The Turkish OIZ Model for Yemen, Which Faces a Tough Investment Climate An organized industrial zone with a favorable environment for investors will be established in Yemen, which despite being important for the Middle East and Africa market presents an investment environment with a variety of difficulties.
YEMEN - TEPAV Director Prof. Dr. Güven Sak stated that the economic cooperation between Turkey and Yemen will be solidified through an organized industrial zone (OIZ) project to be launched in Yemen in order to improve the investment climate.
Sak delivered a presentation on the role for Turkey in the economic development of Yemen at the Turkish-Yemeni Business Forum held on January 11, during President Abdullah Gül's visit to the country. Stressing that trade between Turkey and Yemen has increased dramatically in the recent period Sak said,"the main problem is Yemen's trade deficit. We have to improve the export capacity of Yemen." Addressing the main challenges for Yemen's economy, Sak declared that the legal and regulatory framework, infrastructural weaknesses and lack of skills compatible with industry's needs are the fundamental problem areas. He added that the investment climate suffered from many other issues including taxes, energy infrastructure and source of credit or loans. He maintained that to solve the above problems, they were working on a project to establish an OIZ with a conductive investment climate in the city of Hodeidah.
TEPAV Director Güven Sak stated that the Union of Chambers and Commodity Exchanges of Turkey (TOBB) and the Islamic Development Bank (IDB) were strategic project partners and that the OSTIM organized industrial zone in Ankara was expected to contribute to the process as an experienced developer. He said that Hodeidah had been selected for its logistic purposes, for its potential to serve both the domestic market and the Middle Eastern and East African countries and emphasized that the security situation in the region is much better than in other regions. He added that in the context of the project, legal framework and capacity development activities as well as trainings would be carried out.
First project by the TOBB-IDB partnership
The Hodeidah Industrial Zone project was founded upon a cooperation agreement signed between TOBB and IDB during President Abdullah Gül's visit to Saudi Arabia in 2009. In this context, TOBB shares with IDB member countries its experience in the field of OIZ's through capacity development programs and concrete OIZ development projects. The Hodeidah Industrial Zone is a pilot project to be launched in this scope.
TOBB President M. Rifat Hisarcıklıoğlu also delivered a speech at the Turkish-Yemeni Business Forum. He stated that with the project they want to contribute to the industrialization attempts of Yemen via sharing Turkey's experience in industrial zones. He said, "This organized industrial zone will make large contributions to the industrialization of Yemen and to the generation of employment." Underlying that, improvement in the investment climate of Yemen will attract Turkish business people. He added, "Yemen is an attraction for Turkey because of its geographical location and proximity to the strategic target markets of East Africa."
Hisarcıklıoğlu stated that although it had quintupled over the last decade and reached an annual volume of $200 million, the trade between Yemen and Turkey stood below the desired level. He added that to improve the trade volume, visa requirements between the two countries must be abolished and work permit procedures must be loosened. He listed the potential areas of cooperation as energy, infrastructure projects, tourism, food security, advanced agricultural techniques, water yield, and the production of tropic fruits and the marketing of these products in the global markets.
The Business Forum continued with President Abdullah Gül's speech. After the Forum, the parties signed the agreement on the bilateral abolition of visa requirements and agreements on economic and trade affairs.
