Minister of Industry and Trade: “We expect to join the World Trade Organization in July”


National Yemen

Yemeni Minister of Industry and Trade

Interview by Fuad Yahiya for the National Yemen

Dr. Sa’ad Al-Dein Taleb, Yemen’s Minister of Industry and Trade, speaks with the National Yemen about Yemen’s efforts and likelihood of gaining membership in the World Trade Organization; the threats currently facing Yemen; and important issues surrounding the nation’s economic recovery and future prospects for economic growth.

Fuad Yahiya: Would you please tell us about the result of your visit to Geneva and what developments there were with regard to the World Trade Organization?

Sa’ad Taleb: We went to Geneva to work towards joining the World Trade Organization. During the meetings, we focused on what had been achieved regarding conditions and other procedures with Ukraine after having reached agreements with other nine countries. Yemen was approved to join the organization in the coming months on the condition that we finish our negotiations with Ukraine. Therefore, we attended another round of negotiations with Ukraine, which unfortunately presented challenging conditions for us as a less-developed country. We have our own conditions for joining the organization and asked Ukraine to accept our conditions and agreements with the other countries – which in fact have more favorable conditions than those of Ukraine, including the U.S., European Union, Australia, Japan and China. Negotiations with Ukraine continue because it has special requirements and, as a matter of fact, faces a lot of pressure from the world’s nations to conclud these negotiations with Yemen during the coming month.

F. Y: What benefits will Yemen receive from joining the World Trade Organization, and why the rush to join the organization?

S.T: As a matter of fact, Yemen is not in a rush to join the organization. When observing the situation, the organization includes over than 140 countries. We cannot be part of the international market unless we join the organization. The decision to join the organization was made twelve years ago and this shows how late we are in joining the organization.

F.Y: How do you see the government’s role in fighting terrorism, which is now spreading over the country?

S.T: When talking about the government, we talk about a president, government and a parliament. This government has certain devices and forces to enforce its control country-wide through security forces. But unfortunately, these security and military forces have recently been in conflict. Also, the Ministry of Defense cannot enforce its control over all the military forces in the country. All security and military forces should work together and stop fighting so that they will be able to fight in-country terrorism.

F.Y: A committee was recently formed to reach a comprehensive national dialogue. What do you think about the national dialogue in the present circumstances Yemen is passing through?

S.T: I believe the national dialogue is necessary to satisfy the country’s political factions. As a matter of fact, any country that wants to be strongly-built must go through a comprehensive dialogue for all political factions. However, this dialogue should be carried out in safe conditions rather than at gunpoint. We appreciate the efforts carried out be President Hadi and wish him all success.

F.Y: Coming back to the economic side – and especially that of industry, which suffers from many problems. What did you provide the industrial field in order to improve it?

S.T: Industry is a long term process that includes investing in machines, equipment, manpower, training and industrial capabilities. It is a long-term process in the sense that we can see the results of our work only years after starting it. In addition, industry is in need of hands being activated and itgreatly depends on sources of power, which we severely lack in Yemen. In our country, there is a serious crisis – not only in the availability of power, but also in its prices. So our national industry loses a lot of its competitive traits as it depends on high-priced sources of power. Though we have cheap gas that can be a good source of power, it was unfortunately sold to other countries which caused large loses for the country. We could have used it to make cement and generate power and many industries would have been provided with cheap sources of power. If such conditions are not available, we will have to go through a lot of obstacles and we continue to hold discussions with many of the cement factories to overcome these obstacles and continue producing cement.

F.Y: Do you relate the reasons behind the high prices of cement to the suspension of cement production?

S.T: The increase in cement prices could mainly be attributed to the suspension of production in Al-Barah cement factory. However, when it resumed operations and was again producing cement, prices returned to the normal level.

F.Y: Why weren’t the issues surrounding the textile factories in Sana’a and Aden solved until now?

S.T: Though a large amount of money was invested in Sana’a’s textile facotry, it still requires capital for its reactivation. Besides, there are other administrative problems that must be solved first. We had a meeting with the administration council and agreed on new modifications that we hope to have carried out soon.

As for that factory in Aden, it stopped functioning years ago and cannot begin functioning again with its current inventory of machines and equipment. It requires huge investments that cannot be provided – except by the government – and requires help through cooperation with other sectors, including the private sector. We are working on possible solutions for improving the factory in Aden, as it actually doesn’t cost the government much in terms of officially-registered employees.

F.Y: Is there any possibility of Yemen’s industrial areas being used?

S.T: Though we specifically targeted industrial areas and bought them to be owned by the Ministry of Industry, we still lack other factors that would enable us work properly on them, including sources of power. Some of these industrial areas were invested while others weren’t, as they still require a lot of infrastructure investment, which won’t necessarily be solely carried out by the government. Investments in the private sector and in other countries are also possible ways of activating the rest of the industrial areas. These solutions were included in our work paper during our visit to Turkey last week. Here I would mention that theTurkish government signed a contract to invest in industrial areas in Hodeida in 2010, but this was unfortunately suspended due to the crisis which Yemen passed through last year. Turkish interest to invest in Yemen is clear and we appreciate these efforts as they seek to improve cooperation between the two countries.

F.Y: It can be noticed that the private sector does not have any real partnership with the government. Is it going to have one soon, especially since Yemen is in great need of such a partnership?

S.T: Generally, there must be genuine partnership between the government and private sector as the latter one can never work in opposition to the government sector. The government is the first side in charge of creating laws which provide a suitable environment for all industry and trade sectors to effectively function. The private sector should be working on providing the country with manpower, wealth and a great deal of revenue. Though there is a partnership between the two sectors, it must be rebuilt on terms of friendship and cooperation. In the Ministry of Industry and Trade, we formed the first meeting for restarting the dialogue between the ministry and the private sector. The dialogue will aim to pinpoint the problems the private sector faces.  We want to improve the private sector’s functions and have it compete with the private sector in other countries. The government is in charge of providing the private sector with needed infrastructure, trained manpower, and should be in charge of training the manpower for different fields, including trade, industry and services.

F.Y: There are some businessmen in the private sector who refuse to apply tax laws – including those concerning sales tax – even while clearly aware of the crises the reconciliation government faces. What are you going to do about this?

S.T: As for sales tax, it was applied a long time ago and was modified in 2005. It is known for being one of the simplest taxes, but wasn’t completely applied in the past. However, it is going to be fully applied as the government and country are both in need of resources to rebuild the economy. As there were some traders who did not provide their documents, the tax institution was forced to take certain measures, such as the suspension of tax numbers.