINNING OF FACTORY INTERPRISE
The largest and most successful companies established agencies for product lines. It is also through agency representation that the beginning of the factory enterprise begun in Yemen. In the model of import substitution, former agents for soft drinks, pumps, diapers, etc. paints were erecting local processing plants. Yemeni businessman, generally, do not like to produce under license, preferring instead to purchase machinery and manufacture local brand. Increasingly as a result of government import restrictions during Eighties they went into commercial agriculture, and manufacturing.

In this context the "Saudi connection" played a significant role as the source of machinery and equipment supplies. Due to the large presence of Yemenis in the Kingdom, but also due to the fact that a substantial portion of external financial resources loans, aids, grants, and now investment has been coming from Saudi Arabia. It has been also through "the Jeddah" connection that Yemeni workers first came in touch with Western products and technology, and in particular with American products.

SUMMARY OF THOUGHT
Starting with unfavorable economic conditions characterized by severe shortage of physical and economic resources, the Yemeni economy during Eighties managed to achieve a remarkable transformation from traditional subsistence economy to a dynamic and relatively diversified one.

With the discovery of oil in Yemen a tremendous amount of speculation has occurred about the future of Yemeni economy. Certainly the presence of commercially exploitable quantities of petroleum is good news for the country. Although oil prices may continue to fluctuate in the coming years, it is not relevant issue for Yemen due to the fact that the country has never had an important raw material available for sale on the world market. Yemen oil finds are, however, significant.

But it is when you have oil that you need the ideas. What is oil without ideas? Especially when the reserves are not infinite, it is vital to find ways to save as much of it as possible. And new methods, too, that no one thought possible a few years ago. It also means finding ways and coming up with solutions to make its use more efficient and cleaner with new generation fuels.

As result of rapid growth in the 1970 and 1980 and the introduction of generous transfer to large portions of the populations, the growth rates were among highest for countries at their level of per capita income. Also income inequality was low, and improvements in social indicators were dramatic. A reorganization of private sector end of Eighties lead to a more controlled growth, a slower and qualitative development with stress on social return as preparation for faster development related to the finds of oil.

22ND MAY 1990 YEMEN UNITS INTO REPBULIC OF YEMEN

like a candle I glow
while burning away…

As the history of Arabia is one of perpetual motion and covering phenomenal distances. So has Yemen over the past years made impressive strides forward and set the stage for sustainable nation building. It has introduced multiparty system, embarked on democratization and local government experiment. It is committed to free market and enterprise economy. Further implementation of economic reforms, and added rationalization and efficiency will create an attractive environment for investment. Yemen has been scripting a new economic future for itself as it draws big plans.

The basis for NEW YEMEN is one of intensive development in many areas during which it aims to explore new ways for creating jobs and production opportunities in a constrained industrialized economy explore economic liberalization for exports while further develop a culture of entrepreneurship with and economic policy of diversification reducing dependence on oil local governance experiment which is currently in process to identify resources both human and natural according to the governorates added is importance of human choice policy of high principles to policy of implementation and a foreign policy geared to maximum maneuver.

History teaches us that the path to success is always arduous, strewn with challenges and hurdles. However nations like Republic of Yemen stand this test of time in order to achieve political, social, economic and cultural harmony. Yemen journey is an incredibly fast from traditional, underdeveloped start to a modern developing economy at present.
Investment, for example, is now open for all and numerous fields, including oil, gas and mineral. Oil and gas have become foremost sectors and backbone of the economy. Efforts have been exerted to create a favorable climate for foreign investment, and facilities are being offered to available resources.

THE YEMENI INVESTMENT LAW

Aims at mobilizing and facilitation the influx of potential local Arab and foreign capital and providing the private sector with the impetus for more involvement and investment endeavors.

FACILITIES IN INCENTIVES
General Investment Authority acts as one window authority for investors. Simplified procedures for project license are now maximum 30 days for health and fishery projects and 15 days for others. Duty exemption of fixed assets required for establishment, extension and development, tax holidays from 7 years to 16 years, duty drawback for the exported portion of production.

