YEMEN Development think tank

What indicators of poverty are present?

Yemen is the poorest country in the middle east. Access to food, potable water, and other critical commodities such as medical equipment is limited across the country due to security issues on the ground. Rising food prices pushed an additional 6% of the country into poverty in 2008. As of 2014, 54% of the population is below the poverty line, and The Social Welfare Fund has not made any disbursements since then, and is no longer operational. The country also faces high unemployment, and most employed Yemenis work in agriculture--services, construction, industry, and commerce account for less than one-fourth of the labor force. (The World)

Population between 0-14 years old is 40.48% (male 5,639,657/female 5,447,662) (The World)

Life expectancy at birth is 63.8 years (Human)

School life expectancy is 9.2 years (Human)

The industrial production growth rate in 2016 was -27%

To give context concerning the social situation: in Yemen, homosexuality is illegal and punishable by death. There is also a lot of discrimination and violence against women. The country faces issues of human trafficking. Freedom of speech, the press, and religion are all restricted. Torture, inhumane treatment, extrajudicial executions, and arbitrary arrests of citizens also takes place.

Why does Yemen have such a low HDI?

Political Instability

Under the rule of President Ali Abdullah Saleh, there were many demonstrations, which eventually turned violent. The demonstrators wanted the president to step down due to their dissatisfaction of the public with the high unemployment, poor economic conditions, extreme corruption, and his many many years in power. He was later replaced by Abdrabbuh Mansur Hadi, leading to a constitutional drafting and referendum. (Ruth)

In September 2014, Houthi rebels took over the capital. The Houthis are a Shia-led religious-political rebel group. The United Nations then brokered a peace deal between the Houthis and the government. Consequently, the Houthis agreed to withdraw from the areas they took over under the condition that the government formed a "unity government," in which they shared power. This brief period of peace ended in 2015, when Houthis rejected the constitution proposed by the government and moved back into the capital and seized the presidential palace three days after Hadi resigned. Hadi subsequently revoked his resignation. He fled to his hometown of Aden, and then proceeded to find refuge in Riyadh, Saudi Arabia. He denounce the Houthi takeover as an unconstitutional coup d'état. Saudi Arabia and its allies proceeded to launch airstrikes against the Houthis. (Ruth)

UN Secretary-General Ban Ki-moon called for "restoration of legitimacy of President Hadi," saying "The situation is very, very seriously deteriorating, with the Al Houthis taking power and making this government vacuum." (AP)

Yemen’s constitutionally stated capital is the city of Sana'a, the city has been under rebel control since February 2015.

The ongoing war in Yemen has halted the country's exports, pressured the currency’s exchange rate, accelerated inflation, severely limited food and fuel imports, and caused widespread damage to infrastructure. (The World)

At least 82% of the population is in need of humanitarian assistance. (The World)

The Port of Hudaydah, which is crucial for trade, as it handles 60% of Yemen’s commercial traffic, was damaged in August 2015 as a result of the conflict and is only operating at 50% capacity.

Prior to the start of the conflict in 2014, Yemen was highly dependent on declining oil resources for revenue. Oil and gas earnings accounted for roughly 25% of GDP and 65% of government revenue.

The country is also fighting terrorism on its borders.

Corruption/Kleptocracy

Yemen’s Central Bank reserves stood at $5.2 billion prior to the conflict. They currently stand at $1.5 billion. (The World)

The Central Bank is exposed to approximately $7 billion in overdraft, more than three times the legal limit. This is directly linked to the Huthis withdrawing $116 million on a monthly basis. (The World)

The private sector is suffering, with almost all businesses making substantial layoffs.

What are root reasons why Yemen has not developed successfully?

Geographic Causes

Limited natural freshwater resources, inadequate supplies of potable water, overgrazing, soil erosion, desertification. (The World)

Temperatures are generally very high in Yemen, particularly in the coastal regions. Rainfall is limited, with variations based on elevation.

Yemen's principal natural resources are oil and natural gas as well as agriculturally productive land in the west, although the arable land only constitute 2.2% of the country. 0.6% of the land is planted with permanent crops. Permanent pasture is 41.7% of the land. (The World)

Yemen is subject to sandstorms and dust storms resulting in soil erosion and crop damage.

Despite the numerous geographical disadvantages, Yemen has 1,906 kilometres (1,184 mi) of coastline along the Arabian Sea, the Gulf of Aden, and the Red Sea, which is helpful for trade. (The World)

Domestic Causes

Aforementioned corruption and political instability

Judicial corruption, inefficiency, and executive interference undermine due process. The government does not fully comply with the minimum standards against human trafficking and is not making significant efforts to do so.

