There are two important facts relating to the human being since the creation of mankind. The first fact is the multiplicity and renewable man’s needs. The second is that available resources capable of satisfying those needs are relatively limited, hence causing what is termed in economics as the Economic Problem.

In an attempt to understand those economic problems and phenomenon, the economic thought tends to address the forces behind the phenomenon in order to establish laws that organize relations between those forces and the economic phenomenon.

However, the link between economic thought and economic phenomenon has been reciprocal. In some instances, economic thought is formed as a direct result of the influence of certain economic phenomenon, whereas in other cases an economic phenomenon becomes a product of the economic thought. A case in point is the Marxist economic thought which led to the emergence of socialist economies that prevailed in Eastern Europe ad in some developing countries in Asia, Africa and Latin America.

In contrast, the capitalist economic thought emerged as a natural response to the consumer’s inclination to maximize his utility as well as to the producer’s inclination to maximize profit and return on investment. Also, while the new Islamic commercial, financial, monetary and investment transactions are an outcome of the Islamic economic thought, thoughts towards economic integration have emerged as a necessity to enhance commodity exchange, capital and labor mobility, and coordination in financial, monetary and economic policies.

As a consequence of the collapse of the Soviet Union and it’s orbital countries (the socialist bloc), and the new state of a uni-polarity capitalist economic system that is reshaping the international economic relations through its well established international institutions that guide the system, once again emerged Globalization. This economic globalization is part and parcel of the globalization in all its respects: civilization, culture, political that have begun to invade the various countries of the world, and thus to become the main feature of the 21^st century.

As for Yemen, which has suffered complete isolation and autarky up to the middle of the 20^th century, nevertheless it was insulated from influence of the economic thought that prevailed during the post World War II. This influence has been reflected in the Southern part of Yemen experiencing the socialist system and the command economy, whereas the northern part was inclined towards the capitalist thought and a mixed economy.

However, the birth of the Republic of Yemen on the 22^nd of May 1990 based on reunifying both parts of Yemen, and as a consequence of the second Gulf War, the Yemeni economy witnessed a series of crises and sever economic problems emanating from structural imbalances in the economy. Those problems have been exacerbated due to internal economic and political factors characterizing the first half of the 1990s, as well as to regional and international developments which forced Yemen to undertake a comprehensive economic, financial, and administrative reform program, in light of the growing trend towards merging in the world economy or Economic Globalization.

The Government started implementing the Reform Program in order to cease the wheel from going into accelerated economic deterioration, and to rebuild the national economy on the basis of economic efficiency, competitiveness, and transparency. Hence, the financial and monetary policies took a contraction approach by reducing public and private spending, correcting price distortions and structural imbalances, and targeting economic stability as a prelude for positioning Yemen back on the track of comprehensive and sustainable development.

The features and results of the Economic Reform Program are themselves indicators of preparing the Yemeni economy towards merging in the world economy and to participate in economic globalization in the form of internationalizing investment, production ad trade. However, considering the causes that forced the adoption of the program in the first place, the initial success during the first stage, and other considerations relating to issues such as comprehensive development, social justice, and the nature of the economic and social structures in Yemen; for all those, the Reform Program requires an element of selectivity in some of its aspects such as the economic role of the state and privatizing public and mixed sector’s enterprises. Also, it is equally important to be cautious on the extent of liberalization of foreign trade in relation to future of domestic manufacturing and the requirements for establishing a strong and diversified domestic industrial base capable securing high levels of employment and output. A growing and stable economy is a guarantee for participation in the world economy on equal footing.