Sanaa
Challenges facing local businesses

A 2005 survey of 488 Yemeni firms by the Mitsubishi Research Institute included a subset of 175 firms in Sanaa. They reported similar challenges in doing business with firms throughout the country. In particular, corruption is a problem in their dealings with the government, and hefty bribes are often a necessity. Certain businesses can use their connections to dodge taxes and regulations, which puts other businesses at a disadvantage because they have to abide by the rules. Long delays for customs clearances, especially for imports, are ubiquitous, and over 70% of the surveyed firms reported that they had made extra-legal payments to customs officials. Financial constraints also confront many entrepreneurs in Sanaa: the cost of bank credit is also prohibitively high, and loan guarantees often comes with heavy demands that are difficult to meet. Shortcomings in municipal infrastructure are another problem: for example, because access to electricity is unreliable, many firms have to install their own backup generators.
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