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Economy of Yemen

At unification, both the YAR and the PDRY were struggling, underdeveloped economies. In the north, disruptions of civil war (1962-70) and frequent periods of drought had dealt severe blows to a previously prosperous agricultural sector. Coffee production, formerly the north's main export and principal form of foreign exchange, declined as the cultivation of qat increased. Low domestic industrial output and a lack of raw materials made the YAR dependent on a wide variety of imports.

Remittances from Yemenis working abroad and foreign aid paid for perennial trade deficits. Substantial Yemeni communities exist in many countries of the world, including Yemen's immediate neighbors on the Arabian Peninsula, Indonesia, India, East Africa, the United Kingdom, and the United States. Beginning in the mid-1950s, the Soviet Union and China provided large-scale assistance to the YAR. This aid included funding of substantial construction projects, scholarships, and considerable military assistance.

In the south, pre-independence economic activity was overwhelmingly concentrated in the port city of Aden. The seaborne transit trade, which the port relied upon, collapsed with the closure of the Suez Canal and Britain's withdrawal from Aden in 1967. Only extensive Soviet aid, remittances from south Yemenis working abroad, and revenues from the Aden refinery (built in the 1950s) kept the PDRY's centrally planned Marxist economy afloat. With the dissolution of the Soviet Union and a cessation of Soviet aid, the south's economy basically collapsed.

Since unification, the government has worked to integrate two relatively disparate economic systems. However, severe shocks, including the return in 1990 of approximately 850,000 Yemenis from the Gulf states, a subsequent major reduction of aid flows, and internal political disputes culminating in the 1994 civil war hampered economic growth.

Since the conclusion of the war, the government has entered into agreement with the International Monetary Fund (IMF) to institute an extremely successful structural adjustment program. Phase one of the IMF program included major financial and monetary reforms, including floating the currency, reducing the budget deficit, and cutting subsidies. Phase two will address structural issues such as civil service reform. The World Bank also is present in Yemen, with 19 active projects in 2005, including projects in the areas of public sector governance, water, and education. Since 1998, the government of Yemen has sought to implement World Bank economic and fiscal recommendations. In subsequent years, Yemen has lowered its debt burden through Paris Club agreements and restructuring U.S. foreign debt. In 2004, government reserves reached $4.7 billion.

Current U.S. Government commercial activities are focused on advocating on behalf of U.S. companies, protecting existing American business interests in the country, and diversifying Yemen’s economy toward non-petroleum sectors of the economy.

Following a minor discovery in southern Yemen in 1982, an American company found an oil basin near Marib in 1984. A total of 170,000 barrels per day were produced there in 1995. A small oil refinery began operations near Marib in 1986. A Soviet discovery in the southern governorate of Shabwa proved only marginally successful even when taken over by a different group. A Western consortium began exporting oil from Masila in the Hadramaut in 1993, and production there reached 420,000 barrels per day in 1999. More than a dozen other companies have been unsuccessful in finding commercial quantities of oil. There are new finds in the Jannah (formerly known as the Joint Oil Exploration Area) and east Shabwah blocks.

In November 2005, Hunt Oil’s 20-year contract for the management of Block 18 fields ended. Despite agreement with the Government of Yemen on a five-year extension, the Republic of Yemen Government abrogated the agreement via a parliamentary vote that was not called for in the contract. The U.S.-based Hunt Oil company sued Yemen in a Paris-based International Chamber of Commerce commercial arbitration court in 2005. The court’s decision has been kept confidential, according to both sides’ wishes. Hunt Oil continues to operate in Yemen, although in a much smaller-sized oil exploration block.

Yemen's oil exports in 1995 earned about $1 billion. By 2005, exports had grown to approximately $3.1 billion and comprised roughly 70% of government revenue. Crude oil production has declined steadily in past years due to dwindling reserves, lack of maintenance on some equipment, and a lack of new investment in exploration activities.

Oil located near Marib contains associated natural gas. Yemen’s natural gas reserves are currently being exported in the form of liquefied natural gas (LNG), but plans are underway for Yemen’s gas to fuel several natural gas-fired power plants.

