Road to recovery

Yemen’s feudalistic tribal traditions are still holding it back, but underneath the surface there’s hope for the Gulf’s poorest nation.

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By  John Irish Published  February 4, 2004

|~|YEMEN-TRIBES-46.jpg|~|A Yemeni farmer keeps a close eye on his Qat crop.|~|Come to Yemen. Land of the free, land of beauty and land of history. This could well have been the tag-line of a tourism brochure at the time of the Queen of Sheba, but in this day and age it sounds more like dinner table conversation. The reality is that in 2004, Yemen remains one of the poorest nations in the world. It is better known for tribal kidnappings, terrorist cells and a population with an unquenchable thirst for the hallucinogenic crop, Qat. It is difficult to find a country that has had as much of a self-destructive instinct as Yemen has had since the North and South unified in 1990. From ostracising its regional neighbours to neglecting the outside world, Yemen for all intents and purposes remains very much a modern day example of Arabia’s past. Patriarchy still prevails. There’s tribal hegemony in the provinces. So much so that in the 1990s, the government was forced to acquiesce to tribal leaders’ demands in return for intrepid travellers, who’d ventured a little too far from the tourist trail. Even the sites, sounds and smells relate more to earlier centuries than those of modern metropolises found across the Gulf. Cut to the 21st century and the picture still doesn’t look good. As the GCC’s construction industry booms, tourism expands and oil production rockets, Yemen continues to be its ‘forgotten man’. One UAE businessmen even described it as “a shameful irritant to the region.” Dig a little deeper and evidence backs up the theory that Yemen is struggling to break out of its gloomy predicament. ||**|||~|2676529.jpg|~|Government education plans are targeting women first.|~|Recent statistics released by the World Bank and Yemen’s Central Statistics Organisation make for uncomfortable reading. The year following unification in 1991, its annual GDP was only 2.7%. In 1995, it rose to 12.5%, predominantly due to oil production, but move to 2002, and the figure dropped to 3.6%. The Yemeni government’s draft budget predictions for 2004 suggest a further fall to 3.3%. Additionally, inflation in 2003 was at 12%. “Economic growth was certainly lower than they [the government] expected,” says Robert Hindel, the World Bank’s country manager in Yemen. “For a country like this to really progress, we want to see a growth rate in the 6-7% range. Really they have a long way to get there.” Nevertheless, economists are cautiously optimistic about Yemen’s future. The fact that it has been able to raise foreign currency reserves to over US$ 5 billion, and that the budget seems balanced and achievable indicates a fairly good management of the economy. Ratings agency Capital Intelligence recently upgraded the Gulf state’s foreign currency ratings to B from C. The reasons, the agency said, were down to “strong improvements in external solvency, international liquidity and government debt ratios.” Much of that was due to debt relief and high oil prices. Italy for instance wrote off $16 million in debt, with the provision that it went into development projects. “There’s nothing to say that the present high price of oil will remain where it is,” warns Hindel. “Yemen depends on oil royalties for about 85% of its budget revenues, which is obviously very serious.” More worrying, he adds, is the fall in oil production over the last three years. Output from Yemen’s main Al Riyan and Ma’rib oil fields are declining and expected to deplete rapidly from 2006. ||**|||~|yem2.jpg|~|Boys to men: Ordinary Yemenis were the first to vote in presidential elections in the Gulf, but Qat consumption continues to be a problem. |~|The government must act now before it is too late. Hindel is urging it to take advantage of the current solid platform, where it does have some financial flexibility to take subsidy policy decisions. He suggests revamping the tax systems on diesel fuel, for instance, to create alternative oil royalties. Compounding the relatively low GDP is the high population growth. Estimates place it anywhere between 3-4% per annum, almost 2% more than the average population growth of other low income countries. This suggests that even if it were able to establish a reasonable economic growth rate, the Yemeni government would find it almost impossible to meet the needs of the people. Almost 50% of Yemenis are under the age of 15 and illiteracy is high. Girls are less likely to attend school, usually dropping out at an early age. Three quarters of the population live in rural areas, where the lack of water, work and sanitation is increasingly leading to urbanisation. An additional burden is the millions of expatriate Yemenis, who returned to Yemen from the Gulf in 1990, after the government opted to support Saddam Hussein’s invasion of Kuwait. At that time not only did a large source of revenue in remittances dwindle, but also a relatively unskilled labour force entered an already complex market. “These people didn’t go back to the villages, but to the towns and cities, expanding them and turning them into ghettos,” says Dr Aboubakr Badawi, vocational specialist at the International Labour Organisation in Kuwait. “Meanwhile many had worked in low skilled jobs within the GCC, so the skills they could offer were of no use in Yemen. They became more of a burden, than a valuable source of development.” At the moment, the government considers unemployment a side issue, despite estimates ranging between 14%-36%. According to Hindel the focus is on getting the economy moving. Historically, Yemen was renowned for a healthy agricultural industry. However, agriculture in 2002, made up a mere 15% of GDP, with exports mainly heading towards the GCC countries. ||**|||~|YEMEN-CULTURAL CAPITAL-45.jpg|~|Yemen is waiting to become Arabia's cultural capital.