The Economic Dimension of Yemeni Unity
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University of Richmond UR Scholarship Repository Political Science Faculty Publications Political Science 1993 The conomicE Dimension of Yemeni Unity Sheila Carapico University of Richmond, [email protected] Follow this and additional works at: http://scholarship.richmond.edu/polisci-faculty-publications Part of the International Relations Commons, and the Near and Middle Eastern Studies Commons Recommended Citation Carapico, Sheila. "The cE onomic Dimension of Yemeni Unity." Middle East Report 184 23, no. 5 (1993): 9-14. This Article is brought to you for free and open access by the Political Science at UR Scholarship Repository. It has been accepted for inclusion in Political Science Faculty Publications by an authorized administrator of UR Scholarship Repository. For more information, please contact [email protected]. Saudi Arabia Unresolved Border Region ,7 Yemen ". / 'AlGhavdah ' ' OflPipdme Nimr-Arcnfoll 41Hudaydah \ J 0Old North-South Border Aden Gulf of A PetroleumFinance Co. The Economic Dimension of Yemeni Unity Onthe Sheila Carapico JoeStork In North and South Yemen, disparities in patterns of private and public ownership were far more subtle than the designations "capitalist" and "socialist" suggest. In contrast with Germany, their marriage was more a merger than a takeover. the outside world, the unification of the two Yemens Germany, capitalist (northern) firms would buy out the To in 1990 resembled the German experience in minia? moribund (southern) state sector and provide the basis ture. North Yemen (the Yemen Arab Republic, YAR) was for future economic growth. considered a laissez-faire market economy, whereas the In theory, and in Germany, capitalism and socialism South (the People's Democratic Republic of Yemen, PDRY) are distinguished by patterns of private and public own? was "the communist one." When, weeks ahead of Bonn ership of the means of production. In North and South and Berlin, San'a and Aden announced their union, Yemen, however, differences in ownership patterns were Western commentary assumed that in Yemen, as in largely evened out by comparable access (and lack there- Middle East Report ? September-October 1993 of) to investment capital. Disparities in the relative weight most men and women. Both governments were unsure of of private and public enterprise were far more subtle than their authority in the countryside, and each backed ele? the designations "capitalist" and "socialist" indicate. ments of the other's opposition. The economies remained Indeed, available data on private and public participation intertwined. In the early 1970s, the Southern bourgeoisie, reveals common patterns of spending. The North's state some of them originally Northerners attracted to Aden's sector invested more than did the private sector, while the port economy, moved back north to Ta'iz, Hodeida and South's socialist policy statements belied the increasing San'a, where they established businesses and held gov? role of domestic and foreign private firms. ernment posts. After the rise in oil prices in 1973, worker Relatively poor countries situated on the periphery of remittances fed consumption (imported goods, residential the Arabian Peninsula's oil economy, both Yemens relied construction) rather than productive investment, despite on labor remittances and international assistance. Both both regimes' efforts to mobilize these funds for agricul? Yemens faced austerity when falling oil prices, compounded ture and industry. by a drop in Cold War-generated aid, reduced access to hard The North was more affluent and enjoyed higher con? currency?until the discovery of oil in the border region sumption of imports, but it also had far worse current in the mid-1980s attracted a third type of international account deficits. Although the labor force was still pre? capital from multinational petroleum companies. These dominantly agricultural, especially in the North, over half forces cumulatively reduced the differences between the of Gross Domestic Product (GDP) in both systems was gen? two systems and added an economic dimension to the polit? erated by services; the rate of new investment in services, ical incentives for unification.1 In contrast with Germany, especially government services, indicated that this trend their marriage was more a merger than a takeover, for nei? would continue. The level of education and health ser? ther was in any position to buy the other out. vices?slightly better in the South, especially for women? put both countries among the world's least-developed Two Economies nations. While central planning was a goal of the leader? ship in the South, in the North planning was not an ideo? Historic Yemen was a cultural entity