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DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION T AND T rEPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

Not For Public Use

Report No. 189a-YDR

CURRENT ECONOMIC POSITION

AND

PROSPECTS

OF

THE PEOPLE'S DEMOCRATIC REPUBLIC

OF YEMEN

November 7, 1973

Europe, Middle East and North Africa RegionCniintrv Prnarn'm Depna1rtment- I

I This report was prepared for official use only by the Bank Group. It may not be published, quotedor cited without Bank Group authorization. The Bank Group does not accept responsibility for theaccuracy or completeness of the report.

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rIn OTn KTnV Vt %TTTXTA T M'lKT NTS

Currency Unit: Yemen dinar (YD)

1 YD = 1,000 fils

CurrencyEquivalents: Before February 13, 1973

YD 1 = .26

US$ 1 = YD 0. 3831

Since February 13, 1973

YD1 = u$2. 90

.us$ 1 = YD 0.344h8

TABLE OF CONTENTS

Page No.

BASIC DATA

MAP

SUMMARY AND CONCLUSIONS ..........................

I. RECENT ECONOMIC TRENDS ........................... 1

II. THE SECTORS ....... 2

Agriculture . . . .................. ... 2r.sbheries .......................................... 6Industry ......... 9Public Utilities (Electric Power and Water).. 11Transport and Communications ............ .... 12

Road Transport . ................- 13Air Transport ................ , 14The Port of Aden ...... ................. 15

III. POPuLATION AND EMPLOuY1ENT ..... ................... 16

Education and Manpower Training ............ . 17

!V. DEVELOPMENT PLANNING ................. .. .......... 19

V. PUBLIC FINANCE AND MONETARY DEVELOPMENT ........ .. 21

Government Revenue ............... ........... 21Government Expenditure ..................... 22The Nationalized Sector .......... .. ......... 23Monetary and Banking Development ............ 23Recent Monetary Developments ........ ........ 24Prices ................... 25

VI. EXTERNAL TRANSACTIONS ........... .. 25

Exports ..................................... 25Imports ....... ., . . . 26

Direction of Trade ......................... 26Balance of Payments ...... ................... 27Foreign Reserves . ................ 27External Assistance ...... ................... 28

VII. PROSPECTS FOR ECONOMIC DEVELOPMENT .... ........... 28

STATISTICAL APPENDIX

This report is UbaseU on the fin.dings ofL an econom,,c mission

which visited PDRY in November 1972, and on information subsequentlyreceived. The mission consisted of Mtessrs. narold Larsen, WolfgangWipplinger and Mehdi Ali.

of 2 pages

COUNTRY DATA - PEOPLEIS DEMOCRATIC REPUBLIC OF YEMEN

AREA 2 POPULATION DENSITY

290,000 km 1.5 million (mid-1971 estimate) 5 per km2Rate of Growth: 2.7-3 percent per annum 730 per km

2of arable land

POPULATION CHARACTERISTICS HEALTH (197l)Crude Birth Rate (per 1,000) Population per physician about 13,000Crude Death Rate (per 1,000) Population per hospital bed about 800Infant Mortality (per 1.000 live births)

INCOME DISTRIBUTION DISTRIBUTION OF LAND OWNERSHIP% of national income, higst q .quinied by top 1

lowest quintile .* % owned by smallest 10% of owners ..

ACCESS TO PIPED WATER ACCESS TO ELECTRICITY% of population - urban .% of population - urban

- rural - rural ,.

NUTRITION EDUCATION (197W72)Calorie intake as 7. of requirements Adult literacy rate % 10-20Per capita protein intake Primary school enrollment % 67

GNP PER CAPITA in 1971 Less than US $100

GROSS NATIONAL PRODUCT IN 1971 ANNUAL RATE OF GROWTH

US $Mln. % 1968-71 1971

GNP at Market PricesGross Domestic Investment

Gross National Saving

Current Account BalanceExports of Goods, NFS(net)

Retained Imports

OUTPUT, LABOR FORCE ANDPRODUCTIVITY IN 1971

Value Added Labor Force- V. A. Per WorkerUS $Mln. % Mln. % US $ %

Agriculture ..

Industry.........

Services .. ..

UnallocatedTotal/Average .. 100.0 =0 t o. 109.0

GOVERNMENT FINANCEGeneral Government Central Government

( MYD lnil-lI % of GDP ( Y Min.j i of GDP1971/72 1971/72 1971/72 1971/72

Current Receipts 15.99 27.6Current Expenditure 20.21 34-8Current Surplus i72Capital Expenditures 0.52 0.9External Assistance (net) 0.44 0.8

1/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consistsmainly of unemployed workers seeking their first job.

not available.not appliable

of 2 pages

COUNTRY DATA - PEOPLE'S DEMOGRATIC REPUBLIC OF YEMEN

June JuneMONEY, CREDIT and PRICES 1965 1969 1970 1971 1971 1972

(Million YD outstanding end period)

Money and Quasi Money 35.55 33.29 38.1h 39.92 LO.L2 h1.65Bank Credit to Public Sector (net) -2.59 -0.79 2.35 5.30 5.05 6.46Bank Credit to Private Sector 10.26 9.48 10.16 9.90 9.29 12.04

(Percentages or Index Numbers)

Money and Quasi Money as 7 of GDP . . .

General Price Index .. O. .. .. ..Annual percentage changes in:,/

Consumer Price Index (1969=100)Th +5.o +5,3 ..

Bank credit to Public Sector .. . . +125.5 * +27.9Bank credit to Private Sector -7.7 7+72 2.6 .(I

BAU_AVCE OF P.-YMENTS MERCHNDISE EXPOTS (AVRAGE i 9 -73/

1969 1970 1971 US $ Mln 7(Millions US $) Raw Cotton 4.o h&5

Exports of Goods, NFS (net) 42 53 X Dried Fish 1.1 12.8Retained Imports I2 22 81 Hides and Skins 1.0 11.6Resource Gap (deficit = -) -37 37 , Others 205 29.1

Total IndigenousInterest Payments (net) -22 -22 - 5 Exports 8.6 100.0Workers' Remittances 53 52 44OtLher Factor PaymLents (net) we t *e TotalNet Transfers 1 0 1 EXTERNAL DEBT, September 30, 1972Balance on Current Account T -10

US M MlnDirect Foreign InvestmentNet MLT Borrowing I 7 16 2 Allocated 52

Disbursements (,,) (.) ( ) Disbursed 24Amortization ( ) (L) ( ) Unallocated from:Frame Agreements 100Subtotal .. .. ..

Capital Grants .. .. O. DEBT SERVICE RATIO for 1972Other Capital (net) .. ., .. 7Other items n.e.i -4 -5 +8Increase in Reserves (±) -1 +3 0 Public Debt, incl. guaranteed 5.4

Non-Guaranteed Priv-te nebt =Gross Reserves (end year) O. ,, Total outstanding & DisbursedNet Reserves (end year) 56.o 59.3 59.2

RATE OF EXCHANGE IDA LENDING. ay 31. 1973 (Million UJS nl:

From Dec. 11- Feb. 19 Throu,gh LDecember 17n ILAUs > l.Uu = YO u.joj US $1.00 = YD O.416iYD) i.u = US $ 2.61 1 YD = US $2.40 Outstanding & Disbursed .71

Since - February 1973 UndisbursedF_4-

us $ 1. = rou003LL8 &.uu.u i oy.YD 1.00 = US $ 2.90

1/ Ratio of Debt Service to Exports of Goods and Non-Factor Services in 1971.2/ Aden only3/ Data for 1971 are preliminary. Merchandise exports are custom's figures.

h/ Offinial capital on1y* not available

. not applicable

EMENA Region

T< U R K E Y 7 6°4-°5' 2

CY Pi,5 8 .e_ I R A N

ISRAL,.t

EGYIiTt '''tL PEC)PLE'S DEMOCR)5XIC REPUBlIC OF YEMEN 2<

A AS ArSA X.

- A R.>tG 1 8 I'

S U D) A N GUL , u Of' X.

I, ETH lo PI \5M LA

l _./- /_ I A , ---- \~~~~~~~~~~~~~~P

0 20 40 60 80 100,_:\

-18 ~~~~~MILES J _-\1>

0 20 -40 6p 0 aoto -.\.OM

\,k, fft.K,OMFTrFRS S ___w ShihalnO\

% S v z / / / pT~~~~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~haniud . \-

z A 23 + > 47 / ,-i 013~~~~~~~~~~~~~~~~~~~j ir Tamis

<v Y E ~~~~~~M E. N j iZomak , ,

,6. 13 $ A R A B i / ¢n gor94 A & _ (0 tydah t~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~da

E P~~~~ E. P U R! L I C . alW Qatn . -,

(1)~~~ ~~~~~ S (3ANA , Ohbvh- lhF_

A z /, \ R . ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~International boundai ies

() / gR tZ \ _.;;<~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~sayir ................. Governorcite boundories

j iihon QAlrJq \_S,5 Ash Shlhr - ~~~~~~~~~~~~~~~~~~~~~~~Primcory roads

Ct /3 - >) nlb° i - ? t - > tHAr Rlyexn = _ Roods under constructton

t~~~~~~~~~~~~~~~~~~A Muhhfro IJ~ l -r yfa oh --- --________ Proposed Rcood

-14- ~ 11IM, k a y a d °r A,< t / / s gA bA ricultur al A re cos

< Waiz t 8hoto ;); ~~~~~~~~O B n Bao9 Am Ayr , r;;I Sb /y_

8 tlJTxhurr,clig < k^~~Al Qarh _Ahwar_Ahw r+ >er5>p&g;!ON,lkbetit Ar,$$u,>is~00huqratl A zr i

_~~~~~~~~~~~~~~~~~ I - _ p,11_

SUMMARY AND CONCLUSIONS

i. The Peonle's Democratic Republic of Yemen (PDPY) became independentin 1967. Building effective Government administration in and outside Adenthen became an immediate need. With a sudden loss of expatriate administrators,this was difficult in the short term. Considerable progress has, however,been made in recent years, but difficulties remain. Goverrnmlent policies givea leading role to the public sector. Nationalization of the banking and in-surance sectors, of port services, of virtually all petroleum distribution, andof office and residential buildings, combined with the establishment of statetrading companies, brought almost all service sectors into the public sector.Agrarian reform has also been introduced.

ii. Political and social change since Independence coincided with aneconomic recession. The withdrawal of British forces in 1967 and the closureof the Suez Canal in the same year left the modern service-oriented economy inand around Aden with an approximately 30 percent smaller regional income androughly 20,000 people without employment. Total GDP dropped by perhaps 20 per-cent between 1966 and 1968, virtually stagnated during 1968-70, and probablydeclined in 1971, when the refinery reduced operations to undertake major main-tenance works. l:owever, agriculture, the subsistence mainstay for over two-thirds of PDRY's estimated population of 1.5 million, was little affected.GNP per capita was probably below $100 in 1971.

iii. In the face of these difficulties, fiscal performance has been re-markable. Budgetary policies have been conservative and effective. Revenueincreased from YD 9 million in 1968/69 to YD 16 million in 1971/72, followingnew taxes. Severe measures were taken to reduce expenditures, which droppedby approximately one-third in 1968/69 partly due to heavy salary cuts imposedon the civil service and the armed and security forces. In recent years, how-ever, the need for expansion of education, health, sociai services and govern-ment administration outside Aden has absorbed most of the rise in revenues.Nevertheless, the government has kept the budgetary deficit at the same levelfor the past three years.

iv. The stoppage of British budgetary grants and the withdrawal of theBritish troops immediately following the country's independence in 1967, putthe balance of payments under severe pressure. Although this pressure hasbeen subsequently reduced by the substantial inflow of transfers from Yemenisworking abroad, some foreign aid, stringent import control measures, and theestablishment of small import substitution industries, it is likely to persistfor some time to come.

v. With little prospect for Aden to regain its former importance as abunkering, trading and servicing center, PDRY has followed the realisticcourse of concentrating on developing her limited known natural resources inthe commodity producing sectors. Agriculture, including the fisheries sub-sector, offers promising opportunities. Improvement of existing irrigationsystems could lead to a significant increase in output, while supplementalwell irrigation would permit full crop cycles, with the introduction of newcash crops and fodder for animal husbandry. Industrial prospects appear less

promising due to the narrow domestic market and the scarcity, to date, ofindustrial raw materials. Fish processing for export may represent an im-portant exception.

vi. The current Development Plan (1971/72-1973/74) recognizes the needfor expanding the commodity-producing sector, while giving priority to manpower-absorbing projects. Of total envisaged plan investment (YD 40.3 million), 26percent has been allocated for agriculture, including fisheries, and 24 percentfor industry. No less than 32 percent of total Plan investment has been allo-cated for transport and communications to help improve the country;s politicaland economic integration. In contrast, education and other social servicesclaim only 9 percent of planned outlays. Plan implementation, which reliesheavily on foreign sources, has been slow, resulting from the lack of externaland domestic finance. Preparation of a second plan, covering the five years1974/75-1978/79, began recently.

vii. PDRY will continue to depend largely on external assistance for de-velopment. Due to the country's small resource base, its low per capita income,and the constraints on its balance of payments and budget, assistance on con-cessionary terms is appropriate.

I. RECENT ECONOMIC TRENDS

1. The Petnnle' Dfmonratic Republic of Yemen (PDDY) has scanty naturalresources and a harsh physical geography to support its roughly estimated 1.5million inhabitants. Before Tndpnendpnrp Aden ann it* n4hb--4rnar-eabenefitting from favorable conditions created by the port of Aden and Britishstrategic interests, were exceptions. With thriving trading, bunkering andservicing activities, the provision of physical infrastructure, access tomoderately deve1onpd socrial seprvic and some British supported rural devel=opments in the nearby Lahej and Abyan areas, standards of living had been inshar conntrast to those prevalling in the hinterland.

2= Uowever, conditions in the Aden are changer the

withdrawal of the British upon Independence in 1967, and the closure of theSu,ez Canal in the same year. Regional income in the predominantly service-oriented Aden area dropped by approximately 30-35 percent between 1966 and1968, leaving roughly 20,000-25,000 people without employment. Budgetar-y re-ceipts were cut by more than half, largely because British budgetary supportcame to an end. The changed economic con4 tions an econom'c elo~~ ~ ~ LL~U ±L ±UL ~Lu LOLUW UC VC LP"1teiiL5

through 1969 are described in detail in the previous economic report on PDRY(V'Thp Fconn xy of Southern Yemen") Itated 0ctober 2,' 1970.- _ - .. -.- L.j U"L U W%LLUU=L Z., 1 1U.

3. PDRY lackss adequate statistics for nationai income accounts; thusany attempt to quantify economic growth implicates a considerable margin oferror. Such indicators as are available suggest that PDRY's GDP dropped byroughly 20 percent between 1966 and 1968. The sectors most affected wereservices and construction, while the refinery, the only major industrialactivity, and agriculture, which includes a very large subsistence element,more or less maintained their levels of output.

4. Economic activities remained depressed after 1968 although above-average crops brought a temporary and minor recovery in 1969. Available in-dicators suggest that GDP at current prices virtually stagnated during 1968-70and declined in 1971, when the refinery reduced its activities to undertakemajor maintenance.

5. During 1968-71 there was a signiticant expansion of the public sector.Law No. 37, effective November 1969, nationalized all foreign banks, insurancecompanies, trading companies, port services and petroleum distribution com-panies, except for the Aviation Fuel Company "BP (Aden) Company for Bunkering"'and the BP oil refinery. In August 1972, commercial and residental buildingswere nationalized. 1/

1/ Owner-occupied dwellings, foreign companies buildings, and embassybuildings which belong to foreign countries were not nationalized.

-2-

6. Mainly as a result of the builc-up of a new administrative struc-

ture, which had to be expanded into the areas outside and distant from Aden,

the service sectors still accounted for roughly half the GDP in 1971, which

compares to the situation before Independence. In industry, activities other

than petroleum refining have been declining in importance, mainly because

construction dwindled to a negligible volume and manufacturing was adversely

affected by slack domestic demand. Agriculture maintained its role as the

mainstay for two-thirds of PDRY's population, and probably increased its

contribution to GDP. Much of the agricultural output is produced in the

subsistence sector, indicating that agriculture is still at a very early

stage of development.

II. THE SECTORS

Agriculture

7. Agriculture depends almost exclusively on irrigation, since rainfall

is scanty and irregular throughout the country, except for higher lands in the

north; there are no rivers with permanent flow. Agriculture thus relies on

surface flood waters from wadis running out of the mountains, and on underground

water. With the present supply of water, only 180,000-250,000 acres are normal-

ly cultivated annually, depending on the extent of flood water. Areas normally

under cultivation are only about 0.3 percent of PDRY's total area.

8. Approximately 80 percent of irrigated land depends on the utilization

of seasonal flood water. Floods are regular In the Second and Third Governor-

ates but largely irregular in the central and eastern regions where recurrent

major droughts lead to large fluctuations ifn agricultural output. Flood

irrigation in the Second and Third Governorates, especially in the Wadi Tuban

area and the Abyan Delta 1/, is developed to the extent that water rarely escanes

to the sea; these Governorates account together for approximately 65 percent of

the presently irrigated area.

0. lood irrigation ,sually permits onli one crop per year. with a high

seasonal work peak. However, when flood water can be supplemented by pumped

groundwater, double cropping becomes possible. S… far, rl… -- irri-ation is

limited, due to the relatively high capital and operating costs and uncertain-

ties regarLding susta4nable groundwater reserves 4i n most areas. _/ While

groundwater supplementary to flood water is being used to some extent in theSecond and Third Governorates, especially in the coastal areas, it is thet mai n

1/ Abyan Delta comprises the area irrilgated by the flood waters of both the

Wadi Bana and the Wadi Hassan in the Third Governorate.

2/ No country-wide survey has yet been taken to assess the groundwater po-

tential of PDRY but a mid-level acquifer has been identified in several

areas, e.g. in the Wadi Tuban, Abyan Delta and the Hadhramaut.

-3-

base for agriculture in the Fifth Governorate. The Hadhramaut has long experi-Pnrp in wp1l-irri{ntinn- and farmprA there have developed a sonhisticated systemof water distribution, often using underground tunnels for conveying water overconnQidPrabh1e dIiafsnrePs Tn the liadhrarnit there are approximately 3,500 wells-

10i Over two-thirds of the cultivated area in PDRY is norm.ally undercereals, chiefly sorghum and millet and to lesser extent wheat and sesame (AnnexTahle 7 ?) nf these sQtaple f^nodc most, if not nil nvo oi,heic:tnpp rrrnn,c

Surpluses reaching the market rarely exceed one-fifth of total production.The only ma4or cash and eXport crop is cotton, gro mn in the coastal areas, withstrong fluctuations in annual yield, chiefly because of flood irregularities,as is demon-r-Aed 4i A--a- Table 7.2. Veg-tables an.d fruits a minor cash

crops, concentrated in areas adjacent to major urban centers, while coffee andthe popular stimuulant qat are extensively grow i.n so4 e high-altitude areas ofthe Second Governorate (Yaffa, Dhala).

