Trade Minister Announces Yemen Unrest Costs

Three months of protests against the government of President Ali Abdullah Saleh have cost Yemen US$4 billion and a growing budget deficit threatens to destroy the country, Minister of Industry and Trade Hisham Sharaf said.

The budget gap for 2011 was projected at 4 percent of gross domestic product, or US$1.7 billion, earlier this year, Sharaf said today in an interview. It’s now expected to reach 6.5 percent of GDP, or US$3 billion, he said, because of the effects of the unrest and increased spending under a welfare package that was introduced in February to ease economic hardships in the Arab world’s poorest nation.

“We are talking about a deficit that will break the country,” Sharaf said at his home in Sana’a, the Yemeni capital. “This is our worst problem because it will affect other indicators, inflation, unemployment and the value of the currency. We are barely surviving, but we have not collapsed and will not collapse.”

The anti-government movement that began with small demonstrations in January and swelled into massive protests beginning on 11 February has rocked the country. The protesters want Saleh, who has been in power since 1978, to step down. Output per capita won’t expand this year as growth of 3% matches the increase in the population, Sharaf said. Before the demonstrations began, Yemen’s economy was forecast to grow 4.5%, he said. - Bloomberg