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The Economic Activity of Yemen

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Contrary to popular beliefs, Yemen is not like other oil-dependent economies basking in wealth and surpluses. In fact, all of its oil will be spent come 2017, and so Yemen’s economic problems would surely worsen by 2017 if they cannot find new sources of income by that time now. Currently, Yemen’s dependence on oil, contributes about 70 to 75% of government revenue. And without oil to draw income from, surely 70 to 75% of income is a great challenge for Yemen.

Aside from Oil, Yemen also have strong points in other fields aside from oil production. Yemen seems to be doing well also in the oil refining business. They also manufacture food products, beverages, flour and cooking oil which all have been increasing in recent years. Yemen’s aiding of Iraq during the Gulf War also has considerably caused the economy to collapse. As an aftermath to that, Saudi and Kuwait have both reduced economic aid to Yemen. Saudi had even expelled about a million Yemeni workers causing unemployment to spike up. Right now, unemployment figures stands at 35%. With its 23.5 million-strong population, a 35% unemployment rate would mean that around 8 million plus Yemenis are bereft of a decent income.

Another bad thing about Yemen is that it has no popular drive to develop its tourist destinations. Sadly, UNESCO has even identified four sites to be a World Heritage Site. With so many good things to see in the country, surely, tourism could become an income generating sector for Yemen.  What’s worse is that kidnapping of foreign nationals is rampant and facilities like hotels and restaurants are below international standards.

However, one glimmer of hope in Yemen may rely on its agricultural lands. Usually, neighboring oil-rich countries may have lots of oil reserves but don’t have lands to cultivate plants on. Yemen has large arable lands that can sustain an economy and so all hope is not gone come 2017. If farmers can desist away from qat production and turn to high value exportable crops, for sure, in the years to come when the oil fields from neighboring countries have been depleted, Yemen will once again become the economic power in the region like it was in ancient times.