|~|The spectre that hangs over it is Qat. Grown predominantly in the mountains, this hallucinogenic plant is deeply rooted in Yemen’s society and threatens to block its progress. As a crop it has not actually displaced other agriculture, because it must grow at high altitude and the areas where it does grow are not conducive to other export crops. “Qat is a social and economic problem,” says Professor Hussein Al Amri, member of the Shura Council. “The scarce water we have is needed for agriculture, but it goes into Qat. At the same time, more than 1.5 million people, nearly 20% of the population relies on the production of Qat for their income.” Robert Hindel goes one step further. He says that not only is it a water intensive crop, but it also has negative social implications, distorting family budgets among the poor. Estimates put the consumption of Qat as high as 90% among the male population. “According to some research we’ve done, if everybody stopped chewing Qat tomorrow, the poverty rate would drop by six percentage points. The other point is the there are clearly negative health implications.” Both Hindel and Amri agree on one thing. Qat is holding the nation back, but the government is not serious enough to pull the lid on something that is entrenched in Yemeni society. “Yemen, I think, is not yet ready to acknowledge the seriousness of the problem, but then some say if they did, Yemenis would revolt.” ||**|||~|2676529.jpg|~|While there are fundamental flaws in Yemen's economic, social and legislative structures, more freedom is appearing.|~|However, over the last two of three years, the Yemeni government has begun to confront many of its the problems head on. It appears committed to structural reform. Al Amri, is keen to stress how much so. “Things are going well. The government and the Shura Council are taking serious measures. We have come up with a plan until 2020 that covers everything from poverty to education and the economy,” explains Al Amri proudly. The fact that Yemen is just one of ten low income countries to qualify for the Fast Track Initiative (FTI), which rewards nations that have demonstrated their commitment to enhancing educational systems and eliminating gender parities, highlights this. By proving itself here, the state is gradually gaining the confidence of the international community. The Netherlands, for instance, put up over $200 million as part of the FTI Catalytic Fund. Education is one of Yemen’s greatest challenges. The simple fact is that women who go to school, are more likely to prepare their offspring for education. Once you educate girls, there is a greater likelihood that infant mortality rates will fall (they currently stand 85 deaths per 1000), but equally significant, so will birth rates. “Yemen has a well thought out strategy which is showing results in terms of getting kids to school and changing the curriculum to the modern world,” explains the World Bank’s Hindel. “It’s positive and the international community has given some money to help it with its implementation strategy.” At a policy level, the ILO’s Badawi believes Yemen still suffers from too much bureaucracy and a lack of coordination between ministries. He cites the Ministry of Labour, the Ministry of Vocation and Education and the Social Development Fund as being the most evident examples of this. “Take into consideration the fact that Yemenis do not coordinate much anyway, so when you separate them, there is no coordination whatsoever, in fact there’s even rivalry.” Much of this stems from Yemen’s tribal make up. To this day the tribes are extremely powerful. However, if the government is making inroads it is in creating a form of political pluralism and democracy. “Yemen is much more democratic than Saudi Arabia, but also more so than Egypt and the Gulf states, says William Rugh, former US Amabassador to the Gulf state. “You’d have to go to a place like Lebanon to find a more democratic system than Yemen. I observed one national election and it seemed free and fair. The public was sufficiently aware of how to vote and how to deal with the problems of voting, that it looked as though the system was working and that the vote counting was very carefully done.” Although he points out that the President has never lost an election and that his majority increased since the 1990s, he puts that down to a lack of education and a disorganised opposition rather than government interference. “There is an opposition and the press is fairly lively. All that leads to some quite open criticism of the President and the government, so it’s a criticism that in a little over a decade has gone a long way in creating some representative form of government.” Rugh adds that a careful manipulation of the system by the President’s party is holding back further development. “Often [the government] will persuade opposition politicians to run, for example, as independents rather than as opposition, and so when they get into government, they vote for the government party. It’s that kind of manipulation of the system, but it’s not necessarily an illegal or undemocratic system,” concludes Rugh. Badawi agrees to a certain extent. He says that outside the cities, tribes still hold a great deal of influence. However, the government is attempting to incorporate them into national politics. “The parties do have a say and do what they want, but for normal Yemenis there is not so much freedom. There is an elite type of freedom, for the heads of tribes and main opposition parties,” he adds. Yemen has moved on from ten years ago. It was a pariah in global and regional politics. As it continues to show commitment, it is more likely the international community will assist it. The government is attempting to create an environment that may appeal to foreign investors, although that will take time. Perhaps, revival of the tourism industry will lead the way. Its relations within the GCC have also improved. Although, it very much sees itself as part of the Council, the rich man’s club still does not feel Yemen is ready to enter, be it for economic or political reasons. It has, however, received encouragement by joining the Gulf’s agricultural council and is deemed an associate member of the GCC. Relations with Saudi Arabia have also improved. The border issue has been resolved and Saudi’s bullying tactics of the 1980s have receded. In many ways, Yemen’s semblance of political pluralism may be the root of its awkward relations with the rest of the GCC. There is also a desire for legislative and social change that make the government more accountable to the Yemenis. Ultimately, however, Qat remains a curse. While Yemen is moving in the right direction, it seems to be one of the major constraints to economic and social development. Until the issue is resolved, Yemen will continue to find it difficult to bridge the gap with its GCC neighbours and move itself out of the poorest league of nations. ||**||

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