Capital‐Surplus, Labor‐Short Economies: Yemen as a Challenge to Rural Development Strategies

Abstract

If the test of a development model is its capacity to yield strategies that deal effectively with new and different situations, then the Yemen Arab Republic will be a good proving ground for contemporary theoretical approaches to agricultural and rural development. Until the early 1970s Yemen's annual gross national income was less than US$100 per capita; the country had a shortage of capital and a surplus of labor--characteristics shared by many developing countries. Within the last five years, however, employment opportunities in Saudi Arabia have attracted some 40% of Yemen's male labor force, and the remittance of earnings by these workers has increased Yemen's gross national income per capita by a factor of six. Policy makers now face the problem of planning for national development under conditions of capital surplus and labor shortage. There is a growing concern that the dominant models of agricultural and rural development cannot generate strategies responsive to their needs.