ABSTRACT
The period from late 1971 to 1975 constitutes a separate phase in the short history of the Yemen Arab Republic (YAR). The dynamic underlying the transition was a growing and only gradually apparent contradiction between the sociopolitical composition of the al-Iryani regime and the possibilities for and the requirements oaf major breakthrough in state building and modernization. One side of the growing contradiction was a set of conditions that by 1974 held out the prospect for a rapid increase in the pace of state building and modernization in the immediate future. These conditions fall into three categories: the middle-term solution of the financial crisis, the increased availability of external development aid and the modest increase in the capacity of the state to plan and to manage. The most important act of state building between 1972 and 1974 was the establishment of the Central Planning Organization (CPO).