11. Livestock is of considerable economic importance in the subsistenceeconomUy, with goatLs andU sheep predominant. TLLhe total livestockL popiulatiJon isbelieved to be in the order of 3 million, of which an estimated 1.7 - 2 mil-liton are goats. Cattle, esti-ae onme prxmtl 0,0,aerie.L±JLI %i .dL±, L L WLCU LU JL1UULUCL CLP U..LUA±WL~L=. LtiJ'.,lJ%J$.~ae a

only where settled agriculture is practiced and crop residues are available asfodder. There are, Ihowever, the Ueginn'igs OU a smill dairy and pouLtry in-dustry in the vicinity of Aden, and Cuba is currently giving assistance inexpanding these activities.

12. Farms are generally small as subsistence farming predominates. Thiesize of a typical individual holding in the flood-irrigated coastal areas isbetween 2 and 6 acres, wnile farms irrigated by underground water are typicallyin the range of 8 to 20 acres. Although land formerly owned by the Sultanscould reach well over 500 acres, larger farms have not been common in P-DKY,since former landlords share-cropped or rented their lands.

13. Redistribution of land for the benefit of the landless was pledgedimmediately after Independence. In March 1968, an Agrarian Reform Programwas launched, which was subsequently amended by the Agrarian Reform Law No.27 of 1970. Under present legislation, no individual can own more than 20acres of irrigated land and 40 acres of rainfed land. The ceiling is raisedto 40 and 80 acres, respectively, for the kin of the first degree, with theState taking over all land in excess of the prescribed ceilings. Land takenover was to be redistributed to specified beneficiaries with individualallotments ranging from 3 to 5 acres for irrigated land, and double thatarea for rainfed land. Redistributed lands were to be organized under statefarms or producers' cooperative farms, with the restriction that the benefi-ciaries of land reform were not given title to the land distributed to them.

14. Land reform hias so far been implemented mainly in the western regionsof PDRY, and it has, in fact, often proved difficult to replace old and well-established owner-tenant relationships quickly. The reason lies partly in theshortage of trained manpower available to direct farm cooperatives and statefarms. By the end of 1971, approximately 65,000 acres had been distributedto about 19,000 peasants, part of them organized in 12 State farms and 15

producers' cooperatives. Despite the establishment of State farms and pro-

ducers' cooperatives, many farming activities are still based on share-cropping

and other forms of tenancy. Owner-operated farming continues to be done maostly

by temporary labor, recruited locally from landless laborers.

15. Apart from the producers' cooperatives associated with agrarian

reform, there were about 40 cooperatives at the end of 1971, which provided

either fuel, equipment and spare parts through short-term credits or were

engaged in marketing of agricultural products. They had about 19,000 members.

16. While grains, tobacco, dates and livestock are marketed private:Ly,

marketing of cotton, vegetables and fruit is carried out by public organizaa

tions. Cotton marketing (including ginning and export) is centralized in the

Lahej and Abyan Development Boards, which also control most of PDRY's cottor,

production under a contract and service scheme. Fruits and vegetables for

Aden pass through the hands of the Cooperative Federation for horticultural

Marketing, which also renders limited services to farmers by supplying seed,

fertilizers and pesticides on short-term credit. Outside Aden, however,

municipal markets for produce are the principal outlets. The Government is

currently studying the possibility of setting up specialized marketing corpo-

rations for various agricultural products, including cotton, foodgrains and

horticultural products.

17. Agricultural production remains short of demand especially in Aden,

and considerable quantities of cereals and livestock products are imported.

Domestic output normally meets only about half of domestic consumption of

cereals and probably less in the case of livestock products. Fruits and veg-

etables such as citrus fruits, potatoes, onions, and garlic are also mostly

imported. Agricultural exports consist mainly of raw cotton and hides and

skins. They have averaged YD 3.9 million annually during 1969-71 and their

value was much smaller than that of agricultural imports (YD 13.6 million).

18. PDRY's import dependence on food and the potential for higher exports,

especially in cotton, indicate that there is a considerable scope for expanded

agricultural production. PDRY's agriculture does not lack favorable conditions

for a sizeable increase in output, which could be increased considerably, to

almost double, by improved irrigation techniques and other modern inputs and

facilities, including improved transport to consumption centers. Known water

resources would permit a considerable expansion of the present cultivated area.

Iligher agricultural production would not only contribute to improve domestic

food supplies, but would also offer needed employment opportunities.

19. In the shorter run, improving existing flood irrigation schemes would

probably achieve quicker results than constructing new irrigation systems.

Particular emphasis would, therefore, have to be given to the fullest possible

use of available flood waters and to the reduction of water wastage by con-

structing additional diversion dams and the relining and improvement of exist-

ing distribution canals. Combined with the introduction of more modern farming

techniques, this should lead to a significant increase in output. Construction

and consolidation works along these lines, covering an area of 16,350 acres,

are envisagedU urLig tile present Development Plan (19i1/I72 - 193i/i4), withemphasis on the Wadi Tuban, Radfan and Ahwar areas, with about 11,000 acres tobe provided with im-,,proved irrigation systems. A total of eight new diversiondams are to be built in the latter areas. Three of them, located in the WadiTuban, have already been completed with Russian assistance. The benefits forsuch improvement works in existing irrigation systems would be greatly enhancedif supplemental groundwater could be provided, permitting a full crop cycle.This could lead to changes in traditional crop patterns, including the intro-duction of high-income cash crops and of new varieties, and animal husbandrythrough the provision of fodder.

20. The current Development Plan stresses the need to use undergroundwater. A total of 18,650 acres are to be prepared for cultivation during thePlan period. To achieve this goal the Government plans, among other projects,to drill 200 new wells and to construct the pertinent distribution network atState farms and producers' cooperatives, increasing total cultivated area byapproximately 11,000 acres; implementation of this program has begun. However,it appears somewhat doubtful whether the goal set up for additional well-irrigation can be achieved during this Plan period, considering particularlythe high estimated investment costs to the Government of YD 2.8 million. More-over, problems of water sufficiency and salinity, especially in coastal areas,will continue to create uncertainties until more comprehensive water surveysare completed. Major surveys under way concentrate on agricultural zonesespecially in Wadi Tuban, Ahwar, and Hadhramout sponsored by UNDP/FAO, theSoviet Union and the Government.

21. It can, nevertheless, be expected that well irrigation will steadilygain ground and permit extending the areas under cultivation substantially.It appears that water resources are probably adequate to take care of twicethe present cultivated acreage. However, a significant expansion of agricul-tural output also depends on access roads, on marketing and storage facilitiesand, importantly, on education and agricultural training of the farmers in-volved. As elsewhere, the process will inevitably be slow and difficult. Inthe short run, the better opportunities are in those rural areas that alreadyhave easy access to the main consuming center of Aden and to overseas markets,especially the areas of Wadi Tuban, Abyan and Ahwar. In these areas, landreform has progressed and State farms, cooperatives and the Lahej and AbyanDevelopment Boards provide an institutional framework for further investmentand agricultural extension work. Other areas, particularly in the Fourth andFifth Governorate, will be opened to further development when road constructionand improvenietit works, now underway, are completed. Tlhis may be particularlyimportant for the Wadi Hadhramaut in the Fifth Governorate. With the presentstate of knowledge it is expected that the cropped area in this region couldbe quintupled to over 100,000 acres. Preconditions for the exploitation ofthis potential and for extending existing irrigation systems appear particularlygood due to the long tradition and the skills of the Hadhramis in irrigationtechniques. however, much has to be done in determining available groundwaterreserves and their sustainable yield before major programs can be started.Nevertheless, there is already scope for an immediate start on development onthe basis of land now being used.

"2= A malor constraint to achievinc a stibstantiallv higher outrut ina-griculture is the nrelominanc- of nriritive farming methods in most areas.The sitnintion is exacerhated hv the lack of local agricuiltural expertsandl, conseruentl.v, the limited ability of the Ministrv of Agriculture anclAornrjnn Reform to iTndertake nroprams for exnansion of agricultural researchand extension services. Progress will remain Slo.T unless foreign technicalsisctanrce is etonnrd tiur cIhsfantia 1vI

23. An agricultural De'mnstration and Training Pronect was set upn witUNDPI/FAC assistance at F.l-Kod (Third Governorate) in 1970. tseful work hasbeen initiated in investi ating the possiil.iti ts of ne-.' v-rieties of cttonrand wheat, anonr, others, and in providing- pre- and in-service training tostudents and f-rmer-, including most of the staff from the iinistry ofAnnricii tlur- and Agririan Peform. Powever, experience gained during the last

two e-rs; reveaIel a ne^d for adaptirng the- activities at EF-K.od to the actualma-npow..er and extension worl-er needs and of strenpthening the traininp programs.The iLT /A) hi,las subsequently extended it-s support for El-kod untiil- 1975.

4. ~~ Ar ILnstitute fPor animal production an,. veterinary, research, an-'training has been establ]ished recentlv, w-ith assistance from the Soviet UTnionand. the k erman Democratic Republic. This Institu;te h I.- eqipe - Vz

modern laboratorv facilities and provides two-year courses for veterinary

assistants; a f,.rst c.-nrse ith 11 'i-8ci4nts is curJrii-1v hn4, held.

To cope with the serious shortage of trained cooperative farmers, a CooperativeEd.cictlon and-l Training Center is plann-.d for 1973, ITT.t suprrfoltND/I

The Masser High Institute of Agriculture at T.ahei, offering secondary - levelco r an(,l s itnce Leil t-1 t'' I ' 9/2 , det r et' iLvrl t'LUCiLtZ Lii h .LCULUAL-I

subijects, occuipies an important place in agricultural training. The graduate-

t-pe coturse, currentlv beng attpm"ed ,y 35 students, is expected to proLluce

much-needed teachirn and research personnel for the extension of PDRY's train-inr and research institutioLs. AJiltU,gtl e Lilt ss rHigIl Institute h[aS a far,.,

area of about 65 acres and an adequate livestock. section, tlere is a need forupgrading the existing facilities, especia1lly with1 regard to pra(tical trainingin the use o-f modern farm equipment and in 1.ahoratorv techniques.

Fislieries

25. Fish wealth along the country's 1,200 km long constline is a valuableresouirce, offering. i.mmedliate potentia.1. On3.y a sm.-ll part has so far beeneynloited, rninly by trnditiona]l methods, employing an estimated 13,000 people.Fresh fislh represents an important item in the diet of the population livingin the vicinity of about thirty small fishing centers along the coast. Fishconsumption in the hinterland is limited to tish preserved bv salting, dryinganC smoking. Thus, lomesti.c consumntion continues to depend on imports ofanned fish (in 1970 about 2,100 tons), dried and smoked fish (1,700 tons) and

smaller qunntities of sharkfin and frozen fish, valued together at YD 550,000in 1070, wlhile exports, comprisinn of mainly low-qualitv dried fish, haveremained so far well below the YD 1 million mark. Promising steps have beeninitinted hv the PDPY authorities, with considerable foreign assistance, toreplace tradi tional fishing prnctices with more modern techniques. With basicinvestment in landing and storage and processing facilities as well as intransport infrastructure, this could lead to expansion of PDRY's fisheriessub-sector over the next years, with emphasis on exports.

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26. The most abundant fish resources consist of pelagic species suchas sardines, anchovies, tuna and kingfish which are caught in surface watersrelativelv close to the coast. Other commerciallv important varieties compriseshellfish (principallv lobster and shrimps) and molluscs (principally cuttle-fish). Landings of pelagic fish species totalled about 100,000 tons in 1971,of which 9O percent consisted of sardines and other small fish. Conservativeestimates of FAO experts in the FAO/IUDP Fisheries Project suggest thatcatches of small pelagic fish could reach over 270,000 tons per year withoutinvolving over-fishing, while large pelagic fish such as tuna could yield20,000 tons annually compared to an estimated 7,500 tons in 1971. Includingdemersal resources (bottom fish), the estimated sustainable yield could reachwell over 360,000 tons per year or about three times the catch of 1971(118,000 tons). These are large quantities by international standards.

27. Traditional fishing techniques and lack of appropriate shore facili-ties, among other factors, have so far hindered anv substantial progress.Fishing vessels usuallv operate close to shore (about 6 miles) and have, ingeneral, neither any hauling nor cooling equipment. Of over 7,200 fishingboats in 1970 onlv 1,254 were equijped with outboard motors. while largerboats with inboard motors, suitable for more distant operations, numbered215. Lack of adequate on shore cnld stornge facilfties is another constraint.Since fresh fish spoils rapidly, quantities exceeding the local demand forfresh fish have t, hpe sun-dried or smoked niicklv- often involvine deteriora-tion in qualitv. It is estimated that about one quarter of the total catchi4 sold as fresh fish, while over 50 percent is used (in dried form) as

animal feed and fertilizer. The portion of the catch used for human consump-tion is hicher in the area of Aden, where aome small and old refrigeration

units are available.

28. To promote production, processing and marketing of fish and othermarine products, the Government eStabliShed in 1970 the Public Corporation ofFish Wealth (PCFW), which is noxw activelv engaged in fishing operations.

At~ the en f11, PCFW o d tr tra.Jlers and -LWJ.o 45 ft. steel boats,

while an additional 15 vessels were operating for PCFW in the framework ofoint v?entures, charter andA ",,rfr4 ,.t 4

nn greemnents. Catche on accnunt of

PCFW totalled about 18,000-20,000 tons in 1972. The Corporation is currentlyemplo-ving about 60n people and realized a net profit of Yn 0.4 million in1971.

29. PCFI-. has made a considerable contribution, with assistance frombilateral and multinational aIA donors, to upgrade fishing methods anA tointroduce simple preservation and processing techniques to individual fishermenPnd,- in psrticullar, to the 14 fishemmen's coo,erative soieie ithelpeA

establIsh. With technical assistance provided undler the FAO/UNDP Fisheries"lvevelop..ent Prolect, training i.n mi,dern fishing mir,thodus Lhtas bL1een griven tolocal fishermen. Trawling grounds have been established and lobster fishingI-as heen 'em,onstrate', 'eading to a first shi'pmi-ent of frozen lo'ster tallsiiki [I)~L Utlti l L 4IL L LtUJI _ L U I IL L iI4!i I U L U CI±LI~ 1 L11

to the United States. Bilateral aid from the Soviet IJnion was concentratedon fisheries research by providing a researcn vessel during 1969/70 ann ontraining of fishermben in lampfishing, traxwling and purse seining on two

Russian seiner trawlers handed over to PCFW. Since 1971, these two trawlershave been fully engaged in commercial deep sea spiny lobster fishing in ajoint venture with two Soviet freezer trawlers. Initially, the frozenproduct was marketed through a private company in Singapore. This is nowdone by PCFW. Also in effect is aid provided by the People's Republic ofChina in the form of fishing ships equipped with cold stores, cold and freez-ing stores, a repairs workshop, and three mobile refrigerators.

30. Also with Russian assistance, a Fisheries Training and ResearchCenter was set up in Aden in 1969, with a small branch in Mukalla. TheAden Institute, with a capacity of 105 students, runs 9-month practical coursesfor fishermen, three-year courses for students of the secondary level, and two-year courses for post-secondary level. The teaching and research staff con-sists of 25 people, of which 7 are Russians and the reamining young Yemenigraduates, mainly from Soviet universities. The Aden Institute has adequatefacilities to serve other countries as well as PDRY if appropriate agreementswere reached.

31. The Government has placed considerable emphasis on setting up ainddeveloping fishermen's cooperatives. Cooperative societies, which increaisedto 14 by the end of 1972, had been given preferential access to equipmentgranted by bilateral donors and to domestic credit. Presently, over 25 per-cent of the fishermen are riembers of cooperative societies. a percentageexpected to increase rapidly over the next years. Credits to cooperative so-cieties, totalling about YD 52,000 in 1970/71 and 1971/72, have been made avail-able through the Agricultural and Industrial Credit Department of the NationalBank of Yemen; these credits, granted in kind, were mostly for outboard motorsand transport equipment, and bear an interest rate of 5 percent with a maturityof 1 to 2 years.

32. A major obstacle in expanding fishing activities is the lack oflanding, freezing and storage facilities on shore, particularly outside theAden area. This at present hinders larger-scale industrial fishing operationsand, in particular, a greater exploitation of fish resources in coastal watersoff the Fifth and Sixth Governorate. where there is good potential. In theseeastern-most governorates, only Mukalla has a harbor allowing the landing,shipment and transshipment with the aid of lighters. The Mukalla harbor, how-ever, provides no safe haven from monsoon storms. Presently, the Government isseeking to provide adequate shore facilities in the Fifth Governorate, esneciallyin Shihr and in Mukalla, where a fishmeal factory is expected to start operationssoon (see para. 34). An IDA credit of $3.0 million will assist to finance coldstorage and freezing facilities in Shihr and Mukalla, including some modernizationof traditional fishing vessels operating from these two locationn8 The creditalso provides for a regional harbor study for the Sixth Governorate.

33. In marketing abroad, however, PDRY still lacks expertise. ThePCFW has therefore concluded various marketing arrangements with foreignfirms. Also in effect is an agreement with a Japanese fishing company,which has been granted the right of trawling in PDRY's coastal watersagainst payment of royalties (in 1972 about $2 million). The agreement,

so far been renewed annually, has most recently been put on a two=year basis.The main species sought by the Japanese is cuttlefish, an inkfish highly favoredin the Japanese market,

34. A majlor imnetus for PDRY's fisheries bubsector is expected from afishmeal factory now being assembled in Mukalla. The factory, partly financedby the Kuwait Fund, would process sardines and other small pelagic fish tofishmeal for export. Its initial capacity of about 150 tons per day of rawmaterial input is already too Wmall to handle the fish available, and it isplanned to increase capacity to 650 tons per day by 1974 and to 1,150 tonsper dav by 1980. However, more research to determine the sustainable annualyield of small pelagic fish particularly off the coast of the Fifth and SixthGovernorates, wo::ld be needed before the ''shmreal factory can be expanded toits full capacity. For the same reason the construction with Russian help ofa fish canning plarnt at Mukalla, previously planned to begin in 1972/73, hasbeen postponed until more is known about the potential yield of tuna in thewaters off Mukalla.

35. Good export opportun'ties exist for fishmeal, tuna and a variety ofshellfish, principally lobster. Substantial further marine research is neededt- provide a reliable Uasis for future expansion plans in the fisheries subsectorand to prevent local overfishing of determined species. In time, fish process-ing for export could become a major domestic industry, having a broad impact onthe economy in terms of value added, employment opportunities and foreignexchange earnings.