GUARANTEES IN INCENTIVES
--Guarantees for project funds and property again nationalization, seizure and restrictions
--no difference between Yemeni and foreign investors
--ease of capital and profit movements
--investors freedom of choice and operation
--freedom of administering the project with regard to employments, pricing and products and export
--freedom to buy/lease land/property
--training funds for labor-intensive and export oriented project
--easy procedures for bringing in skilled expatriates

Yemen is also a member of
--The Inter Arab Investment Guarantee Corporation
--The Islamic Corporation for the Insurance of Investment and Export Credit
--Multilateral Investment Guarantee Agency
--International Convention for Settlement of investment Disputes

All procedures were simplified to attract local, Arab and foreign investment.

INVESTMENT OPPORTUNITIES IN YEMEN

Yemen most obvious investment opportunities lies in oil, gas, mineral exploration, agriculture, fishery, infrastructure, tourism, including the whole range of economic, production and service sectors aiming at creation of new job opportunities and application of appropriate technology.

Opportunities are for specialized agricultural production, including fruits, and vegetables, oil seeds, spices, garden seeds and flowers that could be attractive to innovative local investors as well as foreign.

Conditions also favor specialized livestock and poultry operations and fish and shrimp farming. Food processing for domestic use and export also has an enormous potential for expansion. Also live animals, hides and skins, which need to be upgraded.

The country will only benefit from investment when the capital inflow will lead to the increase in the growth without any changes in trade conditions. Benefits from investment are also for the government to get more revenues benefit through professionalism and acknowledgment of other countries economies.

Method of Investing
direct, joint ventures, the Adeni Free Zone

THE ADENI FREE ZONE

here we are all strangers
strangers are relatives…

Through history Aden has been a port of commercial importance and a meeting point of ships coming from the Red Sea, from India, from Persian Gulf and from East Africa. The port of Aden is also one of the worlds largest natural harbors located at the crossroads of the Red and the Arab Sea with direct access to the Indian Ocean. Once a world top ship berthing port and the second largest bulk port is set today to remake its name. Aden Free Zone now aims at facilitation industrial development and the flow of trade between countries, i.e. among Indian Ocean community of countries of which Republic of Yemen is the founding member. It is further initiating economic cooperation among the Red Sea countries. Further to serve as cooperation among countries and act as regional information highway and investment center. The private sector has taken the lead in financing and operating most of the projects need for regional growth. Yemen may in fact play the role of a bridge in the Indian Ocean community now fastest growing behind the Asia-Pacific Rim. To the east is Japan as global economic superpower, to the West an increasingly united Europe revitalizes its former industrial base, and is promoting itself as "knowledge data bank".

The Aden Free zone project includes industrial warehouse estate project. It will include also Aden industrial and warehouse estate, construction of a new convertible gas turbine plant, development of a new air cargo village and construction of an international airport, new sewage and water treatment facilities, and development of new tourist facilities.

FREE ZONE INCENTIVES INCLUDE
Exemption from taxation on industrial and commercial profits for 15 years with a possible extension for a subsequent 10 years, 100 percent foreign ownership permitted and encouraged free transferable capital and profits are not subject to exchange control income tax exempted salaries.

Due to Yemen excellent geographic position on the main shipping route between Asia and Europe, and en route to Australia and South Africa, both Europe are most important trading partners, the Aden Container Terminal not only will reduce shipping rates, but it acts as natural product distribution and service center.

The world "middle" in Middle East carries great significance to the region in trading terms. Through history, the Middle East has functioned as a link between East and West. Of all possible locations Aden is the most strategically placed, for its offers the minimum deviation of the East-West route.

Aden is becoming a transshipping location to recon with.

Also all other Yemeni ports are ideally positioned for economic growth.

