Yemen during 42 years: from deterioration to entire economic planning (1-2) [Archives:2004/777/Business & Economy]

September 30 2004

Mahyoub Al-Kamaly
Yemen is these days celebrating the 42nd anniversary of September 26 revolution of 1962 that destroyed the autocrat monarchic system in the northern part of Yemen. This revolution has paved the way for October 14 revolution in the south part of Yemen that erupted against the British colonialist rule in the following year, 1963.
This celebration comes under many economic, social, and political changes on the ground. The country had been living miserable economic conditions before the revolution and the establishment of the republican system in the two parts of Yemen.
When the revolution erupted in 1962, there was not a state of institutions or apparatuses working out development plans, the situation had changed as the state started to organise its resources and scheme development plans and programs and securing food for the citizens. Thus, the state took care of productive sectors, particularly the agricultural one.
We are in this report presenting features of the development of economic and social development Yemen has been seeing over the past 42 past years.
The starting point for planning was by establishing institutionalised structures
For the sake of making plans, the efforts, both in the northern and the southern parts, were directed towards founding structures and frames aimed at preparing general plans for executing development and services programs reviving all the production sectors.
In the southern part, the Higher Council for National Planning headed by President of the Republic was formed. The duties of the council were specified clearly in1968 in light of the overall frame of the plan and all the assigned procedures. Ministry of Trade, Economy, and Planning was established to be in the institutional, organizational, and administrative frame of the process of planning.
On the other hand, the political development at the local and regional levels in the northern part of Yemen played a role in ending the war that targeted the revolution. Then the government established the Central System of Planning in 1972 to start in founding an organizing system based on safe scientific foundations.

Availability of planning and development factors
In the beginning of 1970s, the essential constituents for requirements of planning for the economic and social development in both the parts of Yemen were as follows:
First, the political atmosphere was available and relatively stable and it found accordingly a tendency towards solving the social and economic problems based on scientific methods.
Secondly, the country leadership and its systems believed in the significance of adopting the strategy of economic planning in accordance with the political determination that sought the change and facing difficulties and challenges like poverty and unemployment.
Thirdly, the organizational and administrative systems, laws and legislation that organize the process of planning were available.
Fourthly, there was specialized cadre capable of preparing for the process of modernization on analyzed scientific bases.
Therefore, the process of planning for economic development went on depending on many interrelated plans during different periods of time in the northern and southern part as well.

Economic development in the south
Priorities of development plans in the southern part were embodied by issuing the Agricultural Reform Law in 1970 and granting the public sector the chance to lead production in the industrial and services field. That happened because the government system was following the scientific socialist Marxism that focused on the central planning.
There was a three-year plan, 1971-73, including developing the agricultural production. It was followed by two five-year plans, 1974- 85, during which a variety of organizational structures of production sectors were established.
The third five-year plan, 1986-1990 took place, stressing on increasing of the production processes and doubling the agricultural production. It also concentrated on improving the workers' conditions and launching production of food industries. A great attention was paid to producing, manufacturing and exporting fisheries.

Economic development in the northern part

The government policy in the northern part of Yemen was taking care of sponsoring many projects that belonged to the public sector. It founded the development program for making the main bases of the agricultural sector. Various studies took place under the supervision of this program; those studies were on the development projects and preparing them as the backbone of investment in the first five-year plan.
The second step, 75-1986, included the implementation of the two five-year plans, which achieved a great success for the organizational structures and made progress concerning the basic services. The third step, 87-1991, compromised implementing the third plan that mainly aimed to increase the contribution of the agricultural sector and investing the available sources to reduce the budget deficit in the balance of trade, raising farmer's income and promoting investment in this sector. Besides that, researches on veterinary services were done.
Yemen achieved a lot during this period in the fields of planning for economic and social development, forming a firm base for the infrastructure of the Yemeni economy making this development higher by what is made after the unification.
To be continued in the next issue.