~L.L

36. Presently, there is little industrial activity in PDRY other thanpetroleum refining. The scope for industrial operations is limited by thenarrow domestic market and the scarcity of industrial raw materials. Fishprocessing for export may represent an important exception. However, devel-opment prospects for industry may improve if exportable surpluses develop incrops suitable for processing, such as tomatoes and tobacco. Discovery ofpetroleum and other valuable mineral deposits in commercial quantities couldalso change the outlook for industry.

37. The British Petroleum (BP) refinery at Little Aden accounts for anestimated 80-90 percent of total industrial value added. Built in 1954 for aprocessing capacity of 8.5 million tons of crude, the refinery processed onaverage less than 6 million tons a year during 1967-70, and in 1971 about 3.4million tons, because of major maintenance works. The reduced level of opera-tions after 1967 resulted mainly from the closure of the Suez Canal in thatyear leading to a sharp decline of bunkering at Aden port. Also, in the yearssince 1967, radical technological changes in world transport have taken place,i.e. the emergence of super tankers which cannot operate with the current Adenport facilities. This suggests that the refinery may operate well below cap-acity for some time.

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38. Nevertheless, the refinery remains important for the economy, slpecial-ly in the area of Aden, emp1omving *loe to 2,000 neople and contributing aboutYD 4.6 million (1971) through local cash outlays. Payments to government in-oprating foee and dre^'t t-xpe inrreased to YD 2.1 Tnilinn in 1970 mn-ainly as

a result of the revision of the corporation income tax in that year, but die-clirned t- YD 1.7 m-illion. in 1Q71 whon thep rpfinpru rpdiir^d itc nnopetionns.

3h a few,, m.l 1 ind,ustrial enternrises apanrt-t i f¶ro the refinv-y.

Some are engaged in traditional activities such as solar production of salt,bu.i'ding and repairing of woode vessels (Aho-s -nd trhe -mn-f-cure of con-

struction materials, aluminum ware and furniture, including a bottling plantCor sol r 4n _1s1 anA_1 a saa A 1 pl1ant, all located AAe n A. T rn ar c_ A o. AnA

ginneries at Abyan and Lahej and some seed-crushing plants. Traditional in-dustrUes h4ay b ag..ating since 19 i6-7 anA. in som.e cases a markeA Aeclia.ne tnproduction has taken place.

40. Several new industrial enterprises were completed in recent years,rUOst t)L Ul tIAU W.LtiL goUVeLrnmICIen t LLpiLacpatLion il udings smatL'A. plants ±aaLorU appareL

and plastic footwear, a match and a paint factory. In the process of comple-tion are a cigarette fLactory an a proLJect to rehabilitate tlCe tannery atSheikh Othman, at the outskirts of Aden, which local merchants tried to estab-lshIL Uack n 1l96 u0 but was abandoned afLter one year because ofL teclhnical udiL.fi-

culties. The machinery is presently being overhauled and reassembled, and itis expecteu thLat the jpliant, Ioperated as a gover.-ment enteLprLA.w, woulU event-

ually process 6,000 hides and 300,000 skins a year. Linked to this rehabil-itation project is a pilot deraonstration center fLor the manuILacture of 'leatJh'erfootwear and other leather products, supported by UNDP, and designed to trainshoemakers and to produce footwear and leather goods while training.

41. Lack of skilled manpower and technical know-how are major problemsfacing industrial enterprises in PDRY, aggravated by the wide range of typesof equipment used. Maintenance problems and excessive machine down times are,however, reduced considerably wherever robust and less sophisticated machinerycould be used. For this reason, even new industrial ventures, such as thematch factory, have opted for the simplest possible machinery to keep mainte-nance at its lowest.

42. Prospects for further industrialization have to be seen against thebackground of scarcity of industrial raw materials and the small and presentlysluggish domestic market. These factors, plus the serious lack of domesticfinance, already cause considerable delays in project execution and cancellationof projects envisaged in the current Three-Year Plan (1971-72/1973/74); theywill continue to set rigorous limits for future plans. Apart from export-oriented fish processing, the Yemeni authorities now hope that a spinning andweaving factory, to be built with Chinese aid near Sheikh Othman at a totialcost of approximately YD 3 million, may become the country's largest indus-trial project. With a projected capacity of seven million meters of cottontextiles per year, the plant would process domestically produced long-stablecotton and is expected to employ about 1,250 workers on a two-shift basis.Eventually it would export part of its output. Under the agreement with thePeople's Republic of China, the Chinese would also be in charge of manpowertraining for this factory.

43. TheLi overrl-tert '-s attached cornsider-ble IpOtneoth conLi11U8-iJ. I[1e I.Ut7i2 ~ 1 Uda dL 1CC CULI81 atUi~ zxm LanCe LU LLIe Oli18

tion of geological prospecting throughout the country. Prospecting is underway, in coliaboration with the Algerian company SONAMRACH, but as yet no oiior other mineral deposits of commercial significance have been discovered.There are, however, large limestone deposits in the Third Governorate wnichcould provide the basis for the production of cement, provided the cementfactory envisaged in tbe present Tnree-Year Plan can be set up and construc-tion activities overcome the depression they have been facing since 1967.Both appears unlikely it present financial constraints persist. I/

Public Utilities (Electric Power and Water)

44. PDRY's power sector is limited to the Aden area and to a few munic-ipalities in the hinterland relying on small diesels for generation. The powergenerated throughout the country is estimated to be in the order of 120 mil-lion KWh annually, with roughly 60,000 consumers billed. 2/ There are size-able development needs arising from both obsolete installation and equipmentand the lack of distribution systems in the hinterland.

45. Since 1969 the Public Corporation for Electric Power (PCEP) isresponsible for virtually all power generating and distribution facilitiesin PDRY. In Aden it has a power station with four 5-MW steam units installedin the period 1954-64 and about 5 MW of effective generating capacity in smalldiesel sets at other stations. There are also two 6.5 MW gas turbines whichare inoperative because gas is not available but during 1973 these will beconverted to distillate fuel. Including 3 MW purchased from the BP-refinery,PCEP's available capacity in Aden will then be 41 MW and the firm capacityafter reserve allowance will be 36 MW, adequate for the expected 1973 peakload of 30 MW. PCEP plans to install five 5-MW diesel sets to meet loadgrowth through 1978 and for further growth is considering installing largersteam units, possibly 25 MW size, to replace the existing steam generation.Load is expected to grow quite rapidly, partly due to planned extensions ofthe distribution system into the Second and Third Governates. To generateadditional funds to meet its investment needs, PCEP is currently seeking gov-ernment approval for a revision of its tariffs, which have remained unchangedsince 1954. PCEP has also to overcome a critical shortage of qualified man-power, if expansion plans are to be realized as planned. The bulk of plannedinvestments falls in the period following 1973/74; envisaged investments dur-ing the present Three-Year Plan (1971/72-1973/74) amount to only YD 500,000,concentrated primarily on improvements of the distribution network of theFirst Governorate.

I; ine cement piant was to nave a capacity of 100,000 tons or cement peryear, if it is run on a three-shift basis. Its financing and the supplyof electric power are as yet unsettled.

2/ including bulk meter supplies (Public Corporation for Eliectric Powerconsumers only).

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46. Water supply depends entirely on underground reserves. While Adenhas an adequate supply of water from 53 boreholes yieldina an navrag nof 10.5million gallons per day, conditions in other parts of the country reach frompoor to critical. Mukalla- the second largestr nrhbn rcnter with about 45,000inhabitants has been facing water-rationing, and rural areas depend primarilyon onen dug wells which are invariably contaminated. Except i Aden, waterquality control is very poor or non-existent. Existing water supply facil-ities need to be imnrnved in all the uirhbn centers, n in m ny cases addi-tional boreholes may have to be drilled. Improvements at Mukalla are partic-ularlv nrgent if the expectpd increase in demand for water from severa'l devel-opment schemes, such as fish processing, is to be met.

47. The Public Water Corporation (PWC), established in 1970, is inciarge nf the country's water supply. However, so far Jt is operating onlyin Aden, Mukalla and a few other centers, with water supply elsewhere be:Lngru nby m l About 26 des-rtwatering points are directly operated and maintained by the Government, andthir number splan4c d n to b 1n 4creased to 4.

48. The extension of PWC's services and the planned objective of estab-lishing a national water supply network is hindered by a critical shortage ofadministrative and technical personnel as well as by financial constraints.The latter are partly a result of the Government's current thinking that watersupply should be a free serv4ce or,atU.Ost, an enterprise tLLiL uoes not re-cover all costs. In a 1972 decree, for example, the Government provided thatwater consumers with metered supplies receive a free allowance or 300 Imp.gal. per month.

Transport and Communications

49. For historical reasons, PDRY's transport and communications systemgrew mainly in Aden and its adJacent areas, wnile connections with the cen-tral and eastern regions were sparse. Independence and the establishment ofa centraLL adUinistration, however, made tne extension and improvement of trans-port and communication facilities a foremost task of government, to strengthenthe political and economic integration of the new State.

Ju. Due to the size of the country (about the same as Italy), the harshphysical geography and the wide dispersion of population, the task of build-ing up an adequate infrastructure is enormous in relation to the country'sfinancial and skilled manpower resources. The Government is therefore rely-ing heavily on assistance provided by bilateral and multinational aid donors.Priority has been given to road improvement and construction works.

51. At present, PDRY's land transport depends on a network of only4,700 km of roads and tracks, and there are no railways. Air transport isconcentrated on Aden, with some, frequently irregular, connections maintainedto fourteen other small domestic airstrips. Seaports are at Aden and Mukalla,the latter is frequently unusable during summer monsoon winds. Public tele-phone services are available in the Aden area and Mukalla only, intercityservices do not exist. Wireless services between Aden and three other citiesare available for up to two hours a day.

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Road Transport

52. Road transport is the principal means of transportation in PDRY.But the available network, consisting of about 4,700 km of roads and tracks,is extremely sparse for a country of about 290,000 sq. km, and a sizeablevolume of transportation is still carried by camels and donkeys. There areonly about 330 km of asphalted roads, most of them in the Aden area. includ-ing some connecting links to the Second and Third Governorates. The condi-tion of these roads is fairly good, despite lack of maintenance, primarilybecause they are relatively new and traffic is light. In addition, thereare about 200 km of cobbled roads in the Fifth Governorate. The remainderare merely tracks connecting the population centers of the hinterland. Run-ning to the extent possible along Wadi beds. they are largelv negotinble bylandrovers and light trucks only and impassable during flash floods. Con-sequently communication in the hinterland is difficult and costlv and vphi-cles wear out quickly.

53. The number of motor vehicles operated in PDRY is not exactly known.Estimates derived from the incomplete central files of the Traffir Lircns4ngOffice place the inventory of motor vehicles in operation at over 26,000 in1971, with more than half registered in the Firsr and Sconnd Governorates.It is believed that the number of vehicles ir. operation has been decreasingsubstantially in recent vears; with new reg4str2tionn being small comparedto the estimated number of vehicles scrapped. however, despite the presumeddecline in operated motor vehirles, there are inA4r-2t4nnc that t overcapac=ity in commercial vehicles, which arose from sales of vehicles left by theBritish upon evacuation nprsnists.

54. Traffic everywhere in ths. cnt- is very light except for the roadsleading to the agricultural areas of Lahej and the Abyan delta, where most ofthe countrv's cash crops are gronn. Traffic to and within the hinterland issparse, mainly because of the predominance of subsistance agriculture and thewide disnersion nf population centers *A a general rule, goods transportedto those areas consist of supplies of fuel and light consumer goods, includingfood- whilp rpriern4ng trucks carry a c l po e if r r s- ~6M~ FLUUL= A.I. 1L C cdLLU sUr-pluses, or they return empty. The Government has given high priority to roadimprovement and ncnstrurtifion works to ln tbe 4mportant population centers

of the country and to open the less developed central and eastern regions.For road nro-iprt it has alloted-A YD 7.37 million or 18 percent of totalinvestments planned in the present Development Plan (1971/72-1973/74).

55. The most important road project under execution is the construc-tion of an asphalt-paved road linking A- Ay in the Third Governorate withMukalla. The road will have a total length of about 500 km, of which abouthalf is to ha constructed durIng the ----ent Plan. The project is designedand executed by Technical Assistance from the People's Republic of China.Construction began in. 1971 at Am. Ayr. and is reportedly progressing on scned-ule. This could mean that the total road would be completed as planned by1976. Together with th' ue governm,ent-financed Aden-Abyan road (45 km), whichis partly completed, the Am Ayn-Mukalla road would create a continuous pavedroad connect-ion between MUdLen adLLU Mukalla, the two iargest urban centers inthe country.

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56. In the Fifth Governorate plans have been m,ade to construct t-h,eMukalla-Saywun road (about 320 km) which would connect the relatively denselypopui la ted and pot entially r ich I-Tad A 4HU-1-_-+-4 - -4ada.aua with the ciya t of _)4

Mukalla. Minor construction works, carried out by the Department of PublicWorksh, bega-n from both ends 4in 107. ThI-e pro4ect is supported by tw TIDAWorks, ~ t,t,tSA~*t,O~ L I I *- Ll jJ A&~W .L

credits which financed first feasibility studies and subsequently detailed

5n. Another ..po t road - -t u r is te 36 L road between

J1 . at I.,aO .ttajt. a . -. taa 1 CL.. U UAtL- O .. UL-1 i, CUUL JU UC L. C *

Kersh and Nobat Dukiem in the Second Governorate, for which UNDP is providingroad- equipment an A experts . ThT.en co.,pleted,A A paved road would l.k Ade

a. Ia C.tajiniCa .. n... apI. .,* ALlCI L~sp .. tU, a paveu roa'u wouu±u' kknk- Aucenwith the Yemen Arab Republic.

58. Low priority has been given since independence to road maintenance,and existing workshops of0 thLe Public Work s Diepartmenit (P'rwu) are in bad conditionThis is mainly because of financial and technical constraints. In IDA's firstcr l' to ns" /eI Q7 e _C Z_ _1 _2_3 __ __ -__ _ _ __ I _ Icetu tU LJoIR (1971 f Undsb we:ret LinclUUUU fUL purchasing spare parLs and equip-ment for PWD's workshops, and UNDP joined the project with a grant for t'hecosts oU' consultant services to reorganize the Pr'W. IDA's second credit (19i/2)provided for an extension of these consultant services. UNDP is currently fur-nishing direct assistance to thLe rwD to enable it to complete its road construc-tion and maintenance program. Scholarships abroad and training within for

.LdL k LIVC daObt) UeCeL LLUXUUCU ll LLICSbtC pLUJeLLS.

Air Transport

59. PDRY has one international airport at Aden, used by eleven foreignairlines, and fourteen small airstrips scattered throughout the country. Ofthe airstrips in the hinterland all but one are unpaved and lack proper airtraffic facilities. A domestic carrier, Alyemda Democratic Yemen Airlines,operates the domestic and a rew internationai rlights.

60. As can be seen in Appendix Table 8.7, passenger and freight tratticat Aden airport resumed growth after 1967. But activities are still much be-low the pre-Independence level; aircraft movements in 1971 were half thoseof 1965. Nevertheless, with the Suez Canal closed, air transport constitutesan important international link, largely replacing maritime transport in pas-senger traffic and to an increasing extent in cargo, including the transportof equipment. Domestically, air transport is, in the absence of adequateland conmunications, frequently the only connection to remote areas.

61. Because of this increasing importance of air transport, a number ofimprovement works and the purchase of additional aircraft were envisaged inthe current Development Plan. Tlhe projects listed included the extension ofthe runway and improved service and safety installations at Aden airport,rebuilding Rayan airport Lo become the second international airport of thecountry and upgrading the airstrips to Attaq, Al-Churrat and Al Gaita. Butimplementation of these plans appears to face major delays, resulting mainlyfrom budgetary constraints. During the first year of the current Plan (1971/72)progress was made only in improving and expanding the terminal building at Aden.

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62. With UNDP/ICAO 1/ technical assistance, training is being given tolocal staff in air navigation and aeronautical meteorological services. Theassistance includes provision of meteorological instruments and telecommunica-tion equipment, primarily to adjust the facilities at Aden airport to inter-national standards. In addition, UNDP is supporting the Sanaa-Aden PilotTelecommunication Link, which is presently being set up. UNDP assistancehas also been given to the Department of Civil Aviation, and fellowshipsfor training abroad of local staff have been granted.

The Port of Aden

63. Shipping activities at the Port of Aden have remained.depressedin recent years. The number of ships calling at Aden was on an average of122 per month in 1971 against 520 in 1966 and may have declined further in1972. In 1971, both dry cargo and oil handled had decreased to their lowestvolume since 1967 (see Annex Table 8.5). The drastically reduced level ofport activities is mainly a consequence of the closure of the Suez Canal.But the emergence of competing ports in the Red Sea region, which had at-tracted much of Aden's once thriving entrepot trade and transshipment ac-tivities, also contributed.

64. Revenue and expenditure of the Yemen Ports Corporation reflect thereduced level of port activities (see Annex Table 8.6). The Corporation, em-ploying about 1.200 people on a permanent basis, has been successful in gen-erating financial surpluses since 1969/70, largely however, because investmentoutlays became negligible. There are no immediate nroiects to be realized atthe Port of Aden which would call for major investments in the next few years.

65. The Yemen Ports Corporation is also responsible for the managementof the Port of Mukalla which is basicaliv a lighterage nort of local sionif-icance. However, the role of Mukalla port is going to change gradually asnew develonment schemes, particularl- in fisheries and fish processing, comeinto being. Provisions are presently being made by the Corporation to in-crease the port'cs handling capacity and safety. The projects comprise theconstruction of quays and a breakwater as well as the establishment of marinewireless commiuniratonn Mukala and Aden, Maior dredaing works atMukalla port are also envisaged.

66. Coastal shipping plays a minor role, mostly handled by dhows. TheNational Shipping Company is operating one coaster of 200 dwt and a numberof lighters, tugs and launches used for stevedoring.

1/ International Civil Aviation Organization.

III. POPULATION AND FEPLOYMENT

67. In the absence of any population census or vital statistics for thewhole country, the size, composition and growth of PDRY's population can onlybe approximated. Official estimates for 1972 place the country's total popu-lation at about 1.5 million. The rural population is estimated to compriseroughly one mi4lion people, of which about 80,000-100,000 are believed tobe nomadic. W4hile these estimates would place the overall population densityat only 55 persons per sq. l.U., population concen.trat'Lois in the three westernGovernorates and in parts of the Fifth Governorate are far above average. Inth,e First an' Fifth Governorate thlere are a'so the three largest cities of thecountry: Aden, writh an estimated population of about 250,000, Mukalla (about45,000) and Saywun (20,000-25,000). A general population census is now beingprepared for execution in 1973.

