Economic Trends


Yemen is in the process of accession to the WTO which need technical assistance to meet the organization’s requirements, especially IPR conditions, technical and health aspects, plant health and issues related to trade, customs tariffs, standardization, local development, poverty reduction, and decentralization.

Major investment projects are:

The Privatization Program: This program seeks to reinforce the role of the government in the management of the market-based economy by reducing government expenditures on public economic enterprises and enhancing their efficiency on a competitive basis, in addition to encouraging private sector investment and the realization of broader participation in ownership through public subscriptions. The program seeks to accelerate privatization, starting with the preparation of 61 economic units after their evaluation and assessment by specialized and neutral offices. The program includes units from the various economic sectors, including a number of large units expected to be an important step for revitalizing the private sector.

The Free Zone: Supports the role of the Free Zone in Aden and improvement of the competitive capacity of the zone regionally and internationally by developing its management and training its employees to deal with the conditions and properties of the zone, in addition to completion of the infrastructure projects and the utility services for the zone.

Port Cities Development: Enhances the competitive edge of port cities, starting with Aden, Hodeidah and Mukalla by rehabilitating and improving their basic services. It supports the administrative and technical capabilities of the local authorities, keeping them at least in parallel with the systems found in the ports of neighboring states while supporting partnerships between the local authorities and the private sector and facilitating procedures and processing.

Improving the Investment Climate: Undertakes regulatory and institutional reforms for investment and promotion of exports by improving the performance of the General Investment Authority (GIA) and the Higher Council for Exports and its technical organs. The Investment Law stimulates the extractive industry and encourages the private sector to set up industrial zones.

Gas Pipelines and Power Generation: Constructs pipelines to transport gas extracted from the Marib-Shabwah fields to the regions of Aden, Al-Hodeidah and Hadramout for local use. Specifically, seeks to build gas-powered stations and to link to the establishment of industrial estates in those three regions.

To view the Investment Law, please double click on the General Investment Authority’s website: http://www.giay.org/GIA/index.php.

Principal Growth Sectors: Since the discovery of oil in commercial quantities in the Marib Governorate in 1984, the petroleum industry has led Yemen's economic growth. Yemen's oil production currently stands at 400,000 barrels per day. According to the Central Bank of Yemen, oil revenues of 2006 totaled USD 5.5 billion, compared to USD 3.1 billion in 2005, an increase of 44%. According to the CBY, oil production was only 450, 000 per day in 2007. On August 30, 2005, the Petroleum Exploration and Production Authority (PEPA) invited international oil companies to bid for the exploration and production opportunities on 14 open oil blocks in Yemen.

A long-term prospect for the petroleum industry in Yemen is a proposed liquefied natural gas project (YLNG). Yemen has over 17 trillion cubic feet of proven associated and natural gas reserves. The YLNG project calls for construction of two liquefaction trains with total capacity of 6.7 million mt/y (315.4 billion cu ft/y). The project envisions a USD 20 billion investment over 20-25 years, with two trains of 3.1 million tons producing approximately 6.2 million tons of LNG annually. The facility is located at Belhaf, on the Gulf of Aden, and is connected to the Marib fields by a 320 km pipeline. A Bechtel-Technip joint venture conducted a preliminary engineering study.

In 2005, YLNG signed two agreements for the sale of 2.5 million mt/y to Tractebel and two million mt/y to Total Gas and Power. Liquefied natural gas from both proposed deals should be shipped to the United States beginning in 2009.

In transportation, the government established a Free Zone in Aden and contracted private companies to develop a modern container port, airport facilities, and an industrial estate. The Yemeni government is planning to extend the port to a width of 2 KM. That extension will raise the container capacity of the port to 3 million in two years. The seaport is 18 meters deep, which facilitates the navigation of large ships into the port area. Half of the world's annual container trade and a large number of oil shipments pass within four nautical miles of Aden.

For more information about the Aden Free Zone, please go to: http://www.adenfreezone.com/