− Yemen plans to launch a two-year multibillion dollar investment program in agriculture and tourism from 2008-2010
− Plans for investment come amidst high external debt and increased terror threats to tourists in the country
− As threats against Westerners and Western economic interests continue to increase, it is likely Yemen’s tourism investments will become an attractive target for terrorist attacks in the mid to long term
Recently, the Yemeni Ministry of Planning and International Cooperation announced plans to launch a 13.7 billion US dollar program for investment in agriculture and tourism from 2008 to the year 2010. According to the Ministry, the government would undertake 43 percent of the total program’s cost, leaving the remaining 57 percent to neighboring Gulf countries and other foreign donors. Although Yemen’s external debt swelled to 5.8 billion US dollars by the end of 2007, it has not deterred the government from expanding investment projects in the country. Likewise, increased terrorist threats in recent months have not discouraged investors from undertaking more “targetable” investment projects in Yemen. As plans to expand Yemen’s tourism sector continue to develop, both terrorism threats and external debts will continue to rise in the mid to long-term.
Foreign Investment Projects Increase
The number of Gulf region and foreign firms investing in Yemen has risen in 2007 to approximately 232 companies, compared to a mere 184 in the previous year. Corporate firm investments alone increased by 26 percent, making investment projections for 2008 very promising. In fact, the Qatari Diar Real Estate Investment Company and the Yemen General Investment Authority – two well established and profitable investment firms – have signed a memorandum of understanding to develop the 500 million US dollar “Al Rayyan Hills” project, which will be launched on April 1, 2008.
The project will include a five-star hotel, luxury residential villas and apartments, in addition to retail space and office buildings. The developers’ goal is to create a major tourist destination, aimed at sophisticated investors and tourists around the world. However, if Yemen’s investment projects are as prosperous as promised, the Gulf country may be facing a fresh wave of terror threats following the completion of its development plans.
Terrorism Threats to Follow Tourist Developments
In January 2008, al-Qaeda in Yemen (AQY) released an E-magazine, Echoes of War, featuring a journal entry threatening to attack Westerners and Western economic interests within Yemen (Previous Report). Five days after it was released, AQY carried out an attack against Belgian tourists, killing two and wounding four others . Similarly, in July 2007, a group of Spanish tourists were the target of an AQY operation, killing nine people, including seven tourists, and wounding nine others .
The al-Qaeda network has targeted Westerners and Western economic interests with success in recent months in Yemen. Due to the rise in threats against tourists in the region, as a whole, tourism continues to decline in Yemen. To this end, although building a five-star tourist resort and city may be attractive to foreigners at first, its location in the Gulf country will likely deter its prospects for becoming a popular vacation spot. Investing in Yemen’s tourism sector may prove risky at best, given the ongoing threat of terrorist attacks against Westerners and Western economic interests. As tourism increases in Yemen, so too will the level of terrorist threats and potential attacks in the mid to long-term.