Gross National Product (GNP): $8.18bn

Exchange rates against the US$ over the last year: 178 Yemeni rials (174.3)

SCORE CARD

World GNP ranking: 93rd GNP per capita: $450 Balance of payments: $1.11bn Inflation: 15.9% Unemployment: 30%

Strengths

Rising oil production. Salt mining. Deposits of copper, gold, lead, zinc, and molybdenum. Industries include oil refining, chemicals, foodstuffs, cement, leather. Improving private sector.

Weaknesses

Political instability deters foreign investment. Damage caused by civil war. Well-organized black market undermines tax base. Subsistence agriculture. High population growth, leading to unemployment. Lack of central control, poor integration, and patronage politics hamper economic revival.

Profile

Unification in 1990 aimed to transform the economy, particularly through the exploitation of large oil and gas reserves, discovered in 1984; exports of oil began in 1987. Industrial investment around Aden was planned. These policies were severely affected by the 1990–1991 Gulf War. In addition, the expulsion of over one million Yemeni guest workers from Saudi Arabia imposed a huge burden on the economy, boosting unemployment and ending the flow of workers' remittances.

The 1994 civil war seriously damaged oil refineries, water systems, and communications centers. Economic crisis forced the government to reduce expenditure and subsidies on certain staple foods. This provoked widespread civil unrest – there were particularly violent demonstrations in 1998. Many farmers switched from food crops, such as wheat, to growing the more profitable narcotic plant qat, forcing Yemen to import food supplies. Strong oil prices in recent years and IMF-backed "streamlining" have encouraged substantial foreign debt relief.

EXPORTS

IMPORTS

ECONOMIC PERFORMANCE INDICATOR

From "The Financial Times World Desk Reference" © Dorling Kindersley 2004