GDP (2007 est.) $22.5 billion.
Per capital GDP (2006 est.): $870.
Natural resources: Oil, natural gas, fish and seafood, rock salt, minor deposits of coal and copper.
Agriculture (est. 12.5% of GDP): Products--qat (a shrub containing a natural amphetamine), coffee, cotton, fruits, vegetables, cereals, livestock and poultry. Arable land (est.)--3%.
Industry (est. 42.8% of GDP): Types--petroleum refining, mining, wholesale and retail trade, transportation, manufacturing, and construction.
Services (est. 43.7% of GDP).
Trade: Exports (2007)--$7.0 billion: crude petroleum, liquefied natural gas, refined oil products, seafood, fruits, vegetables, hides, tobacco products. Major markets--China, Thailand, India, South Korea, United States, Switzerland. Imports (2006)--$5 billion: petroleum products, cereals, feed grains, foodstuffs, machinery, transportation equipment, iron, sugar, honey. Major suppliers--United Arab Emirates, China, Saudi Arabia, Switzerland, Kuwait.
Exchange rate (2009): Market rate 210 rials per U.S. $1. The Yemeni rial (YR) floats freely based on an average of foreign currencies. Since the floating of the YR, the market usually reflects the official rate of exchange.

Geography of Yemen

Location: Middle East, bordering the Arabian Sea, Gulf of Aden, and Red Sea, between Oman and Saudi Arabia Geographic coordinates: 15 00 N, 48 00 E Map references: Asia Area: total: 527,970 sq km land: 527,970 sq km water: 0 sq km note: includes Perim, Socotra, the former Yemen Arab Republic (YAR or North Yemen), and the former People's Democratic Republic of Yemen (PDRY or South Yemen) Area-comparative: slightly larger than twice the size of Wyoming Land boundaries: total: 1,746 km border countries: Oman 288 km, Saudi Arabia 1,458 km Coastline: 1,906 km Maritime claims: contiguous zone: 18 nm in the North; 24 nm in the South continental shelf: 200 nm or to the edge of the continental margin exclusive economic zone: 200 nm territorial sea: 12 nm Climate: mostly desert; hot and humid along west coast; temperate in western mountains affected by seasonal monsoon; extraordinarily hot, dry, harsh desert in east Terrain: narrow coastal plain backed by flat-topped hills and rugged mountains; dissected upland desert plains in center slope into the desert interior of the Arabian Peninsula Elevation extremes: lowest point: Arabian Sea 0 m highest point: Jabal an Nabi Shu'ayb 3,760 m Natural resources: petroleum, fish, rock salt, marble, small deposits of coal, gold, lead, nickel, and copper, fertile soil in west Land use: arable land: 3% permanent crops: 0% permanent pastures: 30% forests and woodland: 4% other: 63% (1993 est.) Irrigated land: 3,600 sq km (1993 est.) Natural hazards: sandstorms and dust storms in summer Environment-current issues: very limited natural fresh water resources; inadequate supplies of potable water; overgrazing; soil erosion; desertification Environment-international agreements: party to: Biodiversity, Climate Change, Desertification, Environmental Modification, Hazardous Wastes, Law of the Sea, Nuclear Test Ban, Ozone Layer Protection signed, but not ratified: none of the selected agreements Geography-note: strategic location on Bab el Mandeb, the strait linking the Red Sea and the Gulf of Aden, one of world's most active shipping lanes

Government of Yemen

Yemen is a republic with a bicameral legislature. Under the constitution, an elected president, an elected 301-seat House of Representatives, and an appointed 111-member Shura Council share power. The president is head of state, and the prime minister is head of government. The constitution provides that the president be elected by popular vote from at least two candidates endorsed by Parliament; the prime minister is appointed by the president. The presidential term of office is 7 years, and the parliamentary term of elected office is 8 years. Suffrage is universal over 18.

President Ali Abdullah Saleh was re-elected to a second term in 2006; the next presidential elections are scheduled for 2013. In the April 2003 parliamentary elections, the General People's Congress (GPC) maintained an absolute majority. International observers judged elections to be generally free and fair, and there was a marked decrease from previous years in election-related violence; however, there were some problems with underage voting, confiscation of ballot boxes, voter intimidation, and election-related violence. Parliamentary elections scheduled for April 2009 were postponed until 2011 by a parliamentary vote extending the members’ term in office to 8 years. In the September 2006 local council elections, the GPC won a majority of seats on local and provincial councils. International observers judged the elections to be generally open and competitive, with another marked decrease in election-related violence.

