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Economic Growth and Development in R.O.Y
In view of the general economic level, the available indicators and data collected during 1996; relating to the production in a number of economic sectors and branches, indicate positive signs of achieving standard averages in the economic growth for most of the sectors.
This lead to an expectation of an increase of GNP by about 7% in conformity with the fixed price rates. This can be identified in various ways: -
- The agricultural production is expected to grow within a 2% ratio.
- Due to rise of crude-oil prices, the average growth rate is expected to reach round a 13% increase. - In oil-refinery sector, without considering the rise in price, it is expected to achieve an average growth rate of 11% approximately. -The production of transformation industries is expected to rise up to 10%. - As for the sector of building and constructions (Contracting) it is estimated during 1996-97 to achieve a rise ranging between 8 to 13%. -Year 1996 witnessed a decrease in the value-added charges in the electricity and drinking water. -A retreat of average growth rates during 1996 of the Government services sector. The Investment Expenditures: - These are of two angles: On relating to expenses incurred for executing the Government development projects, while the other is related to the investment in the private sector's projects. There was, during year 1996, a rise to about 90% in the financial execution of the projects related to the investment program. Fortunately, the value of external loans usable to finance current year's development projects is expected to amount 150 million dollars i.e. an equivalence of 60%the total external loans expected during the Year 1996.
Private-Sector Investment: -
It is expected a continuance of a positive -reflected direction in the private sector activities, and development of its role within all its divisions. The number of projects licensed during January -September 1996 by the Public Investment Authority were 162, involving employment of 8214 persons and costing around a value of 22,7 billion Rials. These projects have been of mainly service, touristic and industrial natures.
National Savings: -
As the national Consumption raised during year 1996 from 439 in 1995 to 553 billion Rials i.e a 26% rise, the national Savings and Deposits equally rose to 99 million Rials. This confirmed safety of the directions in distributing the resources between the various utilities. The value of fixed capital -assets have risen in the year 1996 to 136 billion Rials against 94 million Rials in 1995 i.e a 45% rise
Even with a proportional rise of crude -oil export value, preliminary indicators showed a deficit in the commercial equilibrium of foreign trade. This deficit amounted to 200 million Rials in the year 1996 for foreign trade balance!
Investment Program for Year 1997
Source: "Investment Program"
Yearly book 1997, by the Ministry of Planning and Development
Due to the fact that investment is the main motive for economic and social development, evaluation and achievable progress in the Government investment field shall, thereby, mainly be concentrated in three main issues, these are:
a) Improving criteria of evaluation and choice of the Government investments to the level appropriate to achieve the economic and social objectives contained within the First Five-Years Plan;
b) Estimating the volume of Government investment as compared to the current expenditures for objective of securing its continuous increase within the limits of the overall economic policies; and
c) Follow-up executing the Government development projects to secure its speediness, and start of its operation within its per-planned efficiency standards.
The objective, in this case, is minimization of current economic and financial irregularities and/or violations, in addition to increase of public and private sector investment, which will in -turn lead to improvement in the living standards of the people.
Though fiscal limitations imposed limits on the size of investment allocations for year 1997, the subjective necessities oblige investment in the economic and social infra-structures of the economy -viz, roads, electricity, water, and projects related to education and public health.
The table below indicates the sources of financing such investments:
Allocations Sources of Finance
Gov. Private local loans foreign
28829.4 12269.2 --- 40083.2
19873.2 5391.4 194.5 16416.6
Yemen Oil. Annual Return. Production .. Consumption
The annual Oil returns reached about 970 million dollars, while it was 650 million dollars and half year ago.
The factors that led to the increase were:
1)-International Price Increase.
2)-Cost Price decrease of the oil producing companies in Yemen.
3)-Yemeni involvement in the capital investment for some of the oil producing companies in Yemen in addition to the preservation of its shares in the original percentage that reached to 4% of the production rate.
-Yemeni labor force employment in the oil producing companies in the country.
The actual production currently is between 370-380 thousand barrels crude oil on a daily basis. It has been expected that oil production will reach daily 420 thousand barrels a day. This expectation included the Namer Oil producing company's estimate to produce 20 thousand barrels per day.
There are about 18 oil producing companies working currently in the field of exploration in the country.
Moreover, it has been contracted with five new companies. Local oil consumption was estimated with more than 70 thousand barrel per day, 65 thousand out of that came from Aden Refinery and the rest from Saffer Refinery in Mareb.
Yemeni Gas export will start by the year 2001 and the returns was expected to reach between 650-750 million dollars per annum for 25 years. The cost of Yemeni share is 24% (through Yemeni Gas Corporation). French total has 36% and 14% each for American Hunt and Exxon companies.8% for the Korean Company venture as sub-contractors. ________________________________________
Source: - Minister of Oil Statement in 31/3/1997. H.E. M.S.Al-ATTAR