68. The growth rate of population is assumed to be between 2.7 and 3percent per annum, which is comparable to other neighboring countries. Tihehigh population growth is reflected in the high share of young people intotal population; the Miinistry of Education, for example, presumes as a work-ing hypothesis that 50 percent of total population is below 20 years of age.There is no official fiamily planning program.

69. The employment situation is grave and of great concern to the Gov-ernment. It is estimated that 8,000-10,000 persons enter the labor marketevery year, aggravating further the serious open unemployment in the cities,particularly in Aden, and augmenting the extent of disguised unemploymentelsewhere in the country. Consequently, although a large number of thosepeople who found themselves jobless after the withdrawal of the Britishforces at Independence 1/ have been absorbed by the expanding public sector,open unemployment has not declined and is still affecting over 15 percent ofthe country's total labor force.

70. The persistence of unemployment, partly due to the diminished serv-ice sectors, points again to the need to expand the commodity - producing sec-tors agriculture and industry including construction, and to utilize labor-intensive techniques to the extent feasible. To alleviate some of the pres-sure on the employment market that comes from those people who otherwise wouldseek to enter the labor force for the first time (at the age of 16), it wouldalso appear worthwhile to consider extending the scope of the youth brigadestowards a greater participation in works for community development, farm de-velopment etc., if on-work training and certain other educational facilitiescould be provided at the same time to prepare participants for subsequentemployment. Furthermore, development work might be incorporated in themilitary service to become part of an overall technical training programfor draftees.

1/ Estimates for 1968 ranged up to 20,000 - 25,000 people for Aden.

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Education and Manpower Training

71. In recent years there has been a rapid expansion of the public edu-cation system, particularly in primary education. Participation rates havegreatly increased as has the number of educational facilities and teachers,and educational opportunities have been extended into rural areas, wherebasic education was formerly virtually nonexistent. lIowever, despite theprogress made in recent years, the country still faces one of the highestilliteracy rates of the Middle East (over 80 percent) and a great shortageof educational and training facilities, including qualified teaching staff.To cope with these problems, the Government aims at rapidly expanding prim-ary education to achieve an overall participation rate of 85 percent by1979/80 (compared to about 67 percent in 1971/72) and strictly subordinat-ing post-primary education to respective professional needs. The broad ap-proach to planning of primary education, while guided by the principle ofsocial justice, may, however, prove unfeasible, given the serious budgetaryconstraints and the high recurrent and, in particular, capital costs neces-sary. It also appears unlikely that teacher training can be stepped up intime to meet the projected needs.

72. While universal primary education would be of great future benefit,the present generation would still not be equipped to assume a greater rolein the country's economic activities, and would in effect remain educationallydeprived. At the present stage of economic and social development, a reas-sessment of priorities in education may, therefore, be warranted, givinggreater attention to the upgrading of existing manpower and on-the-iobtraining than on concentrating on and allocating the limited resources touniversal education of the young.

73. Primary schooling in PDRY is for six years and the age groups 7-12.Although as yet not compulsory, it has experienced a fast expansion in recentyears. Enrollments in public primary schools went up from about 85,000 in1968/69 to over 156,000 in 1972/73, leading to an increase in the averageparticipation rate from an estimated 42 nercent to 67 nercent during thesame period. liowever, there exists an imbalance in access to education,expressed in a verv low particiDation of female puDils in all relevant agegroups. The approximate participation rates on the basis of 1972/73 enroll-ments were 33 percent for girls but 106 nercent for boys and are, particularlyin the case of boys, inflated by enrollments of overage students. 1/ Like-wise. regional narticination rates are uneven, still beina the largest in thethree western governorates.

1/ For example, first enrollments still include age groups of eight, nineand more.

= 10

74. Particular emphasis is currently being given to improving special-ized education facilities at thLe post-preparatory and post-secondary levels,both for full-time students and for apprentices already employed. For tech-nical and commercial education tnere is now one technicai institute available,the Maala Technical Institute at Aden, offering full-time courses for threeyears at the secondary level and Dart-time courses of two to four years dura-tion; 1971/72 enrollments were for 241 full-time students of which half wereattending technical courses. In addition, there were 123 part-time studentsin 1971/72, mainly receiving training in mechanical subjects. In view of theshortage of educated and trained technicians, administrators, managers andaccountants, the upgrading of the Institute to a polytechnical institute byintroducing two-year post-secondary courses at both the technical and thecommercial wings is currently being envisaged. The prolect, scheduled tostart in 1973, is supported by the uNr-P and would have a combined capacityat the post-secondary level of 400 students. The technical wing would offercourses in civil engineering, electrical engineering, mechanical engineering,refrigeration technicues and electronics. In the commercial wing the subjectswould be accountancy, management praxis, and economics. The project envisagesalso the training of teaching staff and additional short-term courses forcommercial, managerial and administrative staff already emploved with thepublic administration or enterprises.

75. The Government also plans to establish a technical institute atSavwun, which would primarily be oriented towards the manpower needs of theFifth Governorate. It would consist of four wings: an academic, an agri-cultural, a technical and a commercial. Training would extend over a periodof five vears after prenaratorv school, starting with a capacity of 400students and an ultimate one of about 1,600 students. In its agriculturalwing it would be complementary to the Nasser Institute at Lahej, concentrat-ing on subiects such as pumping techniques, irrigaton and geology, which arelikelv to be needed most for the planned development of the Wadi Hadhramautarea. In its engineering wing it would be complementarv to the Maala Tech-nical Institute. For agriculture, formal three-years courses at the second-ary level are offered at the Nasser Institute, with bilateral assistancefrom Egypt. The secondary level courses are additional to the graduate-type courses assumed by the Institute at the end of 1972, and were attendedbv 156 students in 1972/73. For fisheries, secondary and post-secondarycourses are run by the Fisheries Institute at Aden (para. 3n).

76. At Present PDRY has only one institute of higher education, theHigher College of Education at Aden. H4owever, since the Hligher Collegestarted operating onpl in 107n, virtuallv all training at the higher levelsso far has been achieved through overseas courses. Tables 10.2 and 10.3show the number of students abroad, the sponsoring countries and the subjectsto whichi grnduation is being sought. Enrollment at the Higher Collece ofEducation tOta11ed 186 in 1071/72. An additional 110 first year studentsioine(! the college in 1072/73. The college staff consisted of ahotit snteachers, of which about 35 were local professionals trained abroad andthe remainder experts recruited through TMESCO and b{flatera1 agrementc

IV. 'DEVELOPMENT PLANNING

77. Plann[ng for economic and social development is recent in PDRY andfaces great difficulties because of the shortage of qualified staff, and thelackl o essential statistical information. Effective planning is hamperedby limited domestic financing capacity (which turned out to be even smallerthan originally expected) compared with the multitude of pressing developmenttasks, so that the level and the direction of development investment dependsin mnany cases more on aid actually forthcoming from bilateral and institu-tional donors than on the aspirations expressed in development plans. De-velopment plans have so far consisted essentially of a list of ongoing andplanned projects for which priorities are not specifically given, with thedanger that local currency component (or the foreign aid contribution) fordesired projects may not be available at the time foreseen. But practicalmeasures have been taken since the second half of the first year 1971/72 toensure the availability of these resources.

78. Efforts to set up a centralized planning system in PDRY started inAugust 1968, when a iligh Council for National Planning was established todetermine development strategies and to prepare a comprehensive economic andsocial development plan. In 1969 a planning Board was established within thestructure of the Economic Organization for the Public Sector and NationalPlanning. The tasks of the Technical bureau which was created in October1969 and which was attached to the Prime Minister's Office and those of theDevelopment Section i the Ministry of Finance, were moved, by a Resolutionfrom the Council of Minister, to the Planning Board in January, 1971. InSeptember 1971, the Planning Board was replaced by a Central Planning Com-mission (CPC), which became separated from the Economic Organization and at-tached to the Council of Ministers, with the Deputy Prime Minister, and sinceMay 1972, tile Prime Minister as its Chairman. The functions assigned to theCPC comprise project preparation and the drawing up of short and long-termdevelopment plans, including supervision of their implementation. Other func-tions include the conclusion of bilateral aid agreements and the preparationand coordination of aid programs of the United Nations. The CPC reports tothe Council of Ministers through the High Council for National Planning, con-sisting of six members: the Deputy Prime Minister, 4 Ministers, and theTechnical Director General of the CPC.

79. The work of the CPC is administered by a Technical Director General,who also heads the four general departments of the CPC (Economics, Finance,Technical and Economic Cooperation, and Central Statistical Office). TheDeputy Director is in charge of the four sectoral departments (Agriculture,Industry, Public W4orks and Communications, and Social Services Department).Due to serious staff constraints, the CPC employed at the encl of 1972 only 14professionals in its general departments and 8 in the sectoral departments.The CPC up to now has also set up planning units in all Ministeries and isthinking at present to set up similar units in the Governorates, but it willtake time before these units are fully operational.

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80. Considering the numerous difficulties in setting up a planningmachinery it is not surprising that PDRY's first Development Plan (1971/72-1973/74) was drawn with substantial technical assistance from the USSR. TheThree-Year Plan stated a basic long-term objective of promotine growth in t-hecommodity-producing sectors by increasing productivity in existing activ:Ltiesand by diversifying production. To reduce unemployment, manpower-ahsnrbh:ngprojects were given highest priorit:y. Rising per capita incomes and an equit-able income distribution were to be achieved over time. It wan alsn hoped thAtthe strategy of the Plan would lead to a reduction of import dependence, par-ticularly in food. and create export surpluses. Addltinnal long-term objiec-tives of the Plan were expansion of social services and achievement of economicintegration between the two Yemens.

81. For the Plan period proper, the Plan presented a comprehensive listof on-going and planned projects calling for investments of both the nublI rand private sectors of YD 40.3 million over the years 1971/72-1073/74. Em-phasis was given principally to investment in three sectors: Transport andcommunications (32 percent of total Plan investment), agriculture, includingfisheries (26 percent) and industry (24 percent). While these three sectos-absorb together about 82 percent of total Plan investment, only 9 percentwas allocated for education and other social services (see also Annex Tahl.2.1). Specific sector policies to be followed were not formulated.

82. About 46 percent, or YD 18.5 m 4114n of p1-ed investment wasexpected to be financed from foreign sources, mainly bilateral aid; 39 per-cent of finance 'YD 15.9 mlllion) was expected to be provided by the Govern-ment, partly derived from profits of the nationalized sector, 1/ and the re-mainder (1 rcntwas to come from private sources and from .e rest OL

the public sector, e.g. Public Corporation for Electric Power and YemenPorts Corporation.

83. Actual spending for the first year of the Plan (1971/72) was onlyabout YD 4.2 million, compared with planned outlay of YD 9.9 million, revisedfrom the original YD 13.5 .411ion. The shortfall resulted -ainly from thelack of domestic finance, but administrative difficulties especially the lackof skills for proJect execution, ar,U thle slow pace of commitment from linesof credit from some bilateral sources also contributed. Achievements in1971/2 were partLicuLarLy low in industry, health, education and in trans-port and communications. Disbursements were, however, expected to increasein subsequent years Uecause of efforts being made by the Government to copewith some of the constraints mentioned above.

84. Preparation of a second plan, covering the five years 1974/75-,978/79 nas recently begun, again with considerable assistance from Russian

advisors but with substantially enlarged participation of Yemeni counter-parts, some of whom have been trained specially for this purpose in the

1/ See paragraph 91.

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USSR. Furthermore, the Ministry of Industry and Economy will be receivingUNDP assistance later in 1973 in preparing an industrial development planfor 1974/75-1978/79. These steps and pending improvements of the statisti-cal system, including a first general census, should bring about importantimprovements in both plan preparation and execution.

V. PUBLIC FINANCE AND MONETARY DEVELOPMENT

85. Against the background of the serious constraints facing PDRY uponIndependence, the country's fiscal performance has been remarkable. Budget-ary policies have been conservative and effective. Government income has beengrowing fast from YD 9 million in 1968/69 to YD 16 million in 1971I72, mainlybecause of the tapping of new sources of both direct and indirect taxation.Severe measures were taken to reduce expenditures, which dropped by anoroxi-mately one-third in 1968/69 partly due to heavy civil service salary cuts.In recent years, however, the need for expansion of education, health. socia1services and government administration outside Aden has absorbed most of therise in revenues. Nevertheless, the Government has kept the budgetary deficitat the same level for the past three years.

Government Revenue

86. Direct taxes consist mainly of taxes on business income and profit(corporate) and on wages and salaries- Revenues from corporate tax have beenincreasing rapidly. Apart from a slight decline in 1970/71 caused by uncer-tainty of nationalization, they incrrased from nearly YD 1 million in 1968/69to YD 2.7 million in 1971/72. It is worth noting that the nationalized com-panies are not exempted from corporate tax in PDRY, but are treated on anequal footing with private companies. According to Law No. 37 (1969) whichregulates the nationalized companies, 25 percent of their post-tax profit isto be paid into the government budget. 1/ Public revenue from wages and sal-aries recorded a neak of YD 1.6 rilliorn in 1969/70. This was related -o theintroduction of a special tax in late 1968 on wages and salaries of employeesin the private sertor. The introduction of the special tax was meant tocounteract the salary cuts imposed on government employees in March of thesame year. Revenue from waaes and salaries, however, declined after 1969/70due to the drop in the number of expatriate employees and lower wages in theprivate sector.

87. Indirect taxes consist mostly of excise taxes and import dutieson certain consumer goods such as tobacco, cigarettes, alcoholic beveragesand nat. Revenue from indirect taxes rose by 25 percent in 1969/70 becauseimport tariffs were increased. In 1970, the Government introduced a general

1/ In addition, 50 percent goes to the Central Planning Commission to beallocated for development purposes and the rest (25 percent) is tocompensate the former owners.

import tariff which covered all imported goods. As a result, revenue fromindirect taxes recorded a further sharp increase, and import duties became thelargest source of revenue, accounting for 47 percent of total tax receipt:s in1970/71 and 51 percent ir. 1971/72 (see Annex Table 5.2).

88. Non=tax revenue is derived mainly from the sale of governmentproperties, transfers of profit from the Currency Authority, and departmentalrevenue. It recorded a drop of nearly 25 percent in 1971/72 as a result ofa substantial decline in transfer of profit from the Currency Authority.

89. The Government is considering to reform taxation and to improvebudgetary procedures and coverage. In the 1973/74 budget, the budgets ofthe Central Government, and the Fifth Governorate will be consolidated.Budgets of public enterprises will also be incorporated in the general bud-get at a later date. Also, the Ministry of Finance wishes to increase directtaxation from the two major commodity producing sectors, viz agriculture (in-cluding fisheries) and industry. The current share of the agricultural sectorin the total revenue is negligible, amounting to less than 1 percent. Directtaxes on agricultural products are currently confined to a few products, mostlycotton. Fisheries are the most promising subsector for an increase in Govern-ment revenue. In industry, the Government is facing a dilemma in its attemptsto raise revenue from this sector since this may conflict with the policy ofproviding incentives for private investors through tax concessions. However,the Government:s current strategy is to increase direct taxes only on indus-tries which are enjoying a substantial profit margin and on those producinggoods of a relatively inelastic demand, such as tobacco.

Government Expenditures

90. The sudden drop in British budgetary assistance after 1967/68 forcedthe Government to reduce expenditures drastically. Expenditure in 1968/69dropped to two-thirds of the previous level, mainly due to a sharp curtailmentin purchases of materials and supplies and to cuts in salaries of all Govern-ment staff (civil service, armed and security forces), with the exception ofthose employees whose salaries are under YD 15. However, the urgent need inthe past three years forexpansion of government administration, educationand social services, particularly in rural areas, resulted in a rise inexpenditure by 14 percent in 1970/71 and by 18 percent in 1971/72. Defenseexpenditures also increased due to the continued tension between PDRY and herneighbors. Nevertheless, the Government has been successful in keeping thebudgetary deficit at about the same level for the last three years, financedmainly by borrowing from the banking system and partly by running down govern-ment assets (see Annex Table 5.1). In August 1972, the Government resorted tofurther and even harsher salary cuts ranging from 15 percent to 80 percent,from which the Ministry of Finance expects a saving in the range of YD 1.5to 2.0 million. Despite all these attempts to cut expenditure, the authoritiesstill expect a budgetary deficit during 1972/73, although smaller than in theprevious year.

- 23 -

Summary of Government Finance, 1968/69-1971/72

(In YD Millions)

1967/68 1968/69 1969/70 1970/71 1971/72

Domestic Revenue 8.94 8.96 11.12 13.22 15.99Current p-pendture 20.0 15.24 15.16 17.24 20.22Deficit (-) -11.14 -6.28 -4.04 -4.02 -4.23MA,.i-orandumf 'tem-s:

Defense and Security 11.87 7.97 8.16 8.06 9.18eve'lopuiLent _ 8.52 1.32 5.95 12.96 3.65

', a Including extra-budgetary spending (foreign aid).

The Nationalized Sector

91. The nationalized sector consists of seven companies and institu-tions organized under the Economic Organization for the Public Sector. Theyare the National Bank of Yemen, the National Company for Foreign Trade, theNational Company for Home Trade, the National Insurance and Re-InsuranceCompany, the National Shipping Company, the National Dockyard Company, andthe Yemen National Oil Company. The nationalized companies have been encoun-tering difficulties due to the shortage of skilled administrators in PDRY.Nevertheless, considerable progi-ess has been made in overcoming these diffi-culties, and the nationalized companies have been operating on a profitablebasis and paying the corporate taxes as if they were still private. Grossprofits of nationalized companies in 1971/72 were a little over YD 1.6 mil-lion or nearly 30 percent higher than that of the previous year. The bulkof their profit came from trading and petroleum distribution activities (seeTable 5.4). The Economic Organization, however, projected a decline in thetotal revenue of the nationalized companies for 1972/73 particularly from theabove two major profit making companies as well as from the National ShippingCompany.

Monetary and Banking Development

92. Since Indepencence, there have been several institutional develop-ments in the monetary sector. In November, 1969, all commercial banks (onelocal and seven foreign) were nationalized and merged into one bank calledthe National Bank of Yemen (NBY), which as of April, 1970, became the onlycommercial banking institution in the country. At present, the NBY has sevenbranches in the First Governorate (Aden) and seven others in the capitals ofthe other Governorates. The Bank's plans are to establish several branchesin the rural areas. The NBY is presently encountering staffing difficulties,both at the junior and senior levels. No development banks exist in PDRY.In 1970, however, the NBY established agricultural and industrial creditdepartments, with the purpose of providing medium and long-term credit tothese sectors.

