As the unrest accompanying protests calling for the ouster of Yemeni President Ali Abdullah Saleh continues, the country’s construction sector has ground to a halt with more than one million workers out of jobs.
The construction sector in Yemen is currently going through unprecedented stagnation with investors and businessmen either suspending already-started real estate project or refraining from starting new ones until calm is restored in the country that has been swept with anti-regime demonstrations, according to Yemeni financial sources.
Investors are worried of further escalations that might have a crippling impact on the economy, especially that there are no clear signs of where the situation is heading, said construction expert Abdul Aziz al-Osta.
“The construction sector is one of the most vital in Yemen and a huge amount of workers depend on it for a living. That is why it is of extreme importance to the economy,” he said.
While big construction projects like villas and buildings have completely stopped, only the construction of small houses or annexes to already-built houses is still on, said a construction material dealer.
“The demand on basic construction material has dropped by 50% and this is an absolute disaster,” he said.
According to financial reporter Ahmed al-Tayyar, it is “dollarization” that mainly caused this fall in the construction sector.
“Feeling that the situation is unstable, contractors and investors converted their money from riyals to dollars and stopped their activities. Now that things are escalating, they can’t sell these dollars so they can’t resume work even if they choose to.”
Based on reports issued by the Yemeni Ministry of Planning and International Cooperation, the construction sector had witnessed in 2009 a remarkable growth that reached 31% and the revenue of this sector amounted to 275 billion riyals (1.4 million U.S. dollars). With this boom, the Yemeni construction sector managed to contribute 5.6% of local production last year.
(Translated from Arabic by Sonia Farid).