The constitution calls for an independent judiciary. The former northern and southern legal codes have been unified. The legal system includes separate commercial courts and a Supreme Court based in Sanaa.

Principal Government Officials
President--Ali Abdullah Saleh
Vice President--Abd Al-Rab Mansur Hadi
Prime Minister--Ali Muhammad Mujawwar
Deputy Prime Minister and Minister of Interior--Rashad al-Alimi
Deputy Prime Minister and Minister of Planning and International Cooperation--Abdulkarim Ismael Arhabi
Minister of Defense--Mohammed Nasser Ahmad
Minister of Finance--Numan Salih al-Suhaybi
Minister of Foreign and Expatriate Affairs--Abu Bakr al-Qirbi
Minister of Industry and Trade--Yahya al-Mutawakil
Minister of Justice--Ghazi al-Aghbari
Minister of Oil and Mineral Resources--Ameer Salem al-Aidarous
Ambassador to the United States--Abdulwahab Abdulla Al-Hajjri
Ambassador to the United Nations--Abdullah al-Said

The Republic of Yemen maintains an Embassy in the United States at 2319 Wyoming Ave. NW, Washington, DC 20008 (tel: 202-965-4760).

Type: Republic; unification (of former south and north Yemen): May 22, 1990.
Constitution: Adopted May 21, 1990 and ratified May 1991.
Branches: Executive--president, and prime minister with cabinet. Legislative--bicameral legislature with 111-seat Shura Council and 301-seat House of Representatives. Judicial--the constitution calls for an independent judiciary. The former northern and southern legal codes have been unified. The legal system includes separate commercial courts and a Supreme Court based in Sanaa.
Administrative subdivisions: 22 governorates subdivided into districts.
Main political parties: General People's Congress (GPC), Islah Party, Yemeni Socialist Party (YSP).
Suffrage: Universal over 18.
National holiday: May 22 (Unity Day).

