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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.

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The plan, which has been criticized by some as superficial and populist, was to be phased in over two years. But nine months on – and two-foiled terrorist plots later – its effects have yet to be felt by people like Umm Ali al-Bahri.

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She has been waiting since 6 a.m. for a canister of cooking gas; now, it’s almost noon. As the temperature in Yemen’s capital climbs into the 90s, the older woman squats on a curb in the scant shade across from the delivery point, along with dozens of others. “They said it’s going to come, but we are still waiting,” she laments, “it’s like this every week and prices keep going up.”

It’s no better for merchants such as Saleh Abdullah, who has worked in a fruit stall here for 25 years. “Business is not good these days, the prices are very expensive for everything,” he says. “I don’t know why, the local things and imported things are very expensive.”

The Yemeni rial has lost more than 10 percent of its value against the dollar this year.

Cautiously, government weans