YEMEN – UNIQUE TOURISM PRODUCT
Yemen has excited the imagination of travelers through the ages. Not only unknown but also unreachable and therefore unknowable, Yemen was the most curious in its customs and philosophies, the most unique in its fauna and flora where its landscapes and people changed from one place to the next.

Today travel is no longer a philosophical matter, it is business. In the days of instant information, we have lost a sense of purpose and more importantly and sadly – a sense of history. But if we were to look over the whole world to find out the country most richly endowed with all the wealth, power and beauty which nature can bestow, some sort of paradise on earth, I should point at Yemen. Yemen is incomparable in the wealth and variety each terrain boast it charm. Yemeni reality is complex and various.

Yemen as international tourism destination will not take off until we go beyond a simple "pure – tourism" approach, it means development of cultural tourism. Yemen comparative advantage over other destinations on the Peninsula lies in the thousands of years of cultural heritage. That should be developed and promoted with tourism. It should project Yemen as a great civilization. This age old civilization rightfully deserves to be viewed in retrospect. Yemen has a cultural heritage of exceptional antiquity.

Scenic beauty, dramatic terrain and friendly people, Yemen has the magic formula that appeals to tourists worldwide. Development of a tourism culture despite the fact that the "raw materials" for developing of a culture exist in abundance. Tourism can bring visible prosperity and employment opportunities in short time. That "miracle" is distinctly achievable.

OPEN SKIES

… the strength of a country is no longer measured by its military might, size of population, geographical situation of material resources. The strength of a country is measured by the wealth of its scholars, and its scientists, by its innovative capabilities, and ability to discover, achieve and apply..
Nagib Mahfouz. Egyptian Nobel Price winning novelist

END OF GEOGRAPHY – SPECIALISE AND GLOBALIZE

think of us such thoughts
bridge distance…

Driven by a vision and committed to the challenge of tomorrow, the world today is going through an information revolution and we know that man is distinguished from other creatures by the brain which is the secret of the Creator, where the science and information are stored, the place where distinction, superiority, vision, and foresight lie, and the laboratory of experience and conceptualization. Whatever correct information stored in the mind will give rise to wonder and admiration.

Sweeping changes in technology continue to transfer our lives. The known is being replaced by the "new". No doubt the real wealth of any nation is made up of human resources. They are the power that achieves development in all walks of life. They are the power behind ever-changing ambitions. This is the way towards glory, dignity and success.

Quality, for example is manifested in myriad forms, in products, services and most vital of all, the people. Each striving tirelessly to achieve only the very best and nothing else, every time, all the time. Setting quality standards all the way and achieving them time after time.

INDUSTRY THAT CREATES CULTURE WHEN LIMITS BECOME OPPORTUNITIES

In the highly industrialized countries the explosion of civilization into a myriad of micro-cultures, and social fragmentation have made markets less and less transparent, creating new problems for industry accustomed for over a century to impose its products on the market and now obliged to completely reverse its view point. As a result of reflection on these matters, traditional methods of interpreting the market of product planning and of projecting its own image were no longer suitable. It is useless to try to understand a market that is evolving constantly. This mean constantly trying to catch up.

In the recent years the custom of entrusting total responsibility of creativity to internal structures has changed – a new trend is emerging, extending this responsibility to a more complex system of interrelationship between project, industry, environment and the market place. In a market that is losing its transparency and becoming opaque it is understood that instead of selecting its markets it had to transform itself becoming a transparent structure which the markets could turn to as representative of TASTES and TRENDS and with which they could identify.

In a society in which the exchange of information and knowledge grows daily, the emerging image of a company is increasingly represented by its cultural reality and the consistency of behavior. What a company does becomes much more important that what is says. The culture of our time is also an expression of both, a company’s professionalism and its ability to absorb external professional knowledge which moves at different levels and evolves faster and faster. The result is this awareness is that industry does not only create culture by earmarking resources for sponsorship programs but by talking full responsibility for its own role, which is to play its part in the complex, multifaceted game of contemporary society.

