Economical overview
Yemen is one of the poorest countries in the
Middle East. The country's most important source of
income is oil and to some extent natural gas. The oil
industry has previously accounted for two-thirds of
government revenue and 90 percent of export revenue, but
production has dropped dramatically. Several years of
war have had disastrous consequences for the entire
economy.
From the mid-1990s, the government of Yemen had
financial tightening on the program, which the IMF and
the World Bank set as a requirement for its support. But
promised cuts and restructuring were delayed or eroded
by the Yemenites, as they led to popular
dissatisfaction. On several occasions, international aid
grants and loan disbursements were cut or suspended due
to a slow pace of reform.
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Countryaah.com:
Major imports by Yemen, covering a full list of top products imported by the country and trade value for each product category.
Since the Arab Spring of 2011, Yemen's economy has
deteriorated further, mainly in three stages.
Protests and unrest that erupted in 2011 were the
first step. That year, GDP shrank by 15 percent,
according to the World Bank. At the same time, consumer
prices went up about 10 percent a year over the course
of a year, and by almost 20 percent only in 2011.
Step two was caused by a race for the oil price. From
the summer of 2014 until the beginning of 2015, the
world market price was halved. Already in the summer of
2013, before the big price collapse, the Yemeni
government had announced that the country had to pay
more for imported fuel than it received on its sale of
crude oil.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including YEM which represents the country of Yemen.
Then the escalated war situation from 2015 caused oil
and gas recovery to collapse. According to the
cooperative organization IEA, by 2016, oil production
had dropped to only one-eighth of what it was before the
war and natural gas even more. But the third stage also
includes other devastating disruptions to the war, in
particular, fighting and air strikes have paralyzed the
country's ability to bring supplies to its people.
It was thanks to the coffee Yemen was once able to
open a door to the world market. The name of the city of
Mukha was spread throughout the world, to us as "suede".
Coffee cultivation still exists in Yemen's highlands.
Production increased for several years and about half
were exported before the war escalated in 2015. Foreign
aid agencies supported irrigation projects, and the
Yemeni government hoped that the role of coffee for the
country's economy would increase. However, the large
world market had long ago been taken over by plantation
growers, mainly Latin America. But for the domestic
economy, agriculture is important. It usually accounts
for a smaller proportion of gross domestic product (GDP)
but employs a large proportion of the population.
However, the war has knocked out large parts of
agriculture, and the transport chains,
In the past, Yemen has been able to export
agricultural products on a small scale, essentially
without processing: in addition to coffee, including
fish and hides. Exports have been mainly to Asia, while
other countries in the Arabian Peninsula and the EU have
the largest share of imports. A large part of the trade
has not been included in the official figures due to
smuggling and extensive black market.
An important source of income is money that Yemeni
guest workers in other countries send to their home
country. In 2013, Saudi Arabia tightened visa rules for
foreign workers, which is estimated to have forced more
than 650,000 Yemenites to return home. According to the
World Bank, Yemeni families received $ 3 billion from
abroad in the same year, which corresponds to about a
tenth of GDP. Subsequently, the Saudi government has
taken new steps to strengthen its own economy, and an
additional 200,000 Yemenis have been forced to leave the
country. One historical bracket is that such a mass
deportation of Yemeni guest workers caused difficulties
earlier: in 1990, when the then Sanaa government
supported Saddam Hussein's invasion of Kuwait, Saudi
Arabia punished Yemen with expulsions. There are
believed to have been a million Yemenites who lost their
livelihoods then,
The state's weak grip on society - Yemen's
internationally recognized government controls only
parts of the country - makes it difficult to collect
taxes. The lack of security also hinders development and
frightens foreign investors; several oil companies left
the country after the outbreak of war in 2015 and few
have returned. There is a large black sector and
corruption is widespread. Low wages in public
administration are a reason why government employees
receive money under the table.
Foreign debt was a heavy item in the mid-1990s, but
became more manageable since several lenders wrote down
their claims and thanks to the long-term price of oil.
The debt, according to the World Bank, corresponded to
just over one fifth of GDP in 2013. At that time, the
situation was relatively light, compared to today's when
Yemen's economy has shrunk over a number of years. Now
the outside world is facing the need to contribute to a
huge effort for reconstruction.
In 1999, Yemen gained observer status in the World
Trade Organization (WTO). The negotiations then went on
for a very long time, but in June 2014 Yemen finally
became the 160th WTO member.
FACTS - FINANCE
GDP per person
US $ 944 (2018)
Total GDP
US $ 26,914 million (2018)
GDP growth
-2.7 percent (2018)
Agriculture's share of GDP
4.0 percent (2018)
Manufacturing industry's share of GDP
3.8 percent (2018)
The service sector's share of GDP
13.5 percent (2018)
Inflation
14.7 percent (2019)
Government debt's share of GDP
64.8 percent (2018)
External debt
US $ 7,186 million (2017)
Currency
Yemeni rial
Merchandise exports
US $ 473 million (2016)
Imports
US $ 6,798 million (2016)
Current account
- US $ 2,419 million (2016)
Commodity trade's share of GDP
40 percent (2018)
Main export goods
crude oil, oil products
Largest trading partner
IKina, Thailand, India
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