Below the surface of drone strikes and violence, Yemen is a country struggling
with deeper problems. The end of bloody protests during the Arab Spring and a
33-year presidency gave some Yemenis hope that the road to socio-economic and
political change was clear. This road, however, is riddled with challenges
deeper than al-Qaida cells and insurgents. The deeper problems in Yemen are the
high unemployment rates, widespread poverty, lack of food, and economic
under-development. It is indeed a sad story that reminds the world how resource
mismanagement can hinder economic progress and development. There are, however
strategies and inspiration that Yemen can adopt to move forward in a positive
Yemen is one of the poorest countries in the Arab World due to
its economic under-development. This is unfortunately a continuing problem that
was not addressed under Saleh and is continuing into Hadi’s tenure as
Yemeni oil production makes up 25 percent of its GDP and
almost 70% of the country’s revenue. Economic growth outside of oil was
restricted largely to commerce and transportation. Yemen’s oil years since the
North-South unification in 1990 did little to stimulate the productivity of
Instead, the government became entirely dependent on oil
and revenue was put into the pockets of corrupt officials and not into updating
infrastructure or social services projects.
Yemen has tried to harness
and export reserves of natural gas out of fear that oil production in the
country will peak within the next 15 to 20 years and ultimately run out,
consequentially removing a chunk of its export economy. Oil is not the only
resource running dry, as water in the country is also set to run out within
about the same time-frame, if not sooner.
To make sustaining resource
development more difficult, Yemen’s current population growth rate is at about
2.5% and its unemployment rate near 35%.
At this rate, Yemen will
ultimately begin to feel its economy totally collapsing. Natural resources are
an asset for Yemen, but their benefit to the economy depends upon the
government’s ability to use them productively for long-term growth.
are ways for Yemen to diversify its economy away from the oil and gas sectors.
Yemen has a mining and mineral sector that could yield revenue if the security
situation improves. If Abyan can be stabilized, then the use of Aden as a
prominent port can be profitable in the future. Historically, Yemen had success
using the city as a deep-water port and free trade zone.
Tourism in the
country has also decreased due to violence and turmoil. The country possesses
culturally pristine elements of architecture and natural beauty. The country
remains under-developed and intriguingly provides a historic environment
virtually untouched by modern development.
These three sectors could also
potentially increase Yemen’s labor force and thus open up opportunities for
domestic labor instead of unemployed Yemenis trying to flee to other countries
such as Saudi Arabia for work. Exploiting these three sectors will not not be
enough to save Yemen’s economy, however these sectors can further develop and
coincide with current oil and gas sectors as a base for future
Internationally, it is important for Yemen to continue to
work with international financial institutions such as the World Bank and IMF.
Temporary multi-lateral aid is not a permanent solution, although Yemen does
need it to stand on its own feet for the short-term. Yemen has received a
multi-year, $370 million aid package on behalf of the IMF as of 2010 that will
expire at the end of 2012, but this is not enough to provide a permanent
Yemen has the potential to use its limited resources for
multi-lateral trade deals. Under-developed nations such as Angola have made
bi-lateral development agreements with economic powers such as China and the
United States. In exchange for energy resources, Chinese or American companies
will build roads, hospitals and generally improve infrastructure under
bi-lateral development agreements. If the security situation stabilizes, this
could potentially increase Yemen’s investment capital and give it a breath of
fresh air to focus on economic issues that have benefits for the
If Yemen does not expand its approach to economic development
through diversification and socio-economic reform, then the post-Saleh era will
perpetuate the problems of his reign. Yemen can look over the border to Oman for
In the 1970’s Oman was an impoverished, corrupt and volatile
country filled with violence and socio-economic problems similar to
Oman learned how to use its resources to broker multi-lateral
trade deals and is currently focusing on developing advanced infrastructure and
educational systems. The result is a fairly modernized country that adopted
serious reforms and put its disruptive past behind it. Yemen’s problems go
deeper than drone strikes, but inspiration for change is not far
away.The writer is an international security analyst based in
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