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History of Yemen

Yemen was one of the oldest centers of civilization in the Near East. Between the 12th century BC and the 6th century AD, it was part of the Minaean, Sabaean, and Himyarite kingdoms, which controlled the lucrative spice trade, and later came under Ethiopian and Persian rule. In the 7th century, Islamic caliphs began to exert control over the area. After this caliphate broke up, the former north Yemen came under control of Imams of various dynasties usually of the Zaidi sect, who established a theocratic political structure that survived until modern times. (Imam is a religious term. The Shiites apply it to the prophet Muhammad's son-in-law Ali, his sons Hasan and Hussein, and subsequent lineal descendants, whom they consider to have been divinely ordained unclassified successors of the prophet.) Egyptian Sunni caliphs occupied much of north Yemen throughout the 11th century. By the 16th century and again in the 19th century, north Yemen was part of the Ottoman empire, and in some periods its Imams exerted suzerainty over south Yemen. Former North Yemen Ottoman government control was largely confined to cities with the Imam's suzerainty over tribal areas formally recognized. Turkish forces withdrew in 1918, and Imam Yahya strengthened his control over north Yemen. Yemen became a member of the Arab league in 1945 and the United Nations in 1947. Imam Yahya died during an unsuccessful coup attempt in 1948 and was succeeded by his son Ahmad, who ruled until his death in September 1962. Imam Ahmad's reign was marked by growing repression, renewed friction with the United Kingdom over the British presence in the south, and growing pressures to support the Arab nationalist objectives of Egyptian President Gamal Abdul Nasser. Shortly after assuming power in 1962, Ahmad's son, Badr, was deposed by revolutionary forces which took control of Sanaa and created the Yemen Arab Republic (YAR). Egypt assisted the YAR with troops and supplies to combat forces loyal to the Imamate. Saudi Arabia and Jordan supported Badr's royalist forces to oppose the newly formed republic. Conflict continued periodically until 1967 when Egyptian troops were withdrawn. By 1968, following a final royalist siege of Sanaa, most of the opposing leaders reached a reconciliation; Saudi Arabia recognized the Republic in 1970. Former South Yemen British influence increased in the south and eastern portion of Yemen after the British captured the port of Aden in 1839. It was ruled as part of British India until 1937, when Aden was made a crown colony with the remaining land designated as east Aden and west Aden protectorates. By 1965, most of the tribal states within the protectorates and the Aden colony proper had joined to form the British-sponsored federation of south Arabia. In 1965, two rival nationalist groups--the Front for the Liberation of Occupied South Yemen (FLOSY) and the National Liberation Front (NLF)--turned to terrorism in their struggle to control the country. In 1967, in the face of uncontrollable violence, British troops began withdrawing, federation rule collapsed, and NLF elements took control after eliminating their FLOSY rivals. South Arabia, including Aden, was declared independent on November 30, 1967, and was renamed the People's Republic of South Yemen. In June 1969, a radical wing of the Marxist NLF gained power and changed the country's name on December 1, 1970, to the People's Democratic Republic of Yemen (PDRY). In the PDRY, all political parties were amalgamated into the Yemeni Socialist Party (YSP), which became the only legal party. The PDRY established close ties with the Soviet Union, China, Cuba, and radical Palestinians. Republic of Yemen In 1972, the governments of the PDRY and the YAR declared that they approved a future union. However, little progress was made toward unification, and relations were often strained. In 1979, simmering tensions led to fighting, which was only resolved after Arab League mediation. The goal of unity was reaffirmed by the northern and southern heads of state during a summit meeting in Kuwait in March 1979. However, that same year the PDRY began sponsoring an insurgency against the YAR. In April 1980, PDRY President Abdul Fattah Ismail resigned and went into exile. His successor, Ali Nasir Muhammad, took a less interventionist stance toward both the YAR and neighboring Oman. On January 13, 1986, a violent struggle began in Aden between Ali Nasir Muhammad and the returned Abdul Fattah Ismail and their supporters. Fighting lasted for more than a month and resulted in thousands of casualties, Ali Nasir's ouster, and Ismail's death. Some 60,000 persons, including Ali Nasir and his supporters, fled to the YAR. In May 1988, the YAR and PDRY governments came to an understanding that considerably reduced tensions including agreement to renew discussions concerning unification, to establish a joint oil exploration area along their undefined border, to demilitarize the border, and to allow Yemenis unrestricted border passage on the basis of only a national identification card. In November 1989, the leaders of the YAR (Ali Abdallah Salih) and the PDRY (Ali Salim Al-Bidh) agreed on a draft unity constitution originally drawn up in 1981. The Republic of Yemen (ROY) was declared on May 22, 1990. Ali Abdallah Salih became President, and Ali Salim Al-Bidh became Vice President. A 30-month transitional period for completing the unification of the two political and economic systems was set. A presidential council was jointly elected by the 26-member YAR advisory council and the 17-member PDRY presidium. The presidential council appointed a Prime Minister, who formed a Cabinet. There was also a 301-seat provisional unified Parliament, consisting of 159 members from the north, 111 members from the south, and 31 independent members appointed by the chairman of the council. A unity constitution was agreed upon in May 1990 and ratified by the populace in May 1991. It affirmed Yemen's commitment to free elections, a multiparty political system, the right to own private property, equality under the law, and respect of basic human rights. Parliamentary elections were held on April 27, 1993. International groups assisted in the organization of the elections and observed actual balloting. The resulting Parliament included 143 GPC, 69 YSP, 63 Islah (Yemeni Grouping for Reform, a party composed of various tribal and religious groups). The head of Islah, Paramount Hashid Sheik Abdullah Bin Hussein Al-Ahmar, was elected speaker of Parliament, and continues in that capacity. Islaah was invited into the ruling coalition, and the presidential council was altered to include one Islaah member. Conflicts within the coalition resulted in the self-imposed exile of Vice President Ali Salim Al-Bidh to Aden beginning in August 1993 and a deterioration in the general security situation as political rivals settled scores and tribal elements took advantage of the unsettled situation. Haydar Abu Bakr Al-Attas (former southern Prime Minister) continued to serve as the ROY Prime Minister, but his government was ineffective due to political infighting. Continuous negotiations between northern and southern leaders resulted in the signing of the document of pledge and accord in Amman, Jordan on February 20, 1994. Despite this, clashes intensified until civil war broke out in early May 1994. Almost all of the actual fighting in the 1994 civil war occurred in the southern part of the country despite air and missile attacks against cities and major installations in the north. Southerners sought support from neighboring states and received billions of dollars of equipment and financial assistance. The United States strongly supported Yemeni unity, but repeatedly called for a cease-fire and a return to the negotiating table. Various attempts, including by a UN special envoy, were unsuccessful to effect a cease-fire. Southern leaders declared secession and the establishment of the Democratic Republic of Yemen (DRY) on May 21, 1994, but the DRY was not recognized by the international community. Ali Nasir Muhammad supporters greatly assisted military operations against the secessionists and Aden was captured on July 7, 1994. Other resistance quickly collapsed and thousands of southern leaders and military went into exile. Early during the fighting, President Ali Abdallah Salih announced a general amnesty which applied to everyone except a list of 16 persons. Most southerners returned to Yemen after a short exile. An armed opposition was announced from Saudi Arabia, but no significant incidents within Yemen materialized. The government prepared legal cases against four southern leaders--Ali Salim Al- Bidh, HaydarAbu Bakr Al-Attas, Abd Al-Rahman Ali Al-Jifri, and Salih MunassarAl-Siyali--for misappropriation of official funds. Others on the list of 16 were told informally they could return to take advantageof the amnesty, but most remained outside Yemen. Although many of Ali Nasir Muhammad's followers were appointed to senior governmental positions (including Vice President, Chief of Staff, and Governor of Aden), Ali Nasir Muhammad himself remained abroad in Syria. In the aftermath of the civil war, YSP leaders within Yemen reorganized the party and elected a new politburo in July 1994. However, the party remained disheartened and without its former influence. In 1994, amendments to the unity constitution eliminated the presidential council. President Ali Abdullah Saleh was elected by Parliament on October 1, 1994 to a 5-year term. In April 1997, Yemen held its second multiparty parliamentary elections. The country held its first direct presidential elections in September 1999, electing President Ali Abdullah Saleh to a 5-year term in what were generally considered free and fair elections. Constitutional amendments adopted in the summer of 2000 extended the presidential term by 2 years, creating a seven-year presidential term. The constitution provides that henceforth the President will be elected by popular vote from at least two candidates selected by the legislature. The amendments also extended the parliamentary term of office to a 6-year term, with the next elections occurring in 2009. On February 20, 2001, a new constitutional amendment created a bicameral legislature consisting of a Shura Council (111 seats; members appointed by the president) and a House of Representatives (301 seats; members elected by popular vote). In April 2003, the third multiparty parliamentary elections were held with improvements in voter registration for both men and women and in a generally free and fair atmosphere. Two women were elected. In September 2006, citizens re-elected President Saleh to a second term in a generally open and competitive election, although there were multiple problems with the voting process and use of state resources on behalf of the ruling party.

