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

Abstract 34

The world is witnessing a major shift in the field of foreign trade policy. Trade policies relied heavily on protectionist policies during the post World War II period. A new trend has been emerging since the 1980s towards economic liberalization, eliminating foreign trade restrictions, and merging into the world economy.

Yemen, which has been experiencing large trade imbalances vis-a-vis the external world, has not been insulated from those changes and developments. The country is undergoing major and fundamental changes in its trade policy in order to overcome current problems and difficulties. The major concern is to encourage exports that will help reduce the trade gap, and mitigate the negative impact on economic growth and development.

In fact, foreign trade does not merely reflect the economic situation of a state, but also represents an important tool of development. Moreover, foreign trade enhances international competitiveness and efficiency and may increase growth rates.

Therefore, this paper aims at studying Yemen’s foreign trade through identifying the current situation as well as the problems and obstacles facing the economy. On another account, focus is directed towards the new policies adopted by the Government within the Reform Program and their anticipated impact on foreign trade. The paper concludes by presenting a set of recommendations that would support and enhance the role of foreign trade in the process of growth and development in Yemen.