Late Eighties and early Nineties showed that a limit did in fact exist. In other words we realized that the environment and its protection had to put constrains on production methods and on consumer habits. That we had to bring environmental awareness to new technologies, and that these would have to find development solutions that were compatible with the environment. This is the huge cultural challenge that will mark the Nineties. And one of its basic tenets will certainly be the passage from the culture of production to that of regeneration.

In other words we can no longer afford eternal products and the process leading to the first of a product will also have to plan the details of its demise. A trend towards a sort of cyclic nature in the research/production/consumer system. It is a new idea, but it is century old if we consider its affinity with traditional agriculture, which never knew the existence of waste because everything was recycled in a cyclical system. The idea will be a winner, if attitudes are changed. – designers by creating products that are more easily and more economically recyclable, institutions by creating mechanism that reward and encourage recycling, consumer by helping the whole complex system to function by their behavior.

In order to do things differently one should know how to go against the tide, knowing how to run the risk of mistakes on its own rather than relying on just experience, connecting local needs with global resources, and taking every opportunity to grow and expand.

KNOWLEDGE SOCIETY
Natural resources and human resources are our core competencies. Particularly, the rich bio-diversity is the wealth. During the last century, the world underwent a change from agriculture society where manual labor was the critical factor to industrial society where the management of technology, capital and labor provided the competitive advantage. Thus the information era was born, where connectivity and software products drove a part of economy of a few nations. In the 21 century a new society is emerging where knowledge is the primary production resource instead of capital and labor. Efficient utilization of this existing knowledge can create comprehensive wealth and also improve the quality of life in the form of better health, education, infrastructure and other social indicator. Ability to create and maintain the knowledge infrastructure, develop knowledge enhanced their productivity through creations the prosperity of this knowledge society.

Weather a nation has arrived at the state of knowledge society is judged by the way the country effectively deals with knowledge creations, and knowledge development in all sectors like IT, industries, agriculture, health care.

GREEN REVOLUTION, LAND IS LIFE, LAND IS DEMOCRACY

That is belonged to us
That we belonged to it
The seas wild as silk
The spring rains,
The apricot trees,
Grapes, mangoes, melons and coffee
The dusty mountains
Green geometric terraces
The gold brown desert
The stars ...

It is the right time for Yemen to embark upon the green revolution, which will enable an increase in productivity of cereals. The challenge is to double productivity with lesser areas being available for cultivation. Further the type of technologies needed, proper training to the farmers, additional modern equipment for crop preservation and storage. This second revolution would mean graduating from grain production to food processing and marketing. While utmost care should be taken to environment and people, leading to sustainable development and empowering the rural people. An integrated connectivity approach such physical connectivity by providing roads in rural areas, electronic connectivity by providing reliable communication network and knowledge connectivity all as prerequisite for economic connectivity.

Good teaching and interactive teaching are possible through tele-education and inspired teachers. Healthcare facilities for rural and remote village can be provided by mobile clinics. The farming community with advanced water conservation and management methods can increase productivity.

ENERGY FOR TECHNOLOGY

for the earth is too wide
for a free man to put up with
humiliation or hatred!

It is unlikely that the unseen river that flows below the garden referred to by the Prophet Mohammed (PBUH) could have been Oil The unseen river flows from springs of creativity that have remained alive through all Arab glory and Arab frustrations. Energy pervades every aspect of human life. It is an important motor of economic growth, while in the environmental dimension, energy extraction, conversion and use cause environmental stress at global and local levels. In the social dimension, energy is a prerequisite for the fulfillment of many basic human needs and services, and inequities in energy provision and quality often manifest themselves as issues of social justices.

