Finance Official Laments Economy

Dr. Abdullah Mikhlafi, Undersecretary of the Ministry of Finance said last week that he expected the stock market to be launched over the next year. “The issuance of a presidential decree about the establishment of the securities will help accelerate the establishment of the market.

“The market’s success is linked mainly to a group which will work in the Securities Commission,” he said.

He confirmed that a well-qualified staff is needed in order to ensure the success of this market. Mikhlafi emphasized, “it is not a shame if we benefit from foreign investment, in order to improve the Yemeni economy and aids the local market.”

Al-Mikhlafi went on to criticize the State’ administration of resources, “Yemen has plenty of resources, but the poor management of these resources have affected the overall revenues of the State.

“I believe that the problem in our country is not a problem of economic resources, but it one of a lack of experience in managing them. We have diversified economic resources, but regrettably, they have not been managed optimally because of the funding gap experienced by the Yemeni economy”.

“The current resources are inadequate compared to our many responsibilities. The funding gap arises from the imbalances in the State’s budget. Thus, it hampers the exploitation of the available economic resources as well as the mineralresources.” he added.

He confirmed that Yemen has non-oil economic sectors, such as agriculture, tourism and manufacturing industries, but the lack of the implementation of the State’s budget and poor economic plans have a significant, negative impact on economic progress.

Al-Mikhlafi called for the increase on subsidies for oil derivatives, pointing out the additional appropriation of more than YR 200 billion at the end of 2010, mostly allocated to support oil derivatives.

He confirmed the stability of the riyal exchange rate, pointing out that when the exchange rate with the dollar increased to 260, this was a result of speculation that led to the rise of the dollar exchange.

“What controls the exchange rate is the amount of production of goods and services. It controls the stability of exchange to satisfy the needs of society and to identify the state’s need for hard currency. If the country has a surplus in production, the state will be capable  through export of providing what it needs from the hard currency”.

“The current situation has witnessed serious problems because we do not have sufficient goods and services; therefore, we still need subsidies from outside. When we need to purchase what the society needs from the outside, we need foreign currency.  Accordingly, the price currency will remain on the rise”.

“Recently, the stability in exchange rates is due to the successful fiscal policies of the Central Bank in controlling the exchange market and punishing speculators and moneychangers who are trying to manipulate the exchange rates,” he concluded.