Yemen during 42 years:from deterioration to entire economic planning (2-2) [Archives:2004/778/Business & Economy]

October 4 2004

By Mahyoub al-Kamali
Yemen Times Staff
[email protected]

The strategy of planning wasn't given up, but the government started to foresee future horizons especially after noting that economic reforms showed positive indications of developing human resources.
The population reached 18.3 million in 2000; the average life expectancy is 60.5 years; the health coverage of population is 50%; then fatality average is 9.8% out of a thousand births, the rate of water coverage is 40% and that of electricity is 30%. Government spending on education and training is 22% of its budget. The rate of adult illiteracy is 55.7% and the average of the elementary education is 61.4%.
These figures signify to what extent planning to develop human resources has become the main policy of the economic system after unification in 1990. This process went in two directions: the first is in designing the economic reform program in 1995. The second direction was the preparation and the execution of the five-year plan during 1996 and 2000.
Following what is stated in the Yemeni constitution that Yemen should adopt the strategy of planning to organize its economy and exploit its resources in all fields, the government started to set the overall framework of the first five-year plan including three important aspects:
The first aspect is working on achieving actual results in economic growth.
The second one is rectifying the economic and financial defects.
The third is benefiting from human resources as well as economical ones that are available.
The plan has aimed at achieving the aims of the economic, financial and administrative reform since March 1995 and of these goals are:
– Getting rid of the public budget deficit that reached 14.9% of the gross domestic product in 1994.
– Decreasing the financial overflow that exceeded 49% in the same year.
– Lightening the burden of the external indebtedness and decreasing the defect in the budget of payments that was 13% of local gross in that year.
This tendency towards planning helps in improving the national economy, the most important indications of which are the achievement of real growth in the local gross at an annual rate of 5.5%, decreasing the deficit to 7.1% of the local gross, and reducing the overflow average to less than 5% in 2000. The debt was decreased by 18.9% of the GDP besides lowering the debt by 55%. During a decade of planning for development after unification, Yemen has achieved many goals in the fields of agricultural and industrial development, and improving infrastructure such as building roads, electricity, telecommunications, water, etc.

The second five-year plan towards anticipating the future
The second five-year plan in Yemen, between 2001-2005, is distinguished by the governments efforts to make the framework of a strategy to alleviate poverty, which is considered the core of all strategies and aims. The general aim of the plan focuses on founding economic reform, alleviating poverty, creating job opportunities and ensuring social and economic stability.
The plan included the strategies for Yemen until 2025 and millennium development goals and some local and international obligations.
The plan expected that the national economy would grow until the end of 2005 by an average of 4.7%. It reported that its priorities are: implementing the policies of economic, financial and administrative reform and increasing the personal share of the local gross from YR 51,558 to YR 53,973 by the end of the plan, which would help to reduce poverty to 35.9%.
The policy concentrated on improving the government's income, especially the non-oil income, based on better exploitation of the resources and improving the system of taxation; and creating suitable procedures for the private sector, in the effective investment in development programs and offering some services.
In this respect, the expenses of the strategic programs of alleviating poverty were estimated to be nearly 413.4 billion Yemeni rials during 2003 and 2005.

Typical transfer of planning
If the second five-year plan was the first stage Yemen's strategic view until 2025, this view reflects the planning for economic development for the foreseeable future. Those suggestions were decided by all the appropriate public officials and partisan sectors in all provinces and free zones. The plan included some other aims such as:
– Improving the costal areas and industries
– Encouraging agricultural activity.
– Investing in fishery wealth and developing the tourist sector
– Increasing production and exports
– Reinforcing science and technology
– Enlarging public participation in politics and taking care of cultural heritage
– Achieving economical stability and reinforcing partnership with the private sector.
– Supporting the role of the local authorities and achieving the aims of development until 2015.

Anticipating future
According to Yemen's strategic outlook, planning is continuing. The third five-year plan, 2006 -2010, which is considered the third stage of the general strategy is being prepared now and the government is intending to integrate this plan within the strategy of alleviating poverty.