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WB, IMF policies led to riots in Yemen

July 22, 2005

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SANA,A: The Yemeni government recently lifted subsidies on all oil products which led to a 100 per cent rise in the price of oil, a 200 per cent increase in diesel price and a 50 per cent increase in the price of gas. The overnight hike in fuel price was more than any poor person could have imagined in this impoverished country. The decision followed sustained pressure from the World Bank and the International Monetary Fund (IMF) on the Yemeni government to cut subsidies and introduce sales tax, with the aim of limiting government spending.

The decision was immediately followed by spontaneous demonstrations and clashes between security forces and the people in Taiz, Dhamar, Mahweet, Al-Jawf, Marib, Dalee and Ibb cities, which left at least 13 people dead and many more injured.

Not many in Yemen, located on the southwestern tip of the Arabian Peninsula, knew of the estimated $300 billion a year that Western countries pay just to their farmers, and the billions of dollars in subsidies to businesses one way or the other. The IMF has not prevailed on Western governments to lift subsidies, but it was successful in twisting the arm of the Yemeni government. The price hikes announced are set to hit the poor particularly hard. The cost of essential transportation and of commodities dependent on transport is expected to rise dramatically.

“Government should resign,” demonstrators shouted on the streets of Sana’a. “Curse upon the government,” they said. And “No to more oppression and poverty.” In Sana’a demonstrators gathered outside the presidential palace and then marched down the main streets, attacking government and private institutions. Several offices either did not open on Wednesday or had to close early. Demonstrators stoned police who tried to scatter them with tear-gas. They hurled stones at the offices of the ministers’ council and at the house of vice-president Abdu Rabu Mansour.

Offices of the ruling People’s General Congress party were ransacked and destroyed in several governorates. A branch of the Al-Rafidain Bank was burnt in Sana’a, and demonstrators then tried to burn the building of the Yemeni Central Bank. Black smoke was visible all over Sana’a on Wednesday. In Marib, 120km north of Sana’a, 11 oil and gas tankers were stopped from entering the town. Owners of oil and gas stations declared strike all over Yemen. The government had announced early this year that it needs to lift subsidies on oil products in order to support reforms and to cut the budget deficit. It said a price hike was a global requirement. It declared it will not effect any price increase, but then chose to do so overnight.

Hamid al-Ahmar, member of parliament from the Islamic party Islah, said the decision to increase prices was “mentally paralysed” and “not rational.” Prime Minister Abdul-Qader Ba-Jamaal appeared on national television to say that people had been too impatient in protesting against steps they do not understand. “If people had waited for one or two weeks, they would have seen the positive side of the decision,” he said. “There were corrupt elements who encouraged people to go for such destructive demonstrations,” he added.

The opposition parties condemned the destruction but blamed the government. “The government has ignored calls for more extensive study of the economic reforms strategy,” they said.—Dawn/IPS News Service