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Yemen: Never mind Anwar al-Awlaki, the economy is a bigger threat

A 75 percent drop in Yemen government revenue and other woes is making it harder to pacify a restless public with subsidies and ensure cooperation in remote tribal areas – including ones where cleric Anwar al-Awlaki and other militant types are believed to be living.

By Sarah A. TopolCorrespondent / May 13, 2010

People play cards as they sit along the roadside in the southern Yemeni port city of Aden on Thursday. Anwar al-Awlaki might inspire some terrorist attacks but the economy may be a more likely cause.

Khaled Abdullah/Reuters

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Sanaa, Yemen

The Times Square bombing was a reminder of the potential cleric Anwar al-Awlaki and others in Yemen have to inspire terrorist attacks. But academics and financial analysts who have spent time in the country lately say that a faltering economy, not militants, poses a greater threat to Yemen's stability.

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Steadily rising prices in what was already the Arab world’s poorest country is fomenting discontent and disrupting the patronage networks that have kept the state intact, they say. The central government faces a growing secession movement in the south, restless Houthis in the north, and a regional Al Qaeda branch that claimed responsibility for the failed Christmas Day bombing in Detroit.

“None of these issues are going to be the ones that overwhelm or destroy Yemen; it’s the economy,” says Christopher Boucek of the Carnegie Middle East program in Washington. “If you look at the way the Yemeni government has ruled, it’s been through the politics of personal relationships, through corruption, through patronage... As the amount of money that the central government has slowly gets to be smaller and smaller the government will have less ability to maintain control.”

Anger at the government from citizens is palpable. “The biggest problem in Yemen is the government – they are thieves,” spits Maher, a law student who drives a taxi on the side. He has seen discontented neighbors turn to radicalism. “People are joining Al Qaeda because the government isn’t doing anything for them, so they join easily.”

Government revenue fell 75 percent

Yemen relies on oil revenues, which account for 80 percent of the state’s budget, to stay afloat. Oil money has allowed the government to subsidize basic goods, pay public sector salaries, and ensure cooperation in remote tribal areas – including ones where Al Qaeda in the Arabian Peninsula (AQAP) is believed to operate. But the country’s oil reserves are projected to run out by 2017.

To make matters worse, Yemen fell into a financial crisis about 18 months ago. In the first quarter of 2009, the government’s revenue fell by 75 percent over the previous year, said Ginny Hill, on a research trip here for the London-based think tank Chatham House.

“It was at that point that the government began to realize that there might be something at stake here that needed to be addressed,” she said, adding that the full scope of the crisis has since become clearer.

Effects of 10-point plan not trickling down yet

In August, President Ali Abdullah Saleh – whom the US is leaning on to rein in AQAP militants – approved a 10-point plan to reverse the country’s downward spiral. President Obama lauded the plan for what it would do to fight corruption, improve the rule of law, and create economic opportunities.

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