Bankruptcy portends death for companies in areas controlled by Iran
English - Wednesday 14 December 2022 الساعة 02:11 pm
Sana'a, NewsYemen:
Start-up companies are absent, and they are exclusive to the leadership of the Houthi militia, whose commercial activities have replaced traditional companies in various sectors, driven by harassment, levies, and prolonged economic stagnation.
A source in the Chamber of Commerce and Industry in the capital Sana'a said that the majority of companies have not made profits for years, and are struggling to survive, in light of an illegal tax and tax system, and an investment environment that expels capital.
Private sector institutions and companies are subjected to harassment and extortion by the Houthi militia, which prompted them to reduce their activities, as businessmen complain of losing profits in exchange for increased levies and economic stagnation.
The source, who asked not to be named, confirmed to "Newsyemen" that many companies have liquidated their businesses without declaring bankruptcy, and some of them are suffering under the burden of debts and dues to others.
He explained that many companies in various sectors have transferred their investments abroad during the past two years, reduced their business inside the country, and are working in a nominal way to preserve their name only, especially after the Houthi militia banned dealing in the currency of the new edition and the exchange rate discrepancy between Sanaa and Aden.
The source pointed out that the local market and commercial activity is suffering from a major recession, in light of the continued ban on the local currency from the new edition, and the weak demand for goods and services.
Economists assert that the Houthi militia's ban on dealing in the currency of the new edition caused great damage to the economy, negatively affecting local trade and the prices of food, fuel and other commodities, and undermining any sense of the country's economic unity.
Merchants estimate that the demand for goods and services in Sana'a and the governorates under the control of the Houthi militia has declined by 70 percent, especially building materials, household appliances and luxuries, due to high prices, lack of income and the exchange rate difference.
The war sparked by the Houthi militia has caused material damage to businesses and public infrastructure, insecurity, fuel shortages and power outages, and a sharp drop in economic productivity.
Reports and economic studies confirm that the Houthi militia's tax practices, and its destructive policies for the business environment, have pushed hundreds of commercial and service establishments and small industries to bankruptcy and liquidate their businesses, causing a weakening of the economy and the loss of job opportunities for thousands of workers in these establishments.