International Causes

Yemen was the home of the Sabaeans a trading state that flourished for over a thousand years and probably also included parts of modern-day Ethiopia and Eritrea. One would think that this would help the development of the country, yet administration of Yemen has long been notoriously difficult. It hosted several dynasties emerged from the ninth to 16th centuries. The Rasulid dynasty was the strongest and most prosperous. In the early twentieth century, the country was divided between the Ottoman and British empires, and though it was initially unusually prosperous under these empires, the country eventually suffered to serve the interests of the colonizers subject. North Yemen, which became a state after the collapse of the Ottoman empire, and South Yemen, the British colony, united to form the modern republic of Yemen in 1990. (EU)

What is Yemen Missing?

Peace and stability

History of Development Attempts

The Yemeni Government regularly faced annual budget shortfalls. In 2010, oil and gas made up 63 percent of government revenues. However, oil production declined steadily. This was evident through the 24% drop in barrels of oil produced a day between 2010 and 2011. Consequently, it tried to diversify the Yemeni economy through a reform program designed to bolster non-oil sectors of the economy and foreign investment. (The World)

As part of these reform efforts, Yemen exported its first liquefied natural gas in October 2009. (The World)

The international community supported Yemen’s efforts toward economic and political reform by establishing the Friends of Yemen group. In 2012, the Friends of Yemen pledged nearly $7 billion in assistance to Yemen. There are 39 countries and international organizations in the Friends of Yemen. (Friends)

In July 2014, the government continued reform efforts by eliminating some fuel subsidies. (The World)

In August 2014, the IMF approved a three-year, $570 million Extended Credit Facility for Yemen. (The World)

The conflict that began in 2014 stalled these reform efforts.

The Houthis have interfered with Ministry of Finance and Central Bank operations and diverted funds for their own use.

What concrete steps should be taken to help the country develop more successfully?

Yemen will require significant international assistance during and after the extensive conflict to stabilize its economy. Long-term challenges include a high population growth rate, high unemployment, declining water resources, and severe food scarcity. Three actions I propose are:

1. Toppling of the Houthis by international forces

2. Installation of a stable government backed by a coalition of international allies until the country is able to function smoothly as an independent democracy

3. Openness to international capital flow, stimulation of industries other than oil, and international aid in the rebuilding of infrastructure

Although these proposed actions may not seem realistic given the current state and prospects of the country, perhaps one day when the conflict has ended Yemen might be able to implement some of these ideas.

Bibliography

AP, AFP And. "UN Calls for Yemen President Hadi's Reinstatement." GulfNews. Gulfnews, 17 Aug. 2015. Web. 22 Feb. 2017. <http://gulfnews.com/news/gulf/yemen/un-calls-for-yemen-president-hadi-s-reinstatement-1.1453472>.

EU-Turn. "Institut MEDEA." Institut MEDEA RSS. N.p., n.d. Web. 22 Feb. 2017. <http://www.medea.be/en/countries/yemen/yemen-reunification/>.

"Friends of Yemen: Questions and Answers." Friends of Yemen: Questions and Answers - News Stories - GOV.UK. N.p., n.d. Web. 22 Feb. 2017. <https://www.gov.uk/government/news/friends-of-yemen-q-a>.

"Human Development Reports." | Human Development Reports. N.p., n.d. Web. 22 Feb. 2017. <http://hdr.undp.org/en/countries>.

"Middle East: Aden." Middle East: Aden. N.p., n.d. Web. 22 Feb. 2017. <http://www.britishempire.co.uk/maproom/aden.htm>.

Ruth, Lisa M. "Explaining the Crisis in Yemen: Houthis, Shias, Sunnis and Saleh." Communities Digital News. N.p., 23 Apr. 2015. Web. 18 Feb. 2017. <http://www.commdiginews.com/world-news/explaining-the-crisis-in-yemen-40238/>.

"The World Factbook: YEMEN." Central Intelligence Agency. Central Intelligence Agency, 12 Jan. 2017. Web. 18 Feb. 2017. <https://www.cia.gov/library/publications/the-world-factbook/geos/ym.html>.

"Yemen." Natural Resource Governance Institute. N.p., n.d. Web. <http://www.resourcegovernance.org/our-work/country/yemen>.

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http://www.letstravelsomewhere.com/travel-inspiration/anthony-pappone-yemen/

http://www.maciejdakowicz.com/features/

http://kingofwallpapers.com/yemen.html

http://www.breitbart.com/national-security/2015/01/22/us-policy-collapse-yemen-president-prime-minister-resign/

https://www.shutterstock.com/video/clip-4401641-stock-footage-flag-of-yemen.html

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