The Risk Assessment Of The Investment Of The BRI In Yemen

This research explores and assesses the risks that face the Belt and Road Initiative(BRI)investments in Yemen.To achieve this aim,the study used the analytical descriptive approach and mainly depended on primary and secondary data published by the Chinese government,Yemeni government,Arab scholars,Arab media,and some other scholars working in the field.The study tries mainly to answer this question: What are the risks that face the Chinese BRI investments in Yemen? This research is has a great significance as it comes by determining the main risks that face the BRI while investing in Yemen.This is a pioneering study in the field because it focuses on a country that has an important location not only in the Gulf countries and the Middle East,but on the global level.Yemen has different characteristics which makes this study a valuable one for stakeholders in Yemen and China,and also for those interested in researching risk assessment of the BRI in developing countries.Studying the external environment of investment and knowing the strengths and weaknesses of the host country is very important for any investment as it is useful in detecting reality and identifying those difficulties and obstacles in order to take into account the indicators when implementing on the ground or to use them in drawing some alternative plans and make some decisions.It is important to study the investment climate to introduce the foreign investor to it and motivate them to invest,especially friends from China,who presented the BRI,which is one of the biggest initiatives Investment in the history of Yemen.The importance of this study stems from the fact that it represents an attempt to recognize the fact that BRI investment in Yemen will play a main driver of the economic development process,thus complementing the potential shortage of domestic capital through its ability to transfer advanced technology and expertise to Yemen and the associated potential for training national employment and acquiring production,marketing and advanced management skills,which increases employment opportunities,increases the productivity of individuals and institutions,and develops and diversify the economic and social structure,thereby improving the performance of the national economy.Since ancient times,Yemen has been an important station on the Maritime Silk Road and has particular geographical advantages in the construction of the Maritime Silk Road in the 21 st century.The BRI will bring new opportunities for YemeniChinese cooperation and development in Yemen.China is ready to increase collaboration in all fields with Yemen,share opportunities and meet challenges,and work together to build the Maritime Silk Road in the 21 st century for the growth and prosperity of the two countries.The construction of the BRI came to meet the requirements of development in China and the Arab region,and helps to form a new equation for full openness.Building a Belt with the Road is also a prominent point of Chinese diplomacy in the new era,which contributes to strengthening ties of interest and realizing the common development of China,other Asian countries and European countries.Many countries-which will be the targets of this initiative's projects-may need massive financing to develop their infrastructure.Many of the targeted countries do not have sufficient financial resources to develop their infrastructure,and may not be able to obtain alternative international financing for multiple reasons,some of which are political.The Chinese initiative has provided opportunities for countries in need to develop their infrastructure without interfering in their internal affairs.The completion of infrastructure projects will stimulate the growth of many low and middle income countries,which will support the growth of the global economy and raise the volume of global trade,as China tries to obtain a large portion of the expected increase in demand.This study aims at exploring and assessing the risks that face the investments of the(BRI)projects in Yemen.The study has four main chapters,the first chapter includes an introduction to the study that covers most vital elements in this part,it includes the background to the study,BRI in Yemen,china-Yemen relations,research questions,objectives of the study,significance of the study,literature review,previous studies of risk assessment of the BRI globally,Previous studies of risk assessment of foreign investment in Yemen,theoretical review,and the methodology of the study.Bilateral relations between Yemen and China are a successful experience in how to build comprehensive strategic relations between countries.The Yemeni leadership has succeeded through its vision and ability to develop a road map in building a long-term strategic relationship between the two countries,based on fruitful cooperation in all fields,including the economic,political,commercial,cultural and technological fields.Yemen is one of the developing countries promising to modernize and develop and achieve high growth rates and has a lot of potential for domestic and foreign investment.The chapter is concluded by focusing on the prominent studies regarding risks that face BRI projects globally and in Yemen.The second chapter presents an overview of risk assessment of the BRI globally,and regionally.The different risks include but not limited to political risks,economic risks,moral risks,legal risks,and security risks.Political risks of the BRI relies on a set of agreements that China has entered into with the governments of some countries,and the change of these governments leads to the possibility of reviewing agreements,especially in light of the doubts that sometimes arise around them.It shows that infrastructure development is an issue with several risks that must be taken into consideration before starting the implementation of the project,such as weather,geographical nature,political conditions,and the economic cost of the project,which often exceeds the specified amount because there are obstacles that make the completion of the project be implemented after the specified time period.The third chapter assesses and analyzes the risks that face the BRI investments in Yemen.The findings of the study show that the projects of the BRI in Yemen face many risks.Most of these risks are resulted due to the ongoing civil-conflict which has increased the many crises that the country had already experiencing even before the war breakout.The study explored the different risk which might include but not limited to;political and security risks that is caused by the current war and the turmoil events that the country experienced during the so-called Arab Spring Uprisings in 2011.Moreover,legal risks which may occur due to the difficulties of proof of ownership of the land and real estate and the authority taken by the influential people.Also lack of familiarity with the rules of international law,international agreements related to the movement of capital and the regulations of international federations related to commercial activities.Furthermore,Infrastructure Risks,one more noticeable risk to BRI investment in Yemen is that infrastructure such as communication networks and existing roads is not keeping pace with the volume and level of activities expected,and the rise in energy prices is a significant factor as one of the obstacles to investment.Additionally,the study shows that the BRI face economic risks because the Yemeni economy is suffering from deteriorating conditions that have worsened considerably after the security and political turmoil in the country since 2015.The major foreign oil companies operating in Yemen left the country as a result of political turmoil,as Yemen investments worth billions dollars,hundreds investment projects stopped as a result of recent events.Moreover,the BRI investment projects might face other risks that are related to social and cultural norms of the country,and because of the formation of the Yemeni society in most governorates where the state doesn't have strong influence over the people who are ruled by Tribal Sheikhs or heads.Other risks like the non-traditional risks such as terrorism,corruption and bribery,and competitiveness risks are most likely to make obstacles for the investments of the BRI in Yemen specially the rivalry of superpower countries Like USA,Russia and other Arab and European countries.The fourth chapter presents a conclusion of the main arguments of the study and a recommendation.It is included that Yemen is in dire need today to attract the BRI investment to finance development plans and create an investment climate that has all the appropriate legal,economic,political and social elements available.It is recommended that the international community as whole should work together to put an end to this devastating war in Yemen which has been destroying humans,economy and every aspect of life in the country.If this war is over,then thousands of opportunities will be available for domestic and BRI investments.The results of the current study may benefit decision makers in the two countries in making decisions that will contribute to the success of the Chinese BRI and achieve its development goals for the two countries and primarily for Yemen and may be a starting point for other more in-depth studies in the future on the same field.