People of Yemen

Unlike other people of the Arabian Peninsula who have historically been nomads or seminomads, Yemenis are almost entirely sedentary and live in small villages and towns scattered throughout the highlands and coastal regions.

Yemenis are divided into two principal Islamic religious groups: the Zaidi sect of the Shi'a, found in the north and northwest, and the Shafa'i school of Sunni Muslims, found in the south and southeast. Yemenis are mainly of Semitic origin, although African strains are present among inhabitants of the coastal region. Arabic is the official language, although English is increasingly understood in major cities. In the Mahra area (the extreme east), several non-Arabic languages are spoken. When the former states of north and south Yemen were established, most resident minority groups departed.

Nationality: Noun and adjective--Yemeni(s).
Population (July 2007 est.): 22,230,531.
Annual growth rate: 3%.
Ethnic group: Predominantly Arab.
Religions: Islam, small numbers of Jews, Christians, and Hindus.
Language: Arabic.
Education: Attendance (2004 est.)--80% for boys at the primary level and 50% for girls. Attendance was 55% for boys at the secondary level and 22% for girls. Literacy (2004 est.)--50% overall, including 70% of males, 30% of females.
Health: Infant mortality rate--76/1,000 live births. Life expectancy--62 years.
Work force (by sector): Agriculture--53%; public services--17%; manufacturing--4%; construction--7%; percentage of total population--25%.