The story of the bleeding of the private sector in Yemen

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(Aden Al-Ghad) Consequences:

The private sector in Yemen is exhausting its last energies in the face of the great challenges imposed by the Houthi coup and the war, although it has proven its resilience during 9 years of facing abuses and the collapse of official institutions before it, because the business environment has become extremely a delicate situation, and bleeding economically and socially due to Houthi abuse.

A few days ago, the Yemeni government condemned the attempt by the Houthi group to besiege the home of the businessman Tawfiq Al-Khamiri, with thirty cars loaded with gunmen, led by the leader of the group, Nasser Al-Arjali, accusing the group of carrying out of a plan to bulldoze the private sector and eliminate well-known business houses in the areas under its control, for the benefit of companies and investors affiliated with it. .

This incident is one of the recurring incidents in areas controlled by the Houthi group, which has prompted many investors and businessmen to transfer their capital outside Yemen or outside the areas of control of the group, while others have been forced to live with the challenges and adapt to them , which is something economic researchers praise. .

These researchers believe that major companies and business houses, through their firmness in the face of the challenges of the coup, the war and the abuses of the Houthi group, have played an important role in covering the gap caused by the absence of official institutions from performing their services, and facilitated the access of many of these services, albeit at their lowest levels, to millions of people. .

Yemeni researcher Abdul Qader Al-Maqtari points out the contribution of the private sector to facilitate the movement of basic and necessary materials to the targeted people, and enable international aid organizations to obtain logistics services such as storage, transportation and distribution. In addition to everyone. of that, the private sector has maintained the presence of a group of Yemenis who have monthly incomes. After the interruption of employee salaries for 7 years.

Repulsive environment

In his latest reports on Yemen; The World Bank estimated direct and indirect losses of the private sector during the first three years of the war caused by the pro-Iranian Houthi group at about $27 billion, after 25 percent of the total number of companies in Yemen were forced to close.

According to the report, Yemen has seen a decrease in the sales of commercial companies by more than 80 percent, according to the report “Country Economic Memorandum for Yemen”, explaining this by security problems in conflict areas, economic devastation, financial stagnation, the destruction. of the assets of companies, and the suffering of the companies that survived these damages. , of major service disruptions and a decline in its customer base.

These conditions prompted companies to reduce the number of employees, and 20 percent of companies moved their operations either to areas within Yemen or abroad.

Al-Maqtari reports to Asharq Al-Awsat that the environment created by the coup and the war in Yemen prevented official and unofficial institutions from obtaining accurate data on the economic situation in Yemen and the deterioration occurring in various sectors, warning that the percentages given of researchers or institutions often remain estimates, if obtained through imprecise or incomplete survey work.

For example, several authorities estimate the rate of layoffs in the private sector at approximately 55 percent, while the number could be much higher than that, especially since many companies have completely stopped their activities, and others have reduced their working hours, and this has been accompanied by a reduction of workers’ wages However, on the other hand, other alternative companies emerged from the war economy, which he describes as the “black economy”, and attracted part of those laid-off workers.

But these new companies arose in simple and usual specializations, and were not active in specific specialized fields, which is another damage to the Yemeni economy, because the country will resort to doubling the import of specific goods and services, while highly skilled workers will make rounds emigrate, or their members will resort to practicing professions. It is not suitable for their departments.

The rise of the “black economy”

The Houthi group claims that its measures against the trade and investment environment protect and encourage the local product, through the use of appropriate financial taxes and customs policies, limit the migration of local funds and prevent unfair competition for the local product, in a clear contradiction . to the destruction that its royalties have caused to the private sector, and forcing it to serve… Its project, complete subordination to its leaders, and complete withdrawal from the increase of its own economy based on the expense of the state economy.

Economic researcher Adel Shamsan describes the confrontation made by Yemeni businessmen and business houses in areas under the control of the Houthi group as “courageous”, and opposed to the magnitude of the challenges imposed on them by the coup leaders. The continuity of those commercial. houses helped in attempts to save the economy and development in Yemen, explaining that they have endured a lot. From the consequences of war and coup.

During his conversation with Asharq Al-Awsat, Shamsan lamented the ongoing Houthi abuses against companies and business houses, and even small investments and business projects, which would ultimately lead to the collapse and complete deterioration of the private sector, to be replaced by companies that. the coup plotters are constantly establishing, underlining the need for quick and urgent interventions. To prevent this collapse and avoid its dangers.

According to Shamsan, the Houthi group continues to “build its black economy based on the business of smuggling, speculation on foreign currencies, looting the revenues of state institutions and blackmailing commercial companies at a high rate, and there is no real force standing in the face of this invasion except for the private sector deprived of any protection.”

Economic researcher Abdul Hamid Al-Masajidi believes in his interview with Asharq Al-Awsat that “the private sector needs a healthy protective environment for its growth and to restore its role”, and in this direction he relies on “the role of the legitimate government”. in securing the liberated areas and enabling companies and businessmen to join in partnerships with… The government is unable to provide services that suffer from a deficit, such as electricity.”

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