Aden Conference: Removing Obstacles to Investment

Prime Minister Ali Mujawar, center, seated with officials at the conference

The participants of the “Aden…Yemen’s Gate to the World” investment conference, held in Aden on 11-12 November, stressed the potential of the port city to become a major economic stronghold. But, they said, the Yemeni government must make changes to the country’s financial sector, utilities and judicial system.
Yemen Prime Minister Ali Mohammed Mujawar acknowledged the recommendations made by potential investors and affirmed the country’s willingness to implement them.  “The investment issue is a top priority for the government, which has already taken action to ensure a competitive and attractive investment environment,” Mujawar said.
Following the opening speeches at the launch of the conference, Prime Minister Mujawar opened the accompanying exhibition which included more than 50 companies from tourism, real estate, and banking companies. The exhibition displayed the overall economic activity in Yemen and presented the investment opportunities available here.
During the conference’s sessions a variety of issues were discussed, including the in-depth strategy for the development of the city of Aden by 2025, the master plan for the overall development scheme, major investment success factors, investment trends and challenges in Aden (such as political stability, piracy in the Gulf of Aden, marine safety and petrochemical industries), and investment opportunities in mineral resources like diamonds and platinum.
The conference focused on six different areas: the development strategy for Aden, the restoration of previous concepts for free zones, the actualization of the Aden Free Zone, Aden’s free zone development plan, investment opportunities, and the creation of positive international experiences through the proper management of the free zone.
More than 200 foreign businessmen, government officials and journalists attended the event and outlined the roadblocks that must be removed in order for widespread investment to flow into the country.
The establishment of a stock market, enhancement of the banking system, creation of commercial and real estate courts, and the presence of international insurance companies in Yemen were chief among the recommendations.
Yemen also must provide sufficient power and water for investment projects with suitable prices which can motivate manufacturing investment and involve the private sector in funding such projects, as can the preparation of industrial zones and the allocation of land for large-scale projects.
Still, investments are flowing into the nation. Abdulla al-Qadi, director of exploration and production at Crescent Petroleum, noted that his company signed an agreement in September to help establish Yemeni Gas City. “This project will attract investment at a cost of $20 billion during the next 25 years and provide around 80,000 jobs,” al-Qadi said.
One of the most attractive areas of investment centers around the Aden Free Zone. Dr. Abdul-Galil al-Shuaibi, chairman of the Aden Free Zone (AFZ) said the zone has attracted a number of projects. The AFZ provides incentives to investors through tax exemptions, visas for foreign labor, 100 percent ownership of the land and no customs fees.
Al-Shuaibi said the AFZ has responded to investors’ concerns about the power grid there. “We are solving this issue ourselves without returning to government’s initiatives,” he said. “We have encouraged the private sector to set up an electricity plant to produce nearly 60 megawatts.” Al-Shuaibi said the zone has received many offers from businessmen to invest in industry there.
The AFZ’s responsiveness is already paying dividends. “The cooperation and facilitation given by the AFZ encouraged us to invest again in the field of developing of heavy industries in the AFZ,” said Ahmed Bazara’a, chairman of the Yemeni Businessmen Club.
Bazara’a praised the competitive advantages for investing in AFZ saying the investment in industrial zones there is good because of the exemptions of customs fees for material raw as well as the availability of labor. Thus, he said the AFZ is a suitable place for businessmen who target the Yemeni market.
Aden’s pristine beaches and tropical climate make it an ideal place to develop into a tourist destination. Dr. Abdulrahman al-Hakami, executive manager of MMJ Company talked about his company’s vision to do just that. “We have a plan to invest $2 billion in Yemen in real estate and the tourism sector,” he said. “We have a feasibility study to establish hotels which will start work during the coming six months.”
Prime Minister Mujawar stressed the intent of the government to improve legislation surrounding investment and said that the government has adopted new legislative measures in investment law, company law, and tax and customs laws.  In addition, Mujawar stated that the government has issued other legislation intended to increase general transparency and accountability in order to strengthen investors’  confidence in the system, a move that was requested by the investors themselves.
Furthermore, Mujawar pointed to steps already taken by the government to facilitate the processing of registered investment projects, such as the launch of a single window system, the activation of commercial courts, the establishment of industrial zones, and the provision of free plots for large investments.  He added that the government has also made efforts to accelerate the formation of a stock market and to involve the private sector more in development and infrastructure projects.
In the concluding session of the two-day conference, Mujawar said the government must adopt recommendations produced by the conference, saying Yemen seeks a stronger partnership with investors because the private sector will boost Aden’s infrastructure. “This city has a lot of potential and a wealth of opportunities that make it an important economic center even regardless of its location as a link to world trade,” he said.