Business

Finance Minister aims to achieve 2 percent economic growth

National Yemen

Minister of Finance Sakhr Al-Wajeeh

By: Abdurrahman Shamlan

Finance Minister Sakhar Al-Wajih has stated that national economic aims for 2012 include the achievement of two percent growth and recovery from a $2.5 billion deficit by way of foreign aid and loans, reported Reuters.

Following the signing of loan agreements with the Arab Monetary Fund (AMF) in Abu Dhabi, Al-Wajih said on Tuesday that Yemen’s objective is to achieve 1.5 to 2 percent growth and stated that the country would depend largely on borrowed money and foreign aid to accomplish the growth.

The AMF agreed to issue two loans, to be used to help the Yemeni government make payments and conduct economic reforms. The two loans totaled $205 million.

The AMF has so far issued loans to Yemen totaling $1 billion.

Al-Wajih stated that the Ministry of Finance plans to introduce an $10 billion emergency budget for 2012 and 2013 years. However, at the same time, the ministry will be forced to contend with a $ 2.5 billion deficit.

“The deficit will be covered by way of financial assistance from the IMF, the World Bank, the AMF, treasury bills and ‘sukuks’ (Islamic bonds),” said Al-Wajih.

In 2011, the Yemeni economy shrank by 10.5%.Although the state of crisis eased off following Abd Rabbu Mansour Hadi’s election in February, the International Monetary Fund (IMF) has predicted that Yemen’s economy will nonetheless contract by 0.9% in 2012.

At last month’s Friends of Yemen conference in Riyadh, Saudi Arabia, foreign donors pledged four billion dollars in aid to Yemen. However, some countries have yet to follow through on donation promises.

Last month, during a visit to Marib governorate – where most oil pipeline and electricity line sabotage attacks occur, Oil and Minerals Minister Hisham Sharaf stated that Yemen had lost nearly $2 billion as a result of continuous attacks against oil pipelines.

Many Yemeni citizens have continued to express doubts regarding the Yemeni economy’s ability to grow as long as stability and security have not been established.

Mohammed Ali, a trader and owner of currency exchange shops, told the National Yemen that the Yemeni economy would not see improvement this year; on the contrary, he stressed the position that the economy would continue to shrink.
“How on earth could the economy grow this year?” Ali asked aloud, before exclaiming that sabotage attacks only persist amid a state of unrest.