Author:Kiernan, Peter

If Yemen's ambitious development plans are successful the country, recognised as the poorest of the Arab states, could witness a dramatic change of future.

Yemen, the poorest of the Arab states, is currently experiencing an ambitious programme of structural adjustment and socio-economic development, initiated by the General People's Congress (GPC), the government of President Ali Abdullah Saleh. The IMF/World Bank sponsored programme reflects a serious commitment within the government to make Yemen a participant in economic globalisation, in the hope it will pull the country out of its low level of development.

However, continued political and social instability (exacerbated by some of the programme's policies) will not only prevent this from occurring, but will also threaten the fragile democratic institutions that have guided the country since unification between north and south in 1990.

Since the programme was introduced in 1995, Yemen's macroeconomic indicators have shown a reversal of the high deficits and sluggish growth that characterised its economic performance between 1990 and 1994. In those years two disastrous events setback the country's development; the expulsion of 750,000 Yemeni guestworkers from the Arab Gulf states after Yemen's decision not to support the war against Iraq, and the civil war in 1994 which cost Yemen about $7 billion or 140 per cent of its GDP at the time.

The massive task ahead of the Saleh government is reflected in the fact that Yemen is classified by UN agencies to be in the least developed nations' bracket, with per capita GNP of $380. While Yemen's population of 16 million is approximately 58 per cent of the population of the GCC states, its GDP is merely 2.5 per cent of the total GDP of the GCC. A severe problem that frustrates development is the country's poor record in the social sector. Yemen's literacy rate (41 per cent) and life expectancy (54 years) are both significantly lower than the average for all the Arab states, as are its enrolment rates in school and university education.

Additionally, the country has a poor infant mortality record; 98 infants die per 1,000 live births, which is twice the average rate in the Middle East/North Africa region.

Both the World Bank and the IMF have advised the government to cut back on food and fuel subsidies on the grounds they were ineffectively targeted, and, it was believed public funds could be better utilised in other schemes, such as financing NGO...

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