Yemen's economy is expected to collapse within two years in case the inflation and job rates continue to increase amid a sharp decline in oil production whose revenues bring in about two thirds of the country's income, a Gulf official has warned.
Abdul Aziz al Owaishiq, Director of the Economic Integration Department at the Gulf Cooperation Council, was quoted by Al-Hayat Newspaper as saying in a lecture in Saudi capital Riyadh on Tuesday that the GCC and donor annual aid to Yemen, about $ 1.2 billion, is now frozen because of the 'administrative inefficiency and weaknesses'.
The Central Bank of Yemen is continuing to pump between $ 50 to 60 million a month to stabilize the Yemeni riyal, and the growth rate said to be 6 per cent is just 'nominal' because the country's inflation rate is weakening it, he added.
The London-based newspaper also cited Al-Owaishiq as saying "there is not a specific time for Yemen's accession into the GCC, but this could happen after the country meets all requirements of economic and organizational reforms".
"Also, there is a problem represented by issuing more than one ID for a Yemeni citizen, and this is because of the lack of ID registration centralization. A Yemeni can get many IDs, one ID in every Yemeni city".
The GCC discussed this issue with Yemen, especially after Gulf authorities had found out that Yemeni workers deported because of security problems come back to Gulf states holding new names, he said, pointing out that the GCC, in response to this problem, decided to build a center to issue IDs for Yemenis, with the UAE giving $ 126 million in aid to build it.
He also said that though Gulf countries are keen to provide financial and technical assistance to set up strategic projects in Yemen, companies refuse to build projects, such as a power station for which Gulf countries provided $ 480 million and prepared plans and tenders. "The security situation is the key reason for such refusal".
Furthermore, international organizations have protested against building the $ 2-billion Al-Saleh medical city which Qatar pledged to set up, saying Yemen needs clinics and first care, not such a large city, he said, as he affirmed that the GCC has already raised the aid to Yemen by $ 60 per capita.
"Yemen's oil production has fallen sharply in the last five years, reaching 109000 barrels a day in 2009. This decline is continuing because there are no new oil discoveries".
"There are also reliable statistics that Yemen has huge gas reserves, but the country does not explore these reserves to compensate for oil decline," said al Owaishiq.
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