- 24 -

93. Information on credit made available by the NBY for the periodDecember, 1969 through September, 1972, are set out in Table 6.5. The Tableshows that over the period the NBY's total advances remained much the sameat about YD 9 million. In 1972, about 55 percent of the advances were owedby the "private sector", which includes the nationalized companies, followedby the public sector which received nearly 41 percent. According to purpose,the Table shows that commerce claimed almost all the advances (95 percent),followed by agriculture; a noteworthy development, however, is the sharpgrowth in advances to agriculture.

94. Deposits held by the NBY over the months June 1970 through June 1972remained almost the same, recording a monthly average of about YD 16 million.(Table 6.6). There was, however, a change in their composition. There wasa decline in demand deposits which was absorbed by fixed denosits. No notice-able change in amount of saving, current, and other unclassified deposits wasrecorded. About 50 percent of the deposits were private;. 25 nercent weresemi-government and the rest were those of ;the Economic Organization, thegovernment and the cooperatives (see Table 6.7). Again no visible growthwas recorded in any category except those of the cooperatives, mainly agri-cultural.

95. Until 1968, the role of the Currency Authority in monetary manage-ment was passive, confined to the issuance of currency. In 1968, the func-tions of the Authority were broadened to include managing external reservesand promoting monetary stability through supervising commercial banks, andthrough selling, discounting, and rediscounting bi11s of exchange, promi.s-sory notes, and short-term Treasury bills. Further central banking functionswere given to the Authority in July, 1971, which made it the guarantor ofGovernment borrowing from local and foreign organizations. After July 1972,the name of the Authority was chanaed to the Bank of Yemen.

Recent Monetary Developments

96. Monetary develowinents in PDRY have been mmainly influenced by 'actorsthat, to a considerable degree, have been beyond immediate control of themonetary authorities, viz. the changes in net foreign assets and in claimson Government. E'rior to 1970, the deficit in the balance of payments and theresulting decline in net forei4gn assets ha.d a stror.g contractLonary impact onmoney supply. Money supply was declining in both 1968 and 1969, although,already in 1969, the Government began drawing rather heavily on bank creditsto finance the budgetary deficit.

97. However, the decline in net foreign assets did not continue after19691, m-uinlly beca-use ol th'le allocation, in 1i97y0 ana 197I, of SDK!S to PDRY,and claims on Government arising from budgetary deficits caused, from 1970 on,m,orey supply to expand rapidly. At the enu of 1971, money supply was 7 per-cent over its end-1967 level.

- 2i -

Prices

98. It appears that major domestic price rises arising from excess demandhiave been largely prevented by drawing down foreign reserves, and since late1970, by more rapid price control measures. Thus, domestic price increasesoriginated largely from higher- international prices of imported goods, therise in freight rates and, to some extent, from the introduction of importduties in 1970.

99. During 1969-71, prices in Aden 1/ rose on average by 8.2 percentver year at the wholesale level and by 5.2 percent at the retail level, withprice rises affecting predominantly imported goods. The impact of increasedinternational prices of imported goods on consumer prices, however, was partlyabsorbed by the two State trading companies and also mitigated by stricterprice controls. Furthermore, the State trading companies shifted in essentialproducts towards importation of less expensive goods from China and othersocialist countries (e.g. Chinese rice is one-third the price of a similarquality of Pakistani rice and Chinese tea is 40 percent the price of Ceylonesetea of a similar quality).

100. Price control measures on consumer goods were increasingly expanded,and by 1972, 50 essential consumer goods became subject to price control. Theprices established were supposed to leave a profit margin of 10 percent to whole-salers, and 5-6 percent to retailers. In 1972, there was also more concentrationon imports of less expensive consumer goods. As a result, the rise of consumerprices during 1972 appears to have slowed down, mitigating to some extent theadverse effects of the harsh cuts in wages on lower income groups.

VI. EXTERNAL TRANSACTIONS

Exports

101. The main feature of PDRY's foreign trade is the concentration ofexports in re-exports and transit trade, stemming from the position of Adenas an entrepot. Re-exports consist mostly of foodstuffs, textiles, hidesand skins, consumer durables and investment goods. The BP refinery andbunkering activities in the port explain the prominence of the npetroletImproducts in the exports, amounting to nearly 80 percent of the export valuein the years 1968-71. IndiRenous exports are meaeer; accounting for about6 percent of the value of exports and re-exports for the same period, con-sisting mostly of cotton. hides and skins and dried fish. Fluctuations invalue of indigenous exports is mainly caused by fluctuations in output, par-ticularly that of cotton. The severe drop in refinery output and -in the

1/ Based on the Consumer and Wholesale Price Indices for Aden, elaboratedby the Central Statistical Office in 1969.

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bunkering activities in 1967 and 1968 resulted in a sharp decline in bothexports and re-exports. However, they recovered in 1969, rising by nearly30 percent over their previous year's level. This rise was partly the re-sult of the increase in the output of the refinery. This recovery was short-lived, and in 1971, exports and re-exports recorded a drop of nearly 28 per-cent, caused largely by the decline in the refinery's operations. Indigenousexports rose to an unprecedented level in 1970, despite the decline in cottonexports. This was the result of an increase in exports of major non-cottoncommodities namely dried fish, hides and skins, and cotton seeds. The con-tinuous decline in cotton exports, coupled with a drop in cotton seed exportsresulted in a decline in indigenous exports in 1971.

Imports

102. Until the introduction of a general tariff on December 8, 1970,Aden had been a free port for most imports with the exception of a few con-sumer commodities (alcoholic beverages, cigarettes, tobacco, aerated water,qat and motor fuels). However, in order to maintain the position of Adenas an entrepot, free zones not affected by the general tariff were createdon the same date.

103. Imports of petroleum products, accounting for 30 to 40 percent oftotal import value, are strongly affected by the output of the refinery.Following the level of the refinery's output, the value of petroleum importsremained virtually constant in 1969 and 1970; and dropped to an unprecedentedlevel in 1971, nearly 24 percent below its 1970 level. Non-petroleum importshave been determined by the level of re-exports and domestic demand. Food-stuffs, which accounted for 25-30 percent of the value of the non-petroleumimports, dropped by about 40 percent as a result of the growing use by theYemen Arab Republic of its own ports for imports. The same reason explainsthe continuous decline in imports of textiles and consumer durables since1969.

104. Retained imports, which follow domestic economic conditions, re-corded in 1970 their highest level since 1966 (see Table 3.6). That wasrelated to the increase in imports of foodstuffs by the State trading com-panies for building up their stocks. Due to the building up of stocks, re-tained imports in 1971 dropped to their average annual level of the years1967-69.

Direction of Trade

105. The major suppliers of crude oil are Iran, Kuwait, the United ArabEmirates and Qatar. The mninr imnorters of nptrnleiim prndurtsq are the

UK, Japan, Thailand, Australia, South Africa, Italy and Egypt. As regardsnon-oil trade, the major suppliers are Japann KY, CMEA rnintris, the PPnnple'sRepublic of China, India and Hong Kong. The main importers of indigenous ex-ports and non-oil re-exports are the Yemen Arab Republic, Tapan, Somalia,India, Sri Lanka and Ethiopia. There were no visible changes in the direc-tion of PDRY trade with the exception of a gradual decline 4n the share ofthe UK which was taken by the People's Republic of China and CMEA countries.

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Balance of Payments

106. The balance of payments does not provide a complete picture of therelations between the economy of PDRY and the rest of the world. The coun-try's 1,200 km. long coastline to the South and the loosely guarded, and incertain regions undefined, boundary to the North and Northeast enable a por-tion of merchandise trade, as well as invisibles to escape recording; however,balance of payments data were adjusted to account, as much as possible; forthese (see Table 3.2).

107. Prior to 1967, PDRY's balance of payments was characterized bylarge deficits which were offset by British budgetary grants as well asreceipts from services rendered at the port of Aden and at the Britishmilitary base. The stoppage of British budgetary sunport and the withdrawalof British troops following political Independence in 1967 put the balance ofpayments under severe pressure, mitigated mainly by a substantial increase intransfers from Yemenis working abroad, the establishment of small-scale im-port substitution industries and by the newly introdtuced import control meas-ures. The balance of payment pressures resulted in the loss of reserves in1968, 1969, and 1970; offset in the latter year by a receipt of SDR's. Thebalance of payments showed considerable improvement in 1971, recording thehighest increase in reserves sinre 1967? Although receipts from privatetransfers and traditional non-petroleum exports and entrepot declined, theywere more than offset by a sharn decline in the outflow of profits by theoil company, a rise in capital inflow from bilateral sources, and finallyby stringent restrictions on -lmnorts introduced by the Government.

Summa>ry of Balance of Payrments, 1967-72

(In million of Yemeni dinars)

1967 1968 1969 1970 1971

Exports (non-oil) 14.6 19.1 22.2 19.6 13.1Imports (non-oil) 45.1 52.5 51.7 53,1 42.7Trade Balance (non-oil) -30.1 -33.4 -29.5 -33.5 -29.6Oil (net) 12.8 9.5 13.5 15.2 7.0Services (net) 8.4 -5.0 -8.3 -6.7 3.0Transfers (net) 20.1 20.9 22.7 21.7 18.6Balance on Current Account 10.8 -8.0 -1.6 -3.3 -1.0Changes in Reserves

(- increase) 1.6 2.9 2.4 -0.1 -1.6

Foreign Reserves

108. Virtually all official reserves are held by the Bank of Yemen.Government foreign assets, which were substantial prior to 1968, have beendepleted in financing budgetary deficits; they dropped from YD 4.6 millionin 1967 to YD -0.1 million in 1971 (see Table 3.9). The total foreign assets

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of the banking system witnessed small but steady decline from 1966 to 1970.They recorded a modest rise in 1971. In Mfarch, 1972, their level was nearly

YD 28.4 million or equivalent to ten mont:hs of retained imports.

External Assistance

109. As domestic resources are extremely limited, most public investmentis beine financed by foreign assistance, particularly from the EasternEuronean countries and the People's Republic of China. In the agriculturalsector; the Kuwait Fund is financing a proiect to increase production, espe-cially of cotton, in the Abyan Delta. The Fund's consultants just completed(in December- 1972) field work for a socio-economic survey of PDRY. The! USSRhas financed some irrigation works (weirs) in the Wadi Tuban, Shala and Ahwarareas ITDA nrovided (in Anril- 1973) a $3.5 million credit for an export-

oriented fisheries project. Oil explorations with the collaboration of theAlgerian Company; SONATRACH; are underway. In the transport sector, thePeople's Republic of China has commenced construction of the Am Ayn-Mukallaroad, and IDA nriAoV;d S116 million in Anril 1971 and S560,000 in November.

1972 for engineering studies and technical assistance for roads.

110. External debt data given to the mission showed that by September 30,1972, total loans and lines of eredit nledged to PDRY were a little over YD

58 million (approximately US$153 million). Of these nearly YD 20 million(US$52 mill4on) had been allncantped to nrnioets; but only YD 9.4 million(US$24 million) were reported disbursed. 1/ Most of the disbursed amount (76

percent) wsrovidAed irn the fo-rm of crapit7a1 annds renuired by snecifie nroi-ects; about 14 percent was provided in the form of consumer goods; and the

rest (10 percer.t) was an pedi in t-hp form Of cash. Since foreign aid hasbeen mostly at concessional terms, service on outstanding debt is relativelymoeArnto SeruirP nepments on outstanding npiblir debt as of Septemher 30,

1972 were estimated to amount to about $2 million in 1973, equivalent toapproximately 5 percent of exports of … gods and non-factor servic in 1Q71.

VII. PROSPECTS FOR ECONOMIC DEVELOPMENT

111. with' rio realistic prospectls for Ae orgi t omrip:acI - I * g WLI [1 L_±~JL JLJpLL LLJ A .L 4 AA .......as a bunkering, trading and servicing center, PDRY has no choice but to use

her naturai resources to expan'u tl1 coIIUdIUUt Ly-prUucings ctvor gi s. sul

ture, including the fisheries sub-sector, offers promising opportunities forsubstantially increased production, which should lead over timUe to a risin.gabsorption of existing excess manpower, to a reduction of the country's im-port dependence, particularly on food, and to excportL suLpluses.

1/ This fieure does not include the value of certain machines and equipmentgiven by Arab and Socialist countries.

IL7

112. A significant expansion of the commodity-producing sectors can,however, be acheved only by gradually replacing traditional productionpractices through more modern techniques, combined with basic investmentsin roads, transport, storage and processing facilities. Access to powerand water and to educational and training facilities are important addi-tional preconiditions. The development process will inevitably be slow anddifficult,- especially in view of the serious shortage of qualified adminis-trative, managerial and technical manpower in PDRY and the inadequacy ofdomestic savings. Under these circumstances foreign technical and financialassistance is virtually the only immediately available vehicle for startingoff economic progress and development.

113. In the short run, there are a number of rather quick-yielding op-portunities in those areas which have already access to the main consumingcenters of Aden and to overseas markets. The development of fisheries andagriculture in the Second and Third Governorates are examples. Other areaswould be opened for further development once the road projects, now beingexecuted, are completed. This is particularly important for the Fourth andFifth Governorates and, especially, for the potentially rich Wadi Hadhramaut.Development of these more remote areas is also important for achieving abetter political and economic integration in PDRY.

STATISTICAL APPENDIX

Table No.

1.1 Area and Population, 1972

2.1 The Three-Year Development Plan 1971/72-1973/74

3.1 Balance of Payments3.2 Balance of Payments, Technical Notes on the Adjustnent of

Customs Figures for Re-exports and Imports3.3 Sumnary of Foreign Trade3.L Composition of Exports and Re-exports3.5 Composition of Imports3.6 Retained Imports of Non-Petroleum Goods3.7 Direction of Exports3.8 Origin of Imports3.9 Foreign Assets

5.1 Statement of Government Budgetary Operations5.2 Government Revenues5.3 Governrment Expenditure5h)j Summary of Finances of the Nationalized Sector

6I Monnetary survpvb.2 Monetary Supply and Factors Affecting Changes in Money Supply6.3 Balance Sh.eet of Culrrency Aut.hority6.L Consolidated Balance Sheet of the National Bank of Yemen6.5 Dnmestic Credits by the National BPn:n of Yemen6.6 Composition of Deposits held by the National Bank of Yemen6.7 Deposits heldA Iby +the Nationanl nof Yemen by Sectors

7'1 Trrii-w,+A Arnoc in PnT?V ICQAO/7fl

7.2 Estimated Agricultural Production7.> Est..ated Fshk Tand-ings by Species7Rt4 Po4-nrn-4-aA r-Ai-. Tor c 1T C cJ - LA Ajr.a7

8. PrIoducti4on of.4 4-1-e AA.4-- -4- -1Q9E '7-1u . I u u i~ I Vll L .J1 WL & LLA I L-LG A-I LC I y i DJ_ _ E

8.2 Petroleum Refining Industry8.3~~. LoalCshulasofte Ade- Ref-ineryU .2 .uuu~oalJ uaoi IILL u±aCj 0 UJI. blIb nuc ILJ.L ..LIC

8. 4 Industrial ProductionF1 et 4A-....-4-.. .4 _ A 4 A_ d len ._ 4-

.9 v JrLU± D ! VU aby aL flLIO. I Au L r8.6 Yemen Ports Corporation Revenuies and ExpendituresU *7 Act ivitleof IAUthI International Q L/J I 7 -1

Table No.

in I onsu m.er an.d Wholesale P-Qice T-.A- of Adr

10.1i PublicSchools, Iro11ments and Pticipation Rates10.2 Number of Students in Higher Education Abroad

(Tep--u-- I968/69 -1970/71)10.3 ~ VL4~ PR J.S/ Abr-o/ b- S.L/b I ' b/ I -L./

10.3 PDRY Students Studying Abroad by Subject, 1971/72

, -. .~~A D.-i.+4rw 1 079TaDiLe 1.1 49P-ULU,

Governorate Area in Pop-ulatio.n De. sity'000 sq.km in iooo per sq.km

First 4 3U1 I .

Second 10 211 21

Third 16 286 18

Fourth 52 166 3

Fifth 121 452

Sixth 87 90 1

290 1,5o6 5

So-. rcrP Missqio-n ontimAtes based on informations gatheredat various PDRY authorities. Data are roughapprn-vi mA+Ann nlv.

1/ All PDRY islands belong to the First Governorate

Table 2.1: The Three-Year Developmenlt Plan 1971/72 - 1977L

- iTn Yt mil'Lion -

Sectoral Distributionof Investment Sources of Financing

For eigrnRest of the Private LoaEns &

Governmient Public Sector Sector Grants T'otal

Amount sbarej %)

Industriy 9.72 24.1 3.89 1.34 2.51 1.98 9.72AgriLculture & Fisheries 10.51 26.1 6.83 O.,68/ 0.12 2.88 10. 51Transpoirt & Communications 12.76 31.7 3.52 0,C25 - 8.99 12.7(,6Geological Research 2.59 6.4 0.86 14.05 - 0.68 2.C59Municipal Services 1.25 3.1 1.25 .1.$5

Education 1.67 4.1 1.20 *- _ C.47 1.67Other Services 1.80 4.5 0.99 _ 0.81 1.80

Total Plan TOutlays 4O.30Y 100.0 18.5)4Ž/ 1.32 2.63 1.81 40i3of wh:ich

duriLng: 46.C 8.2 6.5 39.3 100.OCI1971/72 13- % %g % % %

197:L/7 2 13*53i 5.'77 1.29 0.70 5.7619 72/73 15.8 6.81 .18 .8o 6.01197 3/7h 10 .97 / 5.96 o.85 0.13 4.04

Sources: Cenitra:l Planning Commission

J/ Exccluding YD 3.0 mnilllon granted by the People's RepuLblic of China for a spLining and weaving factory.Fhirther details regarding this project are not krnown, but' it is expected that investment go beyondthe period of the present Plan.

?Ž' Includes YD 2.65 to be obtained in kind from foreign sources under existing bilateral agraements,excluding the agreement with the People's Republic of' China.

2/ From Agricultural Development Funid.

ly Planned outlayrs for 1971V72 have been reduced at the end of 1971 to YD 9.49 million and the difference('m 3.6 million) Jhas been moved into 1972/73 and 1973/74. Total Plan out:Lays remained unchanged.

Table 3.1 Balance of Pavments

(In m'illinnq of YemAeni dinars)

1967 1968 1969 2z70 1971

Exorts and re-exports <-.5 56.0 7 68.6a<ot 2. 39.2 51-.65- 33.3~

Petroleum products (39.9) (36.9) (48.3) (49.0) (29.2)Others (2.0) (2.3) (3.3) (4.2) (401)

Re-exports 12.6 16.8 18.9 15.4 8.2

Imnorts -72.2 -79.9 -86.5 -86.9 -67.5Petrolm products -27.1 -27. - 33 8 -25.7Others- -hq1 -5.5 -51.7 -53.1 -h1.8

Trade balance -17.7 -2R 9 -16.0 -18A. -26.0

SprvinpeA (net) f..0 -8.1 -6.7 'AShipping, aviation and insurance 0.7 0.2 0.4.Tnterest, nrnfitq and div-idends -10=6 -5=7 -9=2 -93 -1=9

Trading companies and banks (0.3) (1.5) (2.0) (2-3) (1.4)Petrolelm cem.nanies (-10.9) (-7.2) (-11.2) (-11F-) (-3.3)

Other servicesY2 5.9 0.1 -0.1 0.7 -0.6r1nemanent ,n. e n .W 1J9 n J, n0. 1 1.9

Goods and services (n+et) -A 2R . 9 1A _O n -3.

