x Abu Dhabi, UAETuesday 25 July 2017

Saudi can play a role in building a stronger Yemen

The expulsion from Saudi Arabia of hundreds of thousands of Yemeni workers does not bode well for Yemen, economically or politically.

Saudi Arabia deported about 20,000 Yemenis in just a few weeks before suspending on Saturday the expulsion of all expatriates who lack the proper up-to-date paperwork. Now foreigners have three months to get their papers in order.

After that, up to 300,000 Yemenis, plus an unknown number of Indians, Pakistanis and others, face deportation. The Yemeni and Indian governments have expressed concern.

The official about-face came amid employer complaints about sudden labour shortages. Between deportations and workers going into hiding, staffing at the port of Jeddah, for example, reportedly fell by 80 per cent.

The clumsy haste of implementation is unfortunate, but the Saudi action supports a legitimate national goal - cutting the jobless rate, officially 12.2 per cent but believed to be much higher among young people. The deportation plan dovetails with other Saudisation efforts, a series of measures that have been given steadily greater emphasis recently.

However, the kingdom also has an important national interest in managing relations with Yemen, its neighbour along a border that runs for 1,800km. Remittances from Yemenis in Saudi Arabia - totalling about $2 billion (Dh7.3bn) last year - are a vital source of income for Yemen, whose 25 million people are the poorest in the Mena region and among the poorest in the world.

Yemen's tangled politics and lack of unity contribute directly to that poverty. Unfortunately, the region has not always promoted policies that will improve Yemen's standing. Saudi can lead the way in changing this.

A strong, unified Yemen will only emerge when its economy is mature enough to attract long-term outside investment. Though Yemen's political stability has improved since its former strongmen, Ali Abdullah Saleh, stepped down last year, and its economy has shown signs of a rebound, foreign funds are still desperately needed.

At present, Saudi subsidies, paid directly to tribal and factional leaders, are estimated at up to $4 billion annually - double the amount of remittances, and so a source of considerable influence. What Yemen needs more than handouts, however, are investments in sectors such as manufacturing and energy that will create jobs, and foster stability. Saudi's industries could play a major role in that investment.

The expulsion from Saudi Arabia of hundreds of thousands of Yemeni workers, most of whom will be hard-pressed to find jobs at home, could hurt Yemen, economically or politically. The Saudis, then, must find a way to reconcile two competing national interests: improving the domestic job situation and keeping Yemen from tipping any further towards unmanaged chaos, or division.