rather than a polit? logical commitment but rather part of the documenta? ical unit; its formal division stemmed from British impe? tion required by the International Monetary Fund and the rialism in the South. Unlike the relatively isolated, inde? World Bank. pendent North, where a semifeudal agrarian society persisted, the South developed capitalist classes, markets Property Relations and enterprises. The major port between the Mediterranean and India, Aden's modern infrastructure and services The South, with its colonial legacy, entered the 1960s with attracted a small indigenous capitalist group, a working many more capitalist enterprises than North Yemen. South class of stevedores and industrial labor, and a small urban Yemeni nationalizations and land reforms created a mod? middle class, including shopkeepers and intellectuals. ern state sector, and dramatically equalized land owner? San'a, by contrast, was a center of Islamic conservatism ship, but the economy retained many features of a tradi? ruled by a Zaydi Shi'a imam. Strict trade and investment tional agrarian economy comparable to that of North restrictions protected a few monopoly importers and large Yemen, which was just embarking on its first commer? landowners. Would-be bourgeoisie and working class aspi? cial and industrial projects. rants escaped this restricted environment for the free port Production systems in the South included subsistence at Aden. The North was ripe for a kind of bourgeois revo? agriculture on family land mixed with herding on com? lution, opening the door to capitalist development, just mons, sharecropping on pre-capitalist estates, and wage when the South's radical anti-imperialism slammed the labor on modern farms. In Aden and Lahej, where own? door to foreign investors. ership was most distinctively class-divided, the revolu? After the 1962 revolution and 1962-68 civil war, the tionary regime expropriated the largest holdings as well North (the YAR) became a "no doors" economy, with few as religious endowments (waqf). The number of expro? legal barriers to either trade or investment. Revolutionaries priated estates increased from 18 to 47 between 1975 and in the South after 1968 nationalized or collectivized many 1982 with the addition of some smaller properties of unpop? foreign enterprises, large estates and fishing boats. Whereas ular landlords. These state farms, with modern equipment the South (the PDRY) was subsequently governed by a sin? and wage labor, managed most farm land in Aden gover- gle Soviet-style Marxist party, in the absence of legal norate and nearly a third in Lahej just to the north.2 parties politics in the North were dominated by fluid trib? Redistributed land, nearly two-thirds of the South's cul? al, Islamic and leftist "fronts" covertly supported by other tivated area, was classified as cooperative. Over a quar? Arab regimes. ter, mostly in the east, remained private.3 The two Yemens shared a physical environment where By contrast, the revolution in the North nationalized household-scale cereal and livestock production employed only the royal family's prime tracts. Over half of the large farms were private and were conservatively managed, fre? Sheila an editor this teachesinternational relations Carapico, of magazine, labor and moving only slow? at theUniversity ofRichmond in Virginia.She is currentlyin Yemenon a quently employing sharecrop Fulbrightgrant, researching political developments since unification. ly toward capitalist farming. Most dry land in both sys- 10 Middle East Report ? September-October 1993 September1992 parade celebrating the39th anniversary ofthe republican revolution highlighted themes of unity. JoeStork terns consisted of family-cultivated parcels or open range. employer). Mixed companies produced cigarettes, batter? Well into the 1980s, at least half of Yemeni farms produced ies and aluminum utensils; wholly private firms were either cereals and livestock for cultivation. The only popular, prof? small-scale plastic, clothing, glass, food and paper-goods itable cash crop in the highlands was the narcotic leaf, qat, manufacturers or traditional carpentry, metal, pottery outlawed in the South and discouraged by the North's or weaving industries. Ministry of Agriculture. Whereas the South inherited modern plants and offices, Both regimes advocated farm mechanization, yet typ? the North embarked on its first modern enterprises only ical Yemeni farmers planting sorghum or millet with their in 1970. Despite liberal investment incentives, private own draft animals on small, scattered, often terraced parcels manufacturing grew slowly. An industrial complex near were unable to profitably invest in pumps, tractors or trucks, Ta'iz producing sweets, soaps and plastics, owned by the even with remittance income.