T-ans4'ers 201 n 0 1 217 O137 I8.az .7 .''7 'V 7

Private 22.2 21.7bi / 4 6.6 0.5. -= J.4

Goods, services and transfers 10.8 -8.0 -1.6 -3-3 :4i4

Net errors and omissions -12.6 4.7 -3.6 -4.9 2.0Nonrnonetary capital 0.2 0.4 2.8 6.8 1.0

Of f i ninl 0 JJ =9-_ A -A -

Foreign loans (2.2) (5-1) 1.0)Central govArnment invetAMnntqQ' (0.2) (O.h) (0.6) (-0.1) (__)

Claims on nationalized banks (--) (--) (-) (1.8)RP iVq t. q n=a= n = n a n a. n ai

Allocation of SDRs -- -- -- .5 1.3

Monetary movements (increase -) 1.6 2.9 2.4 -0.1 0.1SDRs -- -- -1.5 -1.3Currency Authority assets Qet)- -2.4 -2.1 0.3 0.1 1.3Government foreign assets Z( -1.3 3.2 1.4 -0.1 0.1Commercial banks' foreign

assets (net) 3.9 -0.8 0.7 1.4 __Other 10/ 1.4 2.6

For footnotes see next page

Footnotes to Table 3.1

S!our ces: Cs +Cetral St-atistic+al nfflce ar.d +the Nati+oal Barb of Yeme

j Customs figures for re-exports were adjustedoI / r + fs > ^ T.TCV'D nA -w Cc+c: Q hl X ) 2LJ L4dJ V Us LomZrLL 4 ..5LL .A~4. 4.ILJA. -blL .2 s

Debit entries cover tourism expenditures abroad by PDR of Yemen nationalsan,"' payments 1for mi scell'a1neco,,s Ser,nices (su,ch -. a tnose r-ndr e .. 4-by ,

Wireless and Cable Co.). Credit entries cover current operations of theCrenc-y- Authorlt, activ-ties P Aden DPrt Trust, orions -ofae4-,-t

supplying foodstuffs to the Y.A.R. against remittances by Y.A.R. nationalsresidig aluroalu ardlu receiLpts fLo outIri. IVIGUcesO

/ Covers expenditures of foreign embassies and UN agencies in the P.D.R. ofierrien rLeut of exmpenditures o0f P.D.R. 0f 1e,Len emLI bassies abroad. Tne figurefor 1967 mainly consists of local expenditures of the British base.' Mainly rilt,lsh grantb ln s--pptU±- of heL budgetf ii lr o 1 ar-lu I YO.

y Includes changes in long-term assets held by the Government.7/ Private capital movements are reflected in ';net errors and

omissions"./ 2XcLUI.llg SvRsLb.

/ Includes Trust Fund and deposits held with Crown agents.i10/ Share of East African Currency Board assets on account of currency

redeemed.

Table 3.2 Balance of Payments

Technical Notes on the Adjustment of Customs Figuresfor Pw . o-+s and Tm-r+.s

(ITn r-411ior9s 0of Va-M.en Ma-Qt)

1967 1968 1969 1970 1971

Note 1 Adjustment of re-export figuresCustoms figures: exports and re-exports 10.5 8.9 '1.3 11.7 10.5Less: indigenous exports 2.0 444.2

Unadjusted re-exports '/ 00. -0 ou 7-. U.4

Unrecorded exports to the ;#A.R.- 0.7 4.9 4.9 4.6 1.1Unrecorded exports by sea -' 3.2 2.7 3.4 1.2 0.4Unrecorded Tourist purchases aq4

adjustment of official value.- -0Re-exports adjusted for coverage 12.14 13.3 b.2

Adjustment for the undervaluation ofre-exports t/ - 2.5 2.4 2.0 __

Nonmonetary gold exports 0.2 .1 0.2 0.1__

Adjusted re-exports used inBalance of Payments Table 12.6 16.8 18.9 15.4 8.2

Note 2 Adjustment of import figuresCustoms figures 45.1 57.1 56.2 50.0 39.2Unrecorded zovernment imnorts- ., -- 5.1 2.Adjustment for overvaluatig of importslZ -- -4.6 -4.5 -2.0Local in9uranGA on imnortS il -- -- -0.5

Adiusted impnrts used inBalance of Payments Table 45.1 52.5 51.7 53.1 41.8

1/ A oa+jA~nij~, hkr +i. C* v+w15+ i+3 n ff i -a. 5Shnarn 7-imn2 in iln-rA(ordwl

= jAs est;ma_ bj the Cen_O r4s… in -exports beginning in 1968 due to the fact that exports to the Yemen ArabRepublic via lanAd cesQed to be ?-^nnrdeA na of 1968.

2/ For 1967-69, 30 per cent of unadjusted re-exports and exports; for 1970, 10 percent.'A / Tr st -;a+ v 4" 1071 wan =+Js%aAe +.n hob Yn 11(MOO.. This irn bhArad rn thA

assumption that tourists purchases were equivalent to 10% of the value of importedgoods for t4- u...4 - . .h.edA4-,+..+ o 4f ofical avlug of YVT 168AnR rYpl*an.sn.t

the value of stocks in the free zone in December 1971 which is included as;mports and -rotA 4- -ar" 1972,1~i butv lnff .o 4,n 1iiA= 4" _n, th al^-san .NJk.~I.V N.Q CUi'.A V ~ '.. .55.v.J JJ ...JIC, L0-J~ *l~J ~ ~ '

exports data according to the special trade system.1.TIt was A *44..a,4 t..s wer d r 10A 1 JO .,el '1070 byr

15 percent (of exports plus re-exports adjusted for coverage) as a result of4- i 1... 4-444~...4.A 4, io0JA ,A,4A,h ,..n4red -zomnevas'i cr ofL excjheange contorol regulations 'siu d4 98.c erdsne

of all export proceeds.21 iM Von peruoleium gouuvus uILL, y.6J The bulk of equipment and supplies received under bilateral agreemnts for

development projLets are notiB. reflected ims ±Iu. ri.uL±S .17

1971 are as estimated by the Currency Authority.17' imports of mercnandise other than petroleum were believed to b'e overvalued by import

with a view to circumventing exchange control regulations as a means of capital

7/ Cont. transfer. It was estimated that the extent of the required downwardadjusti-,.en.t- was 8i percent in each of i1968, 19-69 a8d 4 percent in 19-r7.

§/ Imports, which were an a c.i.f. basis prior to 1971, became an a c. & f. basia, in.su-ranc a i*s z.aireu uto iM pirsurd5 frum hno 'Lati(aal Inmwanoe and ReinsuranceCompany, the cnly insurance company operating in the P.D.R. of Yemen.

Table 3 . 3 Summary of Foreign Trade

(In millions of Yemeni dinars)

1966 1967 1968 1969 1970 1971

Exnports and Re-exports A 68. 50f.6 45.9 59 8 6n . 39.7

Petroleum Products 30.9 31.4 34.2 44.5 45, 0 25.9Ships' Bunkering 22.4 8.5 2.7 3.8 4.0 3.3General Merchandise 1/.7 10 8.9 110.3 11.7 10 r.~~~L,tLa, 1L.stt.n,a,,.L.&a~~~~ £. IL J. J IL.L. f L.A. I v ,

of which: re-exports (12.1) (8.5) (6.6) (8-0) (7.5) (6.4)Bullion and specie A0. A .I A.1 0.2 0).1-

n '7 L~U. U.C I .! /I

_L__pL_L 101.. 72. '.+ 1.0 04.

Petroleum Products 39.5 27.1 27.4 54.8 53.8 25.7of which: crude oil (33.0) (25.1) (24.7) (33.3) (33.2) (24.0)

General Merchandise 62.4 45.1 57.1 56.2 50.0 39.2

Trade Balance -55.5 -21.6 -58.6 -31.2 -25.0 -25.2

S^inrce Cenrral Rratitfir- Offirp AdiPn; and Tahlte 34i and 3 '51' Excluding exports and re-exports by land except export of free zone by land.

Table 3.4 Composition of Exports and Re-Exports

(In thousands of YD)

1966 1967 1968 1969 1970 1971-

1. Exports 2,574 2,043 2,0 3,570 4,303 4,100

Dried fish 455 332 381 236 539 718Hides and skins 727 392 418 261 439 499Cottonseed 169 25 177 25 389 90Raw cotton 1,093 1,183 1,195 2,140 1,751 1,499Salt 130 111 15 136 141 220Other ___--- - -- 772 1,044 1,074

Re-exports 12,098 8,509 6,618 7,995 7,481 6.400

Foodstuffs. beveragesand tobacco 5,693 2,743 2,577 2,492 2,319 1,332Rice 617 577 370 558 497 140Wheat and wheat flour 349 236 150 234 401 6Sugar 238 136 111 184 82 6Coffee 936 571 509 286 156 209Tea 161 192 128 170 79 21Tobacco 519 362 759 210 34 26Other,. 873 669 570 850 1,070 924

Hides and skins 823 519 729 1,096 791 380Textiles 1,272 764 692 1,273 1,67 2,Consumer durables 674 184 102 53 34Automobiles 519 691 140 56 18 6Other3 155 169 44 46 35 28

Ships stores4 150 63 21 149 192 120Investment goods5 387 246 170 54 36 49Other 5:099 3L314 2,245 2,829 2,483 3,139

Total (1+-) 14,672 10,552 8,924 11,563 11,784 10,500

Petroleum products 53,245 39,911 36,857 48,227 48,995 29,200

Ships bunker fuel oil 22,555 8,515 2,673 3,768 4,011 3,273Exports 30,890 31,396 34,184 44,459 44,984 2

Total (1+2+3) 67,917 50,463 45,781 59,792 60,779 39,700

Source: Central Statistical Office , Aden

Preliminary.Includes other foodstuffs, livestock, dried fish, beverages and otheragricultural produce.Includes sewing machines, cameras, watches, and radios.

4 Goods sold to ships calling on Aden, mainly foodstuffs,5' Includes cement, iron and steel, trucks and buses and construction and industrial

machinery.

Table 3.5 Composition of Imports

(In thousand of Yemeni dinars)

1986( 1967 1968 1969 1970 1971

P...st;:rt. beverages

.Aric"iltural products 14,998 13,666 15,795 14,937 15,331 10ji15

Sheep and goats 1,139 1,056 1,137 1,181 1,423 1,160Rice 1,491 2,946 2,134 3,687 2,940 1,138Wheat flour 1,705 1,517 1,534 1,452 2,137 1.022Sugar 1,133 960 2,048 1,445 1,544 1,576Coffee 843 403 412 286 156 209Tea 939 1,156 1,155 1,308 1,090 658Qat 1,262 1;139 1,383 1;292 1;259 918QTobacco 1,860 1,291 2,633 1,220 1,264 1,000Hides and Skins 834 511 724 1,096 791 *80Oilseels 749 610 600 618 338 275Otherl 3 043 2,077 2,035 1,352 2,389 2,079

Textiles 9 77 6,8,4 9,596 ~10,140 7,048 5,878

C .m1suLne r curables 4,456 1,810 1,A6 1,685 1,159 915

Au r o-. .il 1,653 477 , 750f 41.7 A45z4A

O t her- 2,803 1,533 1,055 935 742 461

Investment goods 11,240 2,488 3,599 4,087 3,296 2,992

Trucks and Buses 653 398 496 311 303 251Machin ry and appliances 9,592 1,451 2,437 3,040 2,203 2,020Other3 995 639 666 736 790 721

Other Manufacturers 25,676 20,261 26,236 25,344 23,195 19,000

Total 62,408 45,059 57,092 56,193 50,029 39,200

Petroleum Products 39,519 27,099 27,357 34,842 33,809 25,724

Crude Oil 33,030 25,074 24,669 33,324 33,239 24,029Oil Products 6,489 2,025 2,688 1,518 570 1,695

GRAND TOTAI 10l1927 72A158 84,449 91,03 8' RH 3 64j924

Source: Central Statistical Office, Aden1/ Includes dried fish, pulses, wheat, beverages, gums and resins.2 Includes sewing machines, radios, cameras and watches, washing machines, refrigerators,T. V. sets, electro-mechanical appliances, space heating equipment and electric fans.7 Includes cement, iron and steel.

Table 3.6

RAt.ined TmnlnotR of Non -PatrolnQum oGoti.A

(in millions of Yemen' s dinars)

1966 1967 1968 1969 1970 1971

A dut.o t T ---- 4iAA. s. .. =1 .6 7.. -5 3. 2.

Adjusted Imports of Non-re: ¢ - -1 ---r ui - £ U uc. I en r' e I.7 r' -. 1 41.0

¶ - jf~~~~ 4 ~~~ £ tL 0 jO~~~~ f 4~ r %Less Adjusted uRe-exports 2.1 1. 16.8 1.o

Adjusted estimates of RetainedImports of Non-petroleum Goods 5o.3 32.5 35.7 32.8 37.7 33.6

1/ See Table 3.3

Z/ See Table 3.2

Table 3.7 Direction of Exports

(In millions of Yemeni diinar)

19 65 _ 1966 1967 1968 19)69 1970 1971Per Per Per Per Per Per Per

Value Cent Value Cent Value Cent Vaslue Cent Value Cient Value Cent Value Cent

Australia 1L.9 3(. 3.1 4.6 2.9 5.7 3.0 6.6 4.2 7.0 3-7 6.1 4.0 10.1Belgium 0.1 0.2 0.2 0.3 2.8 5.6 0.1 0.2 0.1 0.2 0.6b 1.0 India o.)6 0.9 0.2 0.3 o.6 1.2 0.53 0.7 0.7 12 0 .6 1.0 01.7 1.8Italy 1.4 2.2 1.3 1.9 0.9 1.8 1.0 2.2 1.0 1.7 1.0 1.6 0.8 2.0Japan 5.6 5. 6 2.7 4.0 3-8 7.5 5.7 12.4 6.3 10.6 8.7 14.5 3-3 9.6Somalia and French

Somaliland 5.4 5.5 3.2 4.7 1.9 3.8 2.0 4.4 3.4 5,7 3.5 5.7 5 5.8Sudan ..- _ _ _ 0.4 0. 9 0.4 07 O.L 0.2 0.1 0.3South Africa 2.7 4.2 4.1 6.0 3.6 7.1 4.3 9.4 2.1 3.5 3.'4 5.6 4.3 10.8Thailand --- -- --- --- --- _ - 4.0 6.7 5.2 8.5 2 7.1Egypt, Arab Republic of 0.2 0.5 0.4 o.6 1.9 3.8 1.4 3.() 1.7 2.8 --- --- ---United Kingdom 14.1 21.93 15.2 22.4 7.9 15.6 5.7 12.5 1.3.1 21.9 14.93 24.4 5.1 12.8Yemen Arab Republic 4.6 7.1 4.0 5.9 2.6 5.1 5.0 6.6 3.0 5.0 2.9. 4.6 4.5 11.3CMEA countries arndmainland China 0.1 0.2 --- - ° 1.5

Ships bunkering 20.5 31.5 22.4 52.9 8.5 16.8 2.7 59 5 .8 6.4 4.0 6.6 3.2 8.1Other 1L.6 18.0 11.2 16.5 a.0 35-7 16.2 L5.4 15.9 26.6 12.4 203.3 75 18.8

Total 64.5 ]LOO.() 68.0 100.0 50.5 100.0 45.85 100.0 59.7 100 61.0) 100.0 39.7 100.0

Source: Central Sta.tist:ical Ofl.ice, Aden.

Table 3.8 Origin of Imports

(In millions of Yemeni diners)

l965 i966 19f7 1968 1969 _ 19'70 1971Per Per Per P'er Per Per Per

Value Cent Value Cent Value Cent Value Cent Value Cent Value Cent Value Cent

Australia 3.5 3.1 3.9 3.8 2.7 3.7 2.2 2.6 1.,6 1.8 2.3 2.8 1.0 1.5Hong Kong 2.1 2.0 2.2 2.2 1.8 2.5 2.8 353 2.5 2.8 2.2 2.6 2.0 I.1India 4.5 4.2 3.9 3.8 3.8 5.2 4.1 4.9 4.3 4.7 3.5 4.2 2.3 5.6Iran 17.93 116.7 12.8 12.6 8.8 12.2 11.0C 153.0 13,5 L4.8 15.0 17.9 8.2 12>.6Iraq 2.0 1.9 2.1 2.0 1.6 2.2 0.5 0.4 1.9 2.1 ,2.3 2.7 6.3 9 .7Italy 2.5 2.3 2.2 2.2 1.2 1.6 1.6 1.9 1,4 1.5 1,1. 1.3 0.9 1.4Japan 12.0 11.1 11.8 11.6 9.5 13.2 11.8 14.0 11.9 13.1 8.8 10.5 7.1 1CI.9Kuwait 11.8 11.0 11.6 11.4 11.5 15.9 12.5 14.8 12.5 1L.5 11.1 13.3 7.8 112.0Netherlands 2.f, 2.4 2.7 2.7 2.3 3.2 2.1 2.5 2.,0 2.2 2.5 3.0 1.7 2.6Qatar 3-5 353 2.1 2.0 0.4 0.5 - -- 1.4 1.5 0.5 0.6 1.5 2. 3Somalia 1/ 1.9 1.7 1.7 1.7 1.4 2.0 1.8 2.1 2.2 2.4 ;2.4 2.9 1.3 2.0United Arab Emirates - 4.3 4.0 6.8 6.7 2.8 4.0 2.5 3.0 5.,9 6.5 4.6 s.5 1.1 1.7Egypt, Arab Republic of 0.7 10.7 0.6 0.6 1.5 2.1 1.4 1.7 2,2 2.4 0D.3 0.4 0.6 0.9Germany, Fed. Rep. of 35.2 3.0 3.2 3.1 1.9 2.6 2.5 2.7 2.4 2.6 2.2 2.6 1.7 2).6United Kingdom 11.7 10.9 11.7 11.5 6.8 9.4 8.1 9.6 5.1 5.6 4.8 5.7 5.0 7'.7Yemen Arab Republic 2. 4 2.2 2.0 2.0 1.5 2.1 1.9 2.2 2.0 2.2 1.7 2.0 1.3 2.0CI1EA countries and

mainland China 3s3 5.1 2.7 2.7 2.3 3.2 4.3 5.0 4.3 4.7 4.5 5.4 4.1 6.5Other countries 17Sj 16-.5 17i9 17.6 10.4 14.4 13.8_ 1b 14.0 15.4 13 9 16.6 11.0 47.0

Total 1L07.4 100.0 101.9 100.0 72.2 100.0 84.5 l0C0.0 90.9 100.0 85.7 100.0 64.9 10CI.0

Source: Central Statistical Office, Aden1/ 'From 1969. includes impcorts frorn Bahraini and Oman.

