Thursday, 06 Dec 2012
Overseas Business Risk - Yemen
Information on key security and political risks which UK businesses may face when operating in Yemen.
Political and Economic
Yemen lies at the southern end of the Arabian Peninsula and shares borders with Saudi Arabia and Oman. Yemen controls the strategic straits at the Southern entrance to the Red Sea.
Political instability since January 2011 has led to a precarious security situation. Reports indicate that over 400 protestors have been killed and hundreds injured since January. While the political deadlock is ongoing, the Yemeni economy continues to deteriorate.
Yemen is the poorest country in the Middle East, but the presence of oil, gas and mineral deposits, the amount of development aid flowing into the country and the unequal distribution of wealth amongst the population mean that commercial opportunities do exist.
GDP per capita is less than $1000 per annum, reflecting a weak economy and a rapidly expanding population of over 22 million people.
A political deal is needed urgently to enable a new government to stabilise the economy. While the political deadlock is ongoing, the Yemeni economy continues to deteriorate. Since January, food costs have dramatically increased: wheat by 26%; rice by 30%; bread by 50%; cooking gas by 400%; and water by between four- and seven-fold. Coupled with fuel shortages, which have also threatened humanitarian operations, this is having a severe impact. Foreign exchange reserves have fallen, and a serious budget deficit (around 10% of GDP) has been exacerbated by a loss of revenue from the export of Yemeni’s oil, caused by frequent attacks on oil pipeline infrastructure.
Bribery and Corruption
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
Visit the Business Anti-Corruption portal which provides advice and guidance about corruption in overseas markets
The Centre for the Protection of National Infrastructure also provides protective security advice to businesses
The growth of Al Qaeda in the Arabian Peninsula (AQAP) in Southern Yemen continues to be a matter of grave concern. The threat posed by AQAP is real and current. They have demonstrated continued capability and intent to plan and execute attacks aga inst Western targets. Although AQAP leader Anwar al-Awlaki was killed in September 2011, we remain concerned about the threat they still pose to the UK, the region and other Western targets.
Protective Security Advice
The current political instability, precarious security situation and the threat of terrorism across Yemen will make it extremely difficult for anyone trying to conduct business there. Even some of the most experienced and hardened NGOs are finding it very difficult to work under the current circumstances.
More information is available on overseas business risk in a range of markets.