Energy has a variety of forms – chemical, electrical, mechanical, nuclear or thermal. Energy from thermal sources such as the combustion of fossil fuels (coal, oil, or natural gas) and biomass (such as wood) and from nuclear fission (of uranium) is called primary energy. Historically, global energy consumptions has considerably outstripped global population growth. In the past forty years alone energy consumption has trebled. About half the worlds population depend for energy on biomass fuels – charcoal, dung, straw or wood and human and animal muscle power.

For the rest of the world’s people oil is the main source of energy accounting for about 40 per cent of their energy consumption, coal accounts for about 30 percent, natural gas accounts for about 20 percent, hydroelectric power for about 6 percent and nuclear power for about 4 per cent. Uranium is a non-renewable source of energy, like coal, natural gas, oil and peat. About one third of the energy in use today is in the form of electricity.

Renewable energy resources have great advantages but they also have some disadvantage. The sun, ocean, wind and rivers can, of course, never be depleted. Renewable sources are very much less damaging to the environment and produce less waste than burning fossil fuels or using nuclear power. Wind power is effective in uplands and coastal areas. Tidal power is also potentially useful sources of energy. Solar power using the suns rays to provide heat directly or to generate electricity has obvious applications in countries where the sun shines at times at which power is required. In these countries it is ideal for small scale use such as driving pumps for irrigation or for cooking.

Energy for Technology aims at changing of political culture that has prevailed during this century and work our economics for economic relations between energy producing Arab countries and industrial countries to be established on the basis of serving the interests of all and benefiting all participants. The purpose would be to identify the imbalances between cost of energy and cost of technology. At heart of such undertaking is the ethical principle of cooperation, and to achieve safety, security and prosperity for the benefit of all concerned based on commercial exchange of ENERGY FOR TECHNOLOGY. The ultimate goal is to achieve ECONOMIC PROSPERITY of the Arab nation that in turn will ensure the process of further democratization and openness in the region, and as such will ensure political, and economic stability, and security in the region.

The ultimate goal is also to reach an united Arab market, (Arab Economic Union) that will increasingly attract predominantly European and international investments in the United Arab Market, and further develop an equal partnership with EU.


A WEALTH OF DIVERSITY
The modern world proud of its achievements, preoccupied with its anxieties, is prone to be concerned only with the present. However, every age is immediate "God". The fact is that to understand the present we must understand the past – and that implies acceptance of the past on its own terms and a leap of imagination is require to recapture it. That does not come naturally and to the current generation. Memories grow shorter and expectations longer than their fathers.

In the concert of the world, the orchestra is made up of all the centuries past and present, and they all play at the same time. But each has his eyes fixed upon his own stand and on the conductor’s baton, he hears nothing but his own instrument. As we are both a part of the orchestra as well as a part of the audience, we must offer a synoptic, symphonic response.

While history of Asia is largely the story of the many countries of the continent, there are magical inter-relationships which are not always easy to define.

APOLOGIA
A poet once remarked, we must no longer be satisfied with isolated lamps; we should have a festival of lights.

The Arab Peninsula once again stands at the cross-road of continents, influencing events in Asia, Africa, and Europe. Unlike other peoples in Asia, the Arabs remain trans-continental in their outlook and involvement. The Arabs view themselves as bridge between the continents, belonging to each of them but not circumscribed any single one. Economic ties of the Arab counties may get stronger with Europe one progress will be achieved over Palestinian issue and more recently Iraqi issue, partly because of investment needs and partly through externalization of some production facilities of the highly industrialize European heartland.

Yemenis, for example, were great traders, scholars, rulers, astronomers and sea-faring people. Once upon the time, some two thousand year ago, the Yemeni caravans transported to the shores of Mediterranean incense that grow on their mountain regions and all the spices and aromatic of the East. But also without revealing its origin silk from China. Hence the expression "Arabia Felix", Happy Arabia, given to the Roman geographers to designate this fabled land – Yemen

REFERENCE
--Yemeni Central Bank Reports
--World Bank reports
--UNDP reports
--my own unpublished notes
--all verses are from Lyrics from Arabia