Yemen country profile

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Yemen was unified in 1990, precipitating a four-year struggle for power between the old parties of the north and south, and the past eight years have been probably the most stable of its modern history.

The main challenge faced since unification has been the imposition of central authority on the provinces, complicated by the divisions between north and south and by the existence of unruly tribal areas in the poorest parts of the country. Yemen has the largest population of the Arabian peninsula, of whom two thirds are under the age of 24, and the lowest gross domestic product (GDP) per capita. There is also a serious water shortage. The hope is that political stability will lead to economic revival and the alleviation of poverty.

In its 2001 Article IV consultation the IMF was positive about the stability of macroeconomic conditions, but stressed the need to reform the civil service, widen the tax base, and reduce subsidies. President Ali Abdullah Saleh has held the reins of power in the north since 1982, and over the whole country since reunification. His prime minister is Aldulqader Bajammal, who has concentrated on settling a long-running border dispute with Saudi Arabia and on increasing Yemen's participation in the GCC.

Saleh has improved Yemen's relationship with the US and its security reputation by measures such as cracking down on Islamic extremists and stepping up border security since the October 2000 attack on the USS Cole in Aden harbour, which killed a number of US sailors. Efforts have been stepped up since the 11 September attacks on the US.

Table: Yemen at a glance

Government

Government officials- (sworn in 19 May 2003)

• President: Ali Abdallah Salih

• Vice President: Abd al-Rab Mansur al-HadI, Maj. Gen.

• Prime Minister: Ali Muhammad Mujawwar

• Deputy Prime Minister: Rashad Muhammad al-Alimi

• Deputy Prime Minister for Economic Affairs: Abd al-Karim Ismail al-Arhabi

• Minister of Agriculture & Irrigation: Mansur Ahmad al-Hawshabi

• Minister of Cabinet Affairs: Salim al-Aydarus

• Minister of Civil Service & Social Security: Hamud Khalid Naji al-Sufi

• Minister of Communications & Information Technology: Kamal Husayn al-Jabri

• Minister of Construction, Housing & Urban Planning: Abdallah Husayn al-Dafa

• Minister of Culture: Muhammad Abu Bakr al-Maflahi

• Minister of Defense: Muhammad Nasir Ahmad Ali, Brig. Gen.

• Minister of Education: Abd al-Salman Muhammad Hizam al-Jawfi

• Minister of Electricity: Mustafa Yahya Bahran

• Minister of Expatriate Affairs: Salih Hasan Sumai

• Minister of Finance: Numan Salih al-Suhaybi

• Minister of Fisheries: Mahmud Ibrahim Saghiri

• Minister of Foreign Affairs: Abu Bakr Abdallah al-Qirbi

• Minister of Higher Education & Scientific Research: Salih Ali Ba Sura

• Minister of Human Rights: Huda Abd al-Latif al-Ban

• Minister of Industry & Trade: Yahya Yahya al-Mutawakil

• Minister of Information: Hasan Ahmad al-Lawzi

• Minister of Interior: Rashad Muhammad al-Alimi

• Minister of Justice: Ghazi Shaif al-Aghbari

• Minister of Legal Affairs: Rashad Ahmad al-Rasas

• Minister of Local Admin.: Abd al-Qadir Ali Hilal

• Minister of Oil & Minerals: Khalid Mahfuz Bahah

• Minister of Planning & Intl.: Cooperation Abd al-Karim Ismail al-Arhabi

• Minister of Public Health & Population: Abd al-Karim Rasi

• Minister of Public Works & Roads: Umar Abdallah al-Kurshami

• Minister of Religious Endowment & Islamic Affairs: Hamud Abd al-Hamid al-Hitar

• Minister of Social & Labor Affairs: Amat al-Razaq Ali Hamad

• Minister of Supply & Trade: Abd al-Aziz al-Kumaym

• Minister of Technical Education & Vocational Training: Ibrahim Umar Hajri

• Minister of Tourism: Nabil Hasan al-Faqih

• Minister of Transport: Khalid Ibrahim al-Wazir

• Minister of Water & Environment: Abd al-Rahman Fadhl al-Iriyani

• Minister of Youth & Sports: Mahmud Muhammad Ubad

• Minister of State & Sec. Gen. of the Presidency: Abdallah al-Bashiri, Maj. Gen.

• Minister of State & Cabinet Member: Qasim Ahmad al-Ajam

• Minister of State & Cabinet Member: Muhammad Ali al-Yasir

• Minister of State & Mayor of Sanaa: Yahya Muhammad al-Shuaybi

• Minister of State for Parliamentary & Shura Council Affairs: Adnan Umar al-Jifri

• Governor, Central Bank: Ahmad Abd al-Rahman al-Samawi

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Economy

The government is attempting to diversify the economy away from its dependence on the oil sector and to implement a privatisation programme. There is a debate ongoing about the privatisation of larger assets such as National Bank of Yemen, the Aden oil refinery and state-owned cement factories. The first private oil refinery in Yemen is being planned at Ras Issa on the Red Sea. Oil output continues to rise driven by the increased production in Masila, the mainstay of the Yemeni oil industry over the past decade.

However with oil exports being its main source of foreign currency the government has become dependent on foreign aid and soft lending. On a more positive note, the negative growth of the early 1990s has given way to growth over the past four years which has not left a band of 3-8 per cent, and inflation has been brought down to much more manageable levels. Unemployment has also been almost halved since 1990 and in 2001 stood at 18 per cent.

The government's five-year investment plan is focussed on the reduction of poverty, development of the transport infrastructure and power sector, and the exploitation of oil and gas resources. Yemen has proven gas reserves of 16.9 trillion cubic feet, which, after the shelving of liquid natural gas (LNG) plans, is to be used for domestic power and industrial projects and for a gas-to-liquids (GTL) scheme

Important to Yemen's economic development is the ability to attract foreign direct investment. A free zone has been set up in Aden but while interest from local investors has been strong, there has been less from foreigners. The government is working to develop independent power projects (IPP) and a foreign consortium is set to run the Marib IPP. Yemen is in urgent need of more power capacity, although industry sources say that this could be eased through increasing the efficiency of the national grid, where more than 30 per cent of power is lost.

Table: Economic indicators

($ million, unless stated)