This conference discussed the following points:
- Public finances and the economy: what are the prospects beyond oil and gas?
- What is the impact on public finances of fluctuating oil prices and falling production?
- How can Yemen’s growing budget deficit and national debt be best addressed?
- Is the elimination of subsidies politically feasible?
- What can Yemen do to develop a non-oil private sector?
- What are the obstacles?
- What will be the impact of Yemen’s looming water crisis and rapid population growth?
Key points:
- International interest in Yemen suddenly became widespread as a result of the failed bombing of a US airliner over Detroit on December 25 2009, responsibility for which was claimed by al-Qaida in the Arabian Peninsula (AQAP). Yet Yemen faces a complex set of challenges of which terrorism is not the greatest.
- Yemen is not yet a failed state but it exhibits symptoms that could lead to its failure in the near future. Its fast-growing population of 23 million (60% of it under 25) could double within 25-30 years. The poorest of Arab countries also suffers from high levels of unemployment and illiteracy (male 30% and female 70%). Oil, hitherto the main source of state revenue, is running out rapidly, and it has severe water shortages (something which is particularly worrying given 70% of the working population depends on agriculture). It has experienced full-scale armed conflict with al-Houthi rebels in the north, secessionist unrest in the south and is affected by armed conflict in the Horn of Africa. A weak state creates more opportunities for extremists who can take advantage of rugged terrain, a scattered population and instability dating back to the 1960s. However, it took the escalation of the al-Qaida threat to focus international attention on Yemen.
- The London meeting in late January 2010 demonstrated growing international and regional concern about Yemen, but interest needs to be maintained over time. Follow up meetings are planned in the Gulf, and by the newly constituted Friends of Yemen Forum at the United Nations (UN) in September 2010.
