Yemen’s crisis is one of many

26 May 2010

Country should be a business opportunity not a security threat

Over the past 50 years, the Arabian peninsula has been transformed. Tribal communities have developed into nations, and their economies have developed from nomadic subsistence into some of the wealthiest in the world.

The growth seen in energy-rich states such as Saudi Arabia, Qatar and the UAE has been driven by major upstream hydrocarbon developments that give governments billions of dollars of revenues each year. And latterly the focus has been on huge real estate and construction developments, such as the Burj Khalifa in Dubai, to promote diversification and a future less reliant on energy exports.

Sanaa faces a cash crisis that can only be solved with the help of its wealthy neighbours

But not all countries have prospered, chief among them is Yemen. Even ostensibly poorer and more populous states than those of the Gulf, such as Algeria, Egypt and Libya, have attracted more investment and created more jobs.

Today, the poverty of the Yemeni population is unmatched anywhere else in the Arab world. More pressingly, Sanaa faces a cash crisis that can only be solved with the help of its wealthy neighbours. In turn, their security will be at stake if they do not intervene swiftly and confidently. Sanaa could be effectively bankrupt within a year.

Once Yemen’s finances have been shored up, the Gulf and other Arab states must use their own experience in nation-building to advise the government on how best way to forge a future where oil and gas are not essential to its current account. This involves better governance, economic management and, crucially, a new class of technocrat, which simply does not exist today.

The latter project will not take weeks, months, or years, but decades. If Yemen can manage this transition, it will become a business opportunity and trading partner for its neighbours, rather than a security threat.

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