The Second Yemeni Economic Conference
Sana'a  18 - 20 April, 1998

Abstract 32

This paper covers some of the peculiarities of the reform environment in Yemen, indicating that the process of reform in Yemen represent a real race with time in order to make the most of an indispensable chance to redraw the path of events and the direction of development. The process of reform in Yemen has to transcend traditional goals of the reform program in order to create a conducive environment for starting the necessary social and economic changes and to vitalize its mechanisms. Hence, the paper addresses the content of the reform option for the Yemeni society, emphasizing that the more convenient reform for the Yemeni case is the approach of change through change itself.

The paper then develops a simplified theoretical model for the phases of reform, based on an assumption of three economic sectors and only two time periods. The first period is prior to the reforms while the second is after achieving its goals. The factor of time is later inserted in order to help understand the dynamics of the reform process over its different phases. Thus, it becomes a multi-phase model although constrained by the three hypothesized sectors.

The model is further developed with great objectivity, where at the end of the model we reach a number of important relations which render the model beneficial to understand some of the important phenomena. The model has the ability to be developed further in order to discover other important relations such as the existence of specified space for movement in the field of reforms that falls between the minimum limit for effectiveness and the maximum limit for economic viability. Also, the model shows the situation of interchangeable relations between reform achievement in one sector and the performance of other sectors in the economy.

The paper also discusses what can be considered the basis for developing a dynamic model to determine an optimum band of measures- time and sectoral wise. The model should then determine the relation between the rates of “growth” and “employment” on the one hand, and the requirements of the reform process and the reform environment, on the other. Finally, the paper analyzes in some detail some selected conclusions in light of the results of the model, in addition to presenting some important conclusions and recommendations relating to the Yemeni case.