While Yemen’s political unrest, its civil conflicts in the south and north, and its rising tide of al-Qaeda linked extremism capture headlines, the south Arabian country is heading toward a quiet economic implosion that could dramatically compound its current difficulties, spill over into bordering states, most notably Saudi Arabia, destroy the lives of millions of Yemenis, and take the country further down the road to what some analysts are calling a “failed state.”
The economic numbers are grim, and the future does not look much better. Yemen is the poorest country in the Arab world. Its GDP growth rate during the five year oil boom beginning in 2003 has been anaemic, averaging about 2.5% – low by the standards of oil producers. Meanwhile, its oil – which accounts for some 75% of government revenue – is dwindling, with no new discoveries in sight. Indeed, the World Bank has noted that Yemen might not have any oil left for export within the next ten years.
While Yemen is not a major oil exporter in the global sense, its oil revenue helps the government meet its basic needs and fund state development projects. The oil revenue also greases patronage networks among various tribes and allies of Yemeni President Ali Abdullah Saleh. Without the oil exports, its hard to imagine any Yemeni government maintaining even a basic semblance of central government control. Yemen’s successful launch of its liquefied natural gas program (LNG), which saw its first shipments pushed out in October 2009, will make up for some lost revenue, but will be unable to match the earning power of oil exports in the near to medium-term.
Furthermore, population trends will likely compound Yemen’s economic troubles. Yemen is one of the youngest countries in the world, with more than two-thirds of its people under the age of 24. That young population is crashing head-on with a weak economy that fails to produce adequate jobs. Yemen’s unemployment rate – at nearly 35% – is among the highest in the world. And the future does not look much better: Yemen’s population of 22 million will likely double within the next twenty years.
This population will continue to put pressure on state’s deteriorating infrastructure, including its water resources. The World Bank, in a 2006 report, noted that Yemen could face severe water shortages and describe a looming water crisis as “extreme.” Most of the nation’s water is used to grow qat, the mildly narcotic leaf chewed by Yemenis of all segments of society. Meanwhile, Yemen’s Minister of the Environment Abdulrahman Al-Iryani said in 2008 that Yemen’s domestic water supply collapse is irreversible. In short, Yemen will not survive without water supplies from elsewhere.
As the population grows and the sources of government revenue decrease, Yemen’s government faces the prospect of losing further control of its population outside the capital city, Sana’a. The gradual diminution of central government control could lead Yemen into a situation that would see it devolve into semi-autonomous regions and cities, suggested Christopher Boucek, an analyst with the Washington-based Carnegie Endowment for International Peace. Referring to similar cases in Somalia and Afghanistan, Boucek wrote in a recent report on Yemen that that such “a slow, emerging state of lawlessness in Yemen would provide opportunities for extremists directed or inspired by al-Qaeda to regroup, organize, train, and launch operations against U.S and allied targets throughout the Gulf region.”
The U.S National Intelligence Council, in its report entitled “Global Trends 2025: A World Transformed”, noted that Yemen is likely to face a rise in Salafist extremism as its population grows and economy weakens. It is also noted that Yemen is “ripe for continued instability and state failure”, unless its population growth slows and its economy strengthens.
Needless to say, Yemen emerged as a key topic at the recent Gulf Cooperation Council Summit in Kuwait, but much of the attention focused on the Houthi rebellion in the north and the perceived security implications for Saudi Arabia and the GCC states as a whole. While the Houthi rebellion and the southern secessionist movement pose significant problems to Yemen’s government, its slow economic deterioration might be more consequential to its future – and thus the future of the GCC states.
That’s why it is vital that the GCC states, along with a broad-based coalition of other states, take the lead to support Yemen in its moment of economic crisis. The possibility of railway links to the GCC states, as discussed in the summit, is a useful idea, but one that is not sufficient. What is needed is a broad-based strategy of development. Without significant and sustained support aimed at forestalling an economic crisis and laying the foundations for more broad-based development, Yemen will likely buckle under the tremendous pressure it faces.
A cracking, buckling, deteriorating Yemen as failed state will pose far more danger to the GCC and the international community than the latest round of civil conflict within its borders. The time is now to begin the process of healing Yemen’s economic wounds. If we fail to do so, those wounds will expand, destroying the lives of millions of innocent Yemenis, and spilling over across Yemen’s borders and beyond.
Afshin Molavi - Senior Research Fellow at the New America Foundation and author of Persian Pilgrimages: Journeys across Iran