Table 3.9 Fore:LgZIkssets

(In millions of Yemeni Dinar)

December March1965 1966 1967 1968 1969 1970 1971 1971 1972

Currency Authority 15.64 19.07 21.51 23.58 23-34 24.71 24.66 25.86 26.18

Comm,ercial Banks (net) 6.54 8.23 4.,32 5.15 4.41 1.21 3.01 1.41 2.21

Foreign assets (8.04) (9.47) (5.25) (8.69) (5.29) (1.71) (3.37) (2.69), (2.94)Foreign Liabilities (-1.50) (-1.24) (-0.93) (-3.54) (-0.88) (-0.50) (-0.36) (-1.28,) (-(.73)

E]ACB: Share of CurrencyRiedee,med 2.85 1.36 *- - -- -- -- -- --

G(overnment 2.96 3.24 4.56 1-38 -- 0.09 -0.05 -- --

Trust Fun,d (0.55) (1.26) (1.12) (1.21) (0.04) (0.02) (0.02) -- --otlher {22E 1 98) E 44) (O-70) (-0.04) _L.07i (-0.-7).

Total Foreign Assets (net) 27.99 31.90 30-39 30,11 27.75 26.01 27.62 27.27 2.539

Source: Bank of Yemen and the Ministry of Finance.

ABLI 1 5.1

Statement of Government Budgetary operations

kIn illliLons of' Yem,en.iLDi inaL2 rs)

Fiscal year endedMarch 31 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 1971/72

1 . Dms7 99 R 9674 8-94 l l 11.11 1 .22 15.99

D irpet taxes 1.99 1.93 1.90 2.03 2.97 2.60 3.96

Indirect taxes 2.80 2.66 2.29 3.10 3.89 5.19 7.57Other 3.64 -.94 3.55 2.65 3.33 4.71 3.55

Fifth Governorate 1.16 1.21 1.20 1.18 0.92 0.72 0.91

2. Expenditures 19.28 23.37 23.68 15.83 15.44 17.56 20.73

Current 14.46 19.16 18.48 13.51 14.67 16.32 18.30Capital and /development - 3.76 2.79 3.55 0.55 0.28 0.30 0.52

Fifth Governorate 1.06 1.43 1.65 1.77 0.49 0.94 1.91

3. Surplus or Deficit-9.69 -13.63 -14.74 -6.87 -4-33 -4.34 -4.74

4. External Financing 9.49 12.26 16.49 4.91 0.21 1.85 0.44

Foreign aidUnited Kingdom 9.49 12.26 16.49 1.97 -- -- --

Other -- -- 0.31 0.21 0.85 0.44

Settlement with EACB -- -- -- 2.63 -- -- --

5. Surplus or Deficit

requiring domesticI - /I. 1\ A I)1 7Z7 1 M7, I o,< I. 1'Aa' /.. 7flr

6. iDomantic F ingan g (0 1.0 in =. -2. 24 3.78 3.1 4.40

Chan-es in aovern-ment deposits, net(incrpasp -) -_ 0i42 -2.82 2.00 2.56 -. 07 4,35

Changes in govern-ment foreign assets(increase -) -- 0.58 0.40 0.54 1.22 o.o6 0.09

7. Discrepancy (5+46)e 0.20 0.37 -0.67 0.58 -0.34 0.64 0.10

Source: Ministry of Finance, Aden.1I Excludes development expenditures financed by foreign aid.2' Diast African furrency Boarde:/Discrepancy figure represents withdrawal to meet below line accounts.

Tabl! 5 .2 Gcvernment Rovenues(In thousands of Yemeni Dinars)

Actuals

i 9Z67= 19 '7_6 19C49 1969/7 0 T9=l ____ _ -

D:Lrect taxesi of which: 1,993 ,9'3 1. 95 2, 0 _.Taxes on income and profits 1, 99i 1,933 1, 95 1,998 2,587 2,523

Corporation ( - ) ( - ) ( - ) (996) (1,60)5) (1,395) (2,712)Individual ( _ ) ( _ ) ( _ ) (189) (169) (192) (203)Wages and Salaries ( - ) ( - ) ( - ) (813) (1,113) (956) (c47)

Cotton tax - - 33 83 79 (195)Indirec:c taxes of which : 2,655 _,292 5.100 3.894 5. 192 6 _ 9

Import duties 1,737' 1,5231, 1.,403 2,067 2,399 3,637 5,869Excise taxes 777' 816 657 713 8'50 870 872St:amp duty - - - - 217 249 405Other 285 316 232 320 426 436 42'i

Nontax Revenue of whieh: 3'641 x,941 '5551 2,645 3,550

Sale of, and other revenue fErom,government property 571 597 393 563 2'55 227 2e8

Cuirrency Authority profittransfers 263 550 250 77D 1,201 2,795 1,399Departmental revenues andmiscellaneous I/ 2,807 2,9'94 2,908 1,31:2 1,878 1,686 1,865

Fifth Governorate reveniues 1,164 1,214 1,200 1,179 921 723 910

TOTAL REVENUES L.597 9.;,jj 8,938 -8.2925 lI1,1 _1!225 15 986'

Source: Ministry of Finance, Aden

iJ Includes repayment of debts.

Table 5.3: Government Expenditure(In thousands of Yeen'i dinars)

- ~~~Actuals1965/66 1967g 7, l9is'69 196'70 15970!D'Yl 1971/72

BY organizational units 19 276 23,370 2 64 15.F25 15.439 17,551 DGeneral administratiLop -U 3': 2 Defense and security - 6,928 9,683 ll,-7'4 7,965 8,163 8,059 9,1'4Local townships 414 483 4- 297 335 383 58 9Public works and corrmunications 3,318 2,269 1.7 2 1,305 1.057 1,239 1,146Finance and economy 2,507 ,2,524 1,97'9 678 I,133 821 l,l XHealth 1,071 1,125 1,C107 798 767 928 1,013Education and national guidance 1,899 .2,367 2,l105 1,615 1,766 2,234 2,i615Agriculture 320 453 369 302 346 365 417Pensions 460 1,697 1,101 220 184 255 287Other 902 967 £c 650 808 1,534 T352Fifth Governorate 1,057 1,431 1,657 1,764 490 943 1,910-

By Ob1ectCurrenit 15 519 20 584 20 084 15 231861 17,241 20,215Wages and salaries 7,928 8,915 9,739 10,700Material1s, stuppli.es,and misicellamneousi 7,389 10,990 9,252 5,363 5,555 5,829 6.185Debt service 546 547 545 220 2C1, 730 6 620Fifth Governorate 1,057 :1,431 1,l0S3 1,727 4901- 943i 1,910

Capital and developcient 397 2.786 5,600 53 278 10 520Capital ofE which: 1,938 1,599 2,829 389 128 160

Central Government (1,938) (1,599)' (2,775) (551) (128) (150) (420)Fifth Governorate (--) (--) (54) (38) (--) (10) (--)

Development 1,819 :1,187 771 198 150 150 100

Total expenditures 19,2'76 23,370 23,684 15,825 15,439 17,551 20,735

Source: Ministry of Finance, Aden../ Includces Ministry of Interiorj/ Estimate and includes subsidy ofE 1,245 thousand dinars to the Fifth Governoratel The expenditures of t'he Fifth Governorate were lpartlyr met from appropriations in the National Budget;

hence. figuires for these two years are not strictly comparable vith those for 1967/68 and 1968/69.

TABLE 5.4:Sunmarv of Finances of the NationalLzed Sector

(In thousands of YD)

Actual 1970/71 - Actual 1971/72 Budget Estinates 1972/7'Revenue Revc nue Revenue

Fiscal year Minus i rus rninusended March 31 Revenue Expenditure Expend iture Revenue Expenditure Expenditure Revenue Expenditure Expenditure

National Bank of Y-emen 938 337 101 910 776 134 74a 24` 100

National Comnpany forForeign Trade 521 323 198 748 357 391 411 35 53

National Company forHlome Trade 523 427 96 7 90e/ 543/ 247 803 695 108

National insurance and ,Reinsurance Company - 156 63 93 2 665, 93/ 173 278 99 179

National Shipping Comparny 973 805 168 832~ 7542/ 78 649 782 *133

National Dockyard Company 363 282 81 374 272 102 324 3L2 12

Yemien National Oil Company 1,066 576 490 1,155 648 507 945 634 261

Economic Organization(Read Office) -79 72 7 74 102 -28 72 92 -20

Tot,al 4,619 5,385 1,234 5,149 3,545 1,604 4,230 3,6ro 560

Source: Economic Organization for the Public Sector.1/ Fiscal year for the National Insurance and ReiLnsurance Company is the sarnme as the calerndar year.2 Subject to audit.

TABLE IS.1

Monetary Survey('In mil lion 2

December March

1965 1966 1967 1968 1969 1970 1971 197 197F2

Foreign assets (net) 27.99 3j90 30.39 30.12 27.75 26.01 27.62 27.27 28.39

Banking System 22.18 27.30 25.83 28.74 27.76 2E.92 27.67 27.27 23.39

Currency Authority (15.64) (19.07)(21.51) (23.58) (23.34) (24 .71)(24.66) (25.36) (26.18)Commercial Banks (6.54) (8.23) (4.32) (5.15) (4.41) (1.21) (-3.01) (1.41) (2.21)

Government 2.96 3.24 4.56 1.38 - 0.09 *-0.05 -

EACB: Share of Currency Redeemed 2.85 1.356 - -

Claims on Government (net) -2.59 -3 0 42 -3.9Z -D 79 2, 5 5. 0 1.96 5,75

Claims 0.99 0.99 0.99 0.99 0.99 2.85 8.58 3.58 e8. i8Depositls -0.62 -1.,55 0.15 -3.58 -1.78 -0,.41 --3-33 -1.62 -2.43Foreign Exchange Holdings -2.96 -3.24 -4.56 -1.38 - -0,.09 0.05 -

Claims on Private Sector 10,26 ll. 10.55 10.2I 9.48 10.16 9.90 9.45 9,74Total Assets/Liabilities 356 39.65 7. 52 39.42 3" ,§52 42.82 Z_1 _____

Ioney 27.40 29. 94 25977 28.26 25.84 29,.02 11.4 29.46 s2.03

Ojrrency out:side banks 17.65 19.34 20.20 20.56 21.25 24. 45 25.89 24.o06 26.-Private demand depositi 9.75 10.60 95.57 7.70 5.59 4.57 5.85 5.30 S.0

'Quasi-Money 8.15 9.,9 6.35 5.44 6.45 9.12 8.18 8.79 °.Allocation of StiRs - - - - - 1.54 2.83 2.3,3 4.11Other Iteum (net) 0.11 0.32 1.40 2.72 3.15 -1.16 0.07 -2.40 -1.07

Source:' Bank of Yemen and the Ministry of Finaence.

TABLE 6.2

Money Supply and Factors AffectinR Changes i-i Money Suppv

(iIn mlllions _3)

December March

196a 1966 1967 1968 1969 1970 1971 1971 1972

Money Supp]y 27.40 29.94 29.77 2'8.26 26.84 29.02 31.74 29.46 32.08

iCurrency irn Circulation 17.65 19.34 2O0.20 2E0.56 21.25 24.45 25.E 9 24.16 26.68Priva:e Demand Depo its 9.75 10.60 9.57 7.70 5.59 4 .57 .65 5.30 5. 40

Quasi-Money 8.15 9.39 6.35 5.44 6.45 9.12 8.18 8.79 8.76

Trotal 35. 55 39.33 :i6.12 33.70 33.29 38.14 39.92 38.25 40.84

Changes in Money Supply 2.54 -0.17 -1.51 -1.42 2. 18 2.72 0.44 0.34Changes in Quasi-Money 1.24 -3-04 -0.91 1.01 2.67 -0.94 -0-33 0.58

Total Change 3.78 -3.21 -2.42 -0.41 4.6i 1.78 0.11 0.92

IFactors Affectinls Chanxes

Net Foreign Assets 3.91 -1.51 .*0.27 -2.37 0.03 1.61 1.26 0.77Net Domestic Assets -0.13 -1.70 -2.15 1.96 4.82 0.17 -1.15 0.15

Net Claims on Government -1.01 0.18 -0.55 3.18 :5.14 2.95 -0.39 0.45Claims on Private Sector 1.09 -0.80 -0.2e -0.79 0.68 -0.26 -0.71 -0.i6Allocation of SDRs - - - - 1L.54 -1.29 -1.29 -1.28Other Items (net) -0.21 -1.08 -1.32 -0.43 2.54 -1.23 1.24 1.14

(In percent)

Money Supply 9.3 -0.6 -5.1 -5.0 8.1 SI.4 1.5 1.1Total Money, Supply and Quasi-Money 10.6 -8.2 -6.7 -1.2 14.6 4.7 0.3 2.3claimis pn E'rivate Sector w0.6 -7.o -2.7 -7.7 7'.2 -2.6 -7.0 -1L.6

Source: National Bank of Yemen

TABLE 6.3

Balance Sheet of Currency Authoritv

(In millions of Yemeni dinars)

December Harch1963 1966 1967 1968 1969 191C 1- 971 1972

LiabiLities

Currency in circulation, of which: 15.88 ]8.82 20.83 21.04 21.72 24.81 25.43 24.40 27.06Notes (15.71) (18.50) (20.50) (212-72) (2 1. ) (24.45) (265.05) (24.00) (26.68)Coins (0.17) ('0.32) (0.33) (03.52) (0.-4) (0.,(3) (0.38) (0.40) (0.38)

Balance due to banks 0.34 0.24 0.26 1.68 0.eo 0.56 0.47 1.00 1.46Govenrnment deposits --- --- --- --- 0.13 1.65 0.16 1.02Allocation of SDRs --- --- --- 1.54 2.33 2.83 4.11Capital 0.25 0.25 0.25 ID.25 C).25 0.25 0.25 0.25 0.25IReserves 0.10 0.34 0.34 . 35 C).35 0.35 0. *35 0.35 0.43Other liabilties 0.07 0.41 0.84 1.25 I ' 31 0.91 1.62 0.74 1.09

Total liabilities/assets .LI4 s2Q.Q6 22.52 ZIL7 24.45 2&.55 ,5.62 29.73 35.42

Assetsa

External agesets, of which: 15.64 19.07 21.51 23.58 235.34 24.71 24.66 25.87 26.18Goli ((0.) (0.50) (0.58) (0D.58) (0.25) (0.25) (0.25) (0.25) (0.25)Foreign exchanLge (15.64)> (18.57) (20.93) (23.00) (22.25) (22.19) (20.85) (22.06) (21.10)IMF gold tranche (---) t---) (---) (---) (0.84) (1.56) (1.56) (1.56) (1.56)Holdings of SDRs (---) (---) (---) (---) ( --) (0-71) (1.99) (1-99) (3-27)

Claims on National Bank --- --- --- --- -- (0.99)Claims on Government, of wlhich: 0.99 0.99 0.99 0.99 (.99 2.85 38.58 3.58 8.1.3

Government securities (0.77)1 1(0.77) (0-77) (0D-77) ((.77) (0-87) (0.87) (0.87) (0.87)Treasury bills (---) (---) (---) (..-) ( .. ) (~) (2.00) (1.98) (2.00)Credit to Government (---) (---) (---) (---) (.--) (17(4 (5.49) (0.51) (5.09)Deposit with the Treasury (0.22) (i0.22) (0.22) (D0.22) (0.22) (0.22) (0.22) (0.22) (0.22)

Other assets --- --- 0.02 --- (.10 -- 0 03b 0.29 1.05

Source: National Buik of Yemen,

TAB-- 6.6.

ConsolidaLted nalance Sheet of the '1tional Bonk of Yemen

Deceeber .lrLr

1965 1i966 197 19(7: 1969 1970 1971 !9 17. 9

Lia<>ilities

Tota.l deposits, of which: 18.52 21.34 15.B 13.72 13.82 13-9?7 15.-0 ° ;- _Government deposilcs: Demand (0.52) (o.69) (-0.1B) (0.25) (C.Ce0) (0.04) (0.45) (C.La-) (0.2c)

Time (0.10) (0.66) ( - ) (3.32) (1.71) (0.24) (1.22) ( aC2) (1.13)

Other deposits: Demand (9.75) (10.60) (9.57) (7-70) (5.59) (4.57) (5.8'5) (5.30) (5.40)Time and Savings (8.15) (9-39) (6.35) (5.44) (6.45) (8.10) (6, 96) (7.5l) (7-59)

Deposits against letters of credit - -- (1.02) (1.22) (t-28) (1.17)Credit from Currency Authority -- -- -- -- -- 1.02 --Balances due to local hanks 1.46 1.42 1.26 0.94 1.$8 -- -- -- --Balances due to foreign banks 1.50 1.24 0.93 3.54 o.58 0.50 0.36 > 1.27 0. _Capital accounts *-- 0.40 0.40 0.40 0.40 0.Y5 1.01 1.C0 1.0,Other liabilities 5, 32 3.64 3.07 5.71 7.21 4.47. 5.42 3.85 5.05

Total liabilittes/assets 26.80 28.04 21.44 27.31 23.89 20.31 22.49 21.69 22.41

Assets

Cash 1.08 0.84 0.65 0.49 0.47 0. y6 0.5, 0. 24 0.2FBalances with Currency Aut:hority 0.34 0.24 0.2 1.68 0.80 0 515 .47 1.C0 1.46Balances with local banks 1.27 2.08 1.42 1.02 1.63 -- -- _ --Balances with foreign banks 7.66 9.02 4.79 8.51 5. 20 1.71 3.37 2.69 2.94Loans and advances (10.05) 10.92 10.13 9.87 9.08 9.92 9.86 9.40 9.69Investments: Local 0.21 0.43 0.42 0.40 0.40 0. 25 0.0 0.C5 0.05

Foreigrn 0.38 0.45 0.45 0.1o 0.10 -- -- _ 0.01

Other assets 5.81 4.06 3.33 5.16 6.22 7.52 8.21 8.J1 7.88Source: National. Banr of Yemen

TABLE 61.5

Domestic Credits by t:he National Bank of' Yemien (Loans, Advances, and Overdrafts)

(In 0O0'sD)

Dec. March June SeFt. Dec. March June Sept. Dec. March June Sept,1969 1970 1970 1970 1970) 1971 1971 1971 197L 1972 1972 1972

According Owership

a. Government n.a. TL.a. - - - - 81 152 302 323 302 2'71b. Quasi-Government in. a. n. a. 315 46 41 48 52 107 6'; 68 73 50c. Public Sector n.a. n.a. 3,006 3,507 4,397 4,127 5,728 3,505 3,896 3,918 4,61.6 3596 9d. Co-operative Sector n.a. in.a. - - - - 112 137 173 271 349 509e. Mixed Sector n:.a. ri.a. - - - 25 46 4 11] 17 `j5 54f. Private Sector in.a. n.a. 5,786 4,856 5,360 5,201 5,501 5,382 5,408 5,096 5,215 4,787g. Others n. a. n. a. 275 316 - - - - - - - -

According, Purposes

a. Agricultural Loans and n. a. n. a. 115 142 14]. 196 276 347 455; 613 685 774Industrial Loansb. ConMMercial Credits n.a. n.a. 8,899 8,498 9,575 9,123 8.957 8,846 9,400 8,81'7 9,412 8,706c. Personal Credits n.a. n.a. 86 85 84 82 87 92 263 4953 i60d. Others n.a. n.a. - - - - - - - - -

Total Domestic Credits 9,080 8,930 9,10( 8,725 9,798 9,401 9,320 9.285 9.855 9,693 10.59J0 9,640

Source: National Bank of Yemen, Aden.

TABLE 6.6

Cou--position of Deposits held by the National

Bank of Yemen

(In 000's YD)

Date Fixed Saving Demand Current Others Total

1970 June 2 771 2,090 1,717 6,262 1,720 14,560

September 2,977 2,041 2,954 6,540 1,954 16,266

December 5,225 2,009 2,710 5,151 1,415 14.508

19N1 January 5.°31 2,007 2,965 5,442 1,380 15,025

March 3,857 2,084 2,268 6,130 1,276 15,675

June 4,715 2,229 816 5,635 1,307 14,702

September 5.321 2,284 910 6,026 1,538 16,079

December 5,771 2,226 - 6,478 1,222 15,697

1972 January 6,548 2,213 - 5,984 1,291 16,03t6

March 6195 2,204 - 6,065 1,166 15,630

June 6.915 2,217 - 5,786 1,174 16,092

Source: National Bank of Yemen, Aden.

TA]BLE 6.7

Deposits held by the National flank of Yemen lby Sectors

(In 00(' s 'YD)

PublicEconomic Semi- Grand

Date O)rganizations Goverrnment: Ot:hers Total Government Cooperative Mixed P'rivaite External Total

1971 March 1,741 2,535 942 5,218 :1,463 659 281 8,09( 1 I7 1-.5-4

June 1, 293 2,644 354 4,291 1,223 448 339 8,107 141 1'.549

September 1,484 2,796 754 5,034 IL,438 449 369 8,537 117 11.944

December 1,668 2,319 1,231 5,218 1,674 479 427 7,711 I 1- .97

19'72 'Marc'h 1,555 2,072 1,128 5,85 1,410 543 406 7.564 ;'4 1-. -0

June 1,794 2,959 808 5,561 1,,514 687 499 7,500 -i5 l-z.092

July 1,728 2,993 794 5,515 1,420) 7L4 509 7,518 ,146 l. 0^-

August 1,873 3,038 1,538 6,449 1,271. 7(0 451 6,959 339 16.1-9

Source: National ]Bank of Yemen, Aden.

Table 7.1 Irrip-t .".reas- in PI.RY 19697

Total Irrigated area inPercent of Total Land

Wr:L !rr:ig:ited Areas STpatn Irrigntod Areas TotaL lIrrigated Areas area of Governorates and- in acre:-, in acrz-; - in ELcres - Nation

First Governorate 210 _ 0 .10001 _j2L _,.l 1 0.2BI;r Ahned :210 L500 710SDcotra Island - 1,000 1,000Ka.maran ssland 50

Second Gover.orate L200 L2'l00 23 1iJ,°O 21 :L.9Southern RejCion (mainlyWadi T1ban) 3,500 27,500 31,000EaLstenl Region(EL Sobeiha) 400 6,100 6,5ooNorthern Repion(El Dhala) 1,500 3,500 10,000

Th~ rd Governorate 12,000 25 5 5Cl10 00 42.5Southern Region (Abyan Delta) 3,000 47,000 W0,000Central Region(Dathina, Lodar

Mukeiras) It,000 30,000 34h,000Eastern Region(rvainly Ahwar) 2,500 9,000 llU,500Western Re.7ion 2,500 3,500 6,000

Four-th Govnrnorate 10,800 23 38,523 22 49,323 220.4Southic:rnYc'iol(MlaifaLIali) _7,30r I2,700 I ,000C(ntraL Re; Ion(Wahidi) 1,500 15,500 20,000ED7tvrn Rc.'on 100 100NOthe ; :;(:ion(PcihaLn) Ih,GOO 10,223 12,223

Fiftr, Governorate i8L681 39 7 71 26, 1426 12 0.09Sou'hern Region (mainly Hajr) 3,000 4,391 7,391Csntral Rngion(mainly MukaLlla) 8,480 816 9,,296Fastern RegLon htL5 99 544L1orthern Region(Hadhrarnaut) 6,256 1,068 7,324V4estern Region 500 1,371 1,871

Sixth Governorate Q5 2 _ _ 850 0 .*0014

G}UMND TOTAI FOlY L47,9b41 100% 179,868 100% 227,809 100% 10.3

Source: Central Statistical Office

Table: Table 7.2 Estimated Agricultura] Production

(area in thousand acres and production in thousandL tons)

Crop Cotton Wheat Ekirle Sesame Sorghum & Millet Tobacco_Year Area Production Area Production Area Production Ar'ea Production Area Production Area Production

196s3/64 51.9 29.1 22.0 18.0 2'.5 3 .0 8.0 2.2 99.0 40.0

196b5/6, 69.1 36.7 23.0 20.3 3.2 3.2 9.() 2.6 120.0 52.0 . oJe

1965/66 40.0 19.1 24.0 19.6 3.0 2.8 9.() 2. 6 110.0 44.8 . o.h

1966/67 35.1 23.6 24.0 21.0 ,.0 3.5 9.8 2.9 150.0 54.0 .

196?/6&3 1].8 9.9 22.0 18.0 3;.O 3.0 7.0 2.0 110.0 15.0 . 0.3

1968/619 50.0 41.0 2h.0 21.0 3. 3 .5 1O.(C 3.13 170.0 61.2 . .:

1969/710 28.6 13.9 18.0 12.5 3.0 2. 0 10.0 3-4 90.0 57.0 1.5 1.315

1970/71 283.1 13.9 18.o 12.5 3.0 2.0 10.0I 3.4 90.0 57.0 1.5; 1.35

Souirce: Ministry of Agriculture! and AgrariEn Reforrn and Cenitral Statistical Office.

Table 7.3 Estimated Fish Landings by Species

(In thousands of metric tons)

1965 1966 1967 1968 1969 1970 197i

Sardines, anchovies 75.0 7.5 5.1 5.4 99.5 87.8 89.4

Tunas, bonitos and billfish 2.5 1.5 1.3 1.6 6.6 2.7 7.5

Mackerels 1.8 3.2 2.2 2.3 3.9 4.3 1.9

Jackfish, mullets, etc. - 24.2 21.6 22.4 4.1 1.8 1.9

Redfish, bass 11.2 11.3 10.1 11.2 0.3 5.2 3.0

Cods, hakes, haddocks 1.6 1.7 1.2 1.5 0 0 0

Sharks, rays, etc, 4.1 3.3 1.1 1.9 1.0 0.9 1.6

Miscellaneous marine fish 5.5 2.0 1.0 3.3 3.5 11.7 7.7

Marine crustaceans, cuttlefish 0 0 0 0 0 0.1 5.2

Sea urchins and sea cucumbers 0.1 0.1 0.1 0.1 0.1 0 0

Turtles and other reptiles 0.2 0.2 0.1 0.2 0.3 0.5 0

102.0 55.0 43.8 49.9 119.3 115.0 118.2

aouurce: ihe reb'jLic Corporati- on OU± CLDU wae.aL,1"

i / ~ -S"- ioke 4 u a %- - o--t- + ^fres J .a1~,cA r)+~ ter'i

at tg-es ratior 69 o af 13 ee c.e tat the ratio of 1:3.

I'able 8.1. Production of the Aden Refinery 1965-71(in m.llion longtons)

1i 65 19:66 1967 1968 1969 1970 1.971

Gasoline 1.0 1. 0 0.7 0.6 0.6 0.7 0.4

Jet fuel 0.7 0.? 0).6 0.5 0.9 0.9 0.6

Fuel oils .2 ;.1 I.3 .3.7 4.6 4.6 2.4

other products 0.2 C).3 0.3 0.2 0.2 -_ -_

Total production 7.1 7.1 5.9 5.0 6.2 6.2 3.1

Source: Central Statistical Of'fice

Table 8.2 Petroleum Refining Industry(Values in YD million; quantities in million lcng tons

19 65 1966 1967 1968 1969 L970 L971

ImportsQuantity 84.1 8.1 6.1 5.1 6.6 6.5 3.9Value 4L.8 39.5 27.1 27.4 34.8 33.8 25.7

ProductionQuantity 7.1 7.1 5.9 5.0 6.2 6.2 3.4

ExportsQuantity 1I.2 I.0 4.3 5.6 5.6 3.1Value 31].3 30.9 31.4 34.2 44.5 45.0 29.2

Ship's b :erfuel oil.Quantity 3. 0 3.5 1.4 0.4 0.6 0.6 0.4Value 20.0 22.4 8.5 2.7 3.8 14.0 3.3

Domestic consumption 0.5 0D.5 0.3 0.3 0.3 0.3 0.4

Source: Central Statistical OJffice

eAdis refinr do a nol; Dvide al. thiee fi e}. oil sp nlie to shiv in Aen Port. Sore of theounkering cc O m eg nave hO owan arrangemen s for the iupp y of 0 oil irom other sources.

Table 8 .3Local Cash Outlaysof the Aden Refinery(in YI) million)

1966 1967 1968 1969 1970 1971

PaYments to government 1.1 1.2 1.2 1.4 2.1 1.7

Pavments to vovernmentdepartments for services 0.1 0.1 0.1 0.1 0.1 0.1

Payments to YemenPorts Corporation 0.o °=5 0 2 0.2 0.3 o.h

P-f^Q ^^^w^^ n 2 n-2 0.2 0.M.Paymens to contacto _

S -3-La -A;. e s a nd wqa6-es 2.0 2.1 2.21.7 1.6

'Oth er paym,entus r0.7 n,7 0 n 01< 0w O7

m A ays ~ ~ A A AA ~ 0

SoUr ce i UAden±O,Re f4ine ry. '4*J

Source: Aden Refin ery

Tablee 8o 1

Industrial ?roduction

Units 1967 1968 1969 1970 1971

S '.t Thousand tons 78 79 61 76 66

Sof~t A-inks Million bottles li4 23 26 22 13

Dairy products Thousand litres 1,h,05 465 46L ht2 LI39

Aluunirriu- ware Thousand pounds 132 225 268 260 293

Cement blocks Thus and pieces 488 )491 4Q90 161 6h

Tiles Thousand pieea 1,032 766 606 735 955

Electric power Xil lion n-WIh 137 10 103 11 1!27

Shipbuilding andrepairing Number of ships 603 -- 478 204 352

Source: Central Statistical Office

1/ First governorate only

Table 8.5: Activity at Aden Port

(in thousand long tons)

1965 1966 ___b Lyou o o 7v 7 I ,rr , n

Ships

Number of ships called 5,727 6,246 3,100 1,382 1,56P 1,613 l,46(Ne+ 28,i.i? 2 A21 ,4A 15A,4, AjirI RQo1Q fi9 7), 67 12Dry Cargo imported 670 647 453 432 406 433 269D*ry Cargo e-orted 196 18) 177 127 99 Q)9 87Oil Imports 8,121 8,072 6,109 5,145 6,609 6,477 3,896Oil E,<orts 4,2143 3,985 14,355 14,372 5,8 ,2 3,138

Dnhow s

Numober of' d-ows called 1f519 1,443 1,.14 1 , 3 L7 ,1431 1,310 938Net registered tonnage 148 140 137 128 131 125 88

Dry Cargo Exported 100 95 79 ;74 86 61 43

Ships' bunker fuel oil 2,969 3,489 1,400 388 576 557 409.irwiit passengers

(in thousands) 146 128 28 1 3 3 2

Source: Yemen Ports Corporation

Table 8.6 Verien Ports Corporation Revenues and F'xpenditures

(In thousands of YemerLi dinars)

Year ended M arch 31 :1965/66 196;'V7 19677/68 1968/1969 15c69/70 1970/1971 1971/72

Revenues 1,738 1,851 q! S25 L,0CL 126 975

Tolls and wharfage on iMportsexpcrts & transshkipmnents 5142 517 362 1451 L191L 675 423

Tolls on bulk oil installation 34.L7 398 113 66 7L 77 73TolLs and corunted payments on

Llttle Adeni Refinery 151 15;1 123 1.21 160 152 153Pilotage Charges 154 18,1 51 39 9 48 39F'ort dues 1406 L,57 140 113 15 7 147 158Other s 139 107 172 1.34 11:3 1147 129

EBenditures 1,54o 1,5CO 1,455 1,1LL 88o 937 893

Ordinary expendit;ure 1,371 1,29! 1,366 791 822 868 887Capital exenditure ;Y 169 206 89 220 58 69 6

Surplus cr deficit 198 352 493 86 16:L 309 82

Source: Yemen Ports Corporation

1/ Lncluding deprieciation and renewals

Table 8 *7ActivitieS of Aden International Airport

(1965-71)

Passengers/ Freight Aircraft

Arrival Departure - in tons - Movements

- in thousand -

1565 83.0 86.2 3,959 12,332

iLeCo6 7'6 8L.0 3,185 10,623

1967 40.2 4,a9.7 1,727 6,157

1968 53.3 53.2 5,851 56o

1969 62.8 62.9 l,1947 6,354

10470 7L.h 73.1 2;398 6,731

1971 76.4 76.7 2;333 5,086

1/ Excluding transit passengers

Source: Department of Civil Aviation

Table 9.1 . Consumer and Wholesale Price Indices of Aden

(1969 = 1oo)

1970 19i71

A. Consumer price indexGeneral index 105.0 110.6

Foodstuffs 106.5 114.4

Fuel, water and liahting 100.2 102.3

Rent 100.0 100.0

Clothing 108.7 109.8

Household supplies 103.8 110.6

Qat, tobacco, andalcoholic drinks, 105.6 115.5

Outher 101.2 102.5

B. 'wholesale price inldex

General index 106.0 117.0

Foodstuffs 111.9 127.0

Raw materials 94.3 72.1

industrial products 101.3 110.5

Building materials 112.4 124.8

Fuels 100.5 112.1

Source: Central Statistical Office. Aden

Table 10.1 Public Schools, E_rollments and Participation Fates

NuTber of' Schools Enrollmpents Particirpation Rates ( d of .Relevant Age(in lo0O) Groups)

Primary Iriter- Secondary Primairy Inter- Secondary 7-12 1:3-15 16-18mediate me,diatie

M F M F M l M F m F M F

1967/68 387 67 16 . .

1968/69 639 66 15 70.3 1)4.6 5.3 1.)4 0.7 0.3 . . .

1969/70 651 60 1] 81.5 '20.1 7.0 1.7 0.9 0.3 . . . .

1970/71 872 68 13 104.,C 2 5.3 10.3 2.6 2.4 0.5 . . .

1971/72 905 66 10) 115.,6 30.0 12.:3 2,9 2.9 0.7 1O#L 28 25 6 6.5 1.71972/73 - . 120.1 36.3 16.2 4,.0 3.9 1.0 106Y 33 33 8

197:1/72distributionby Governorates:

2/First 58 13 c; 23.)4 1)4.9 )4.7 2.2 1.7 0.7 104 68 4hl 22 19 8.2

Second 208 9 ] 23.1 3.6 2.2 0.1 0.1 - 148 24, 31 1.4 :L.9 0

Third 236 11 1 28.Lt 3.6 1.6 0.2 0.1 - 131- 17 17 2.5 :1.2 0

Fourth 156 9 11. 5 0.9 0.7 - - - 94L 8 1it 0 0 0

Fifth 2:18 24 3, 27.3 6.6 3. 0.4 1.0 - 85 21 21 2.5 7.3 0

S ixth 29 1.9 0.4 - - 32 6 0 0 O 0

Sources: C,entral Statistical Cffice and information supplied by the Ministry of Eucation to lNESC0

j/ Participation rates exceeding 100 percent are mainlly be lalse of the acoeptance of over-aged students.

Table 10.2: NumDer of Students in Higher Education Abroad(Departures 1968/69 - 1970/71

Country /SponsoringOrganization 1968/69 1969/70 1970/71

A. B. A. B. A. B-

USSR 2h 30 h4 42 63 5

Kuwait 28 33 5 5 7 7

Iraq 1Lt 20 - -

Lebanon - - 7 7 = =

Sudan 4 4 6 6 6 6

GDR _ _ 12 12 11. 1'

Algeria 6 10 9 10 -

FR Ger-man 2 2 1 1 = -

iagyp. _ _ 5n 5 - -

Hungary 2 2 9 13 _ _

I ndi _LC

Korea - - 19 20

Frarnce - 9 14

Yugosliavia - - 4- -

Pakistan - - 1 1 2 3

Romania 2 2 - _ 2 :

Other Countries - - - - 37 4(

WHO 12 12 5 5 - -TOTAL T~ 115 169 177 148 15(

A. No. of Students AbroadB. No of New Scholarships Offered

Source: Central Planning Commission and Ministry of Education

a- f C e.A flt.LC.-k4-..j4 1A71 /7C1~L,' I'J); r~JL1. .UCL&UL43Ok.JUUQY.LIJ~ AUVUMA JDJV MJJ%W)V%.j J.714LI 11

uDJecT Nirunoer ,b

Science./ 68 1i.7

ngineering 153 24.1

Medicine 115 18.1

Economics 48 7.6

Law 20 3.2

Political Science 4 o.6

Public and Business Administration 17 2.7

Agriculture and Fisheries 31 4.9

Mathematics 2 0.3

Sociology 1 0.2

Psychology 3 0.5

Geography 2 0.3

Music 1 0.2

Education 32 5.0

Arts2 / 15 2.4

History o o.6

Architecture 2 0.3

Unknown 116 18.3

TOTAL 634 100.0

1/ Chemistry, physics,general science, geology, biology

/ Including veterinary medicine

3/ Including languages

Source: IL0, Manpower Assessment and Planning in PDRYJ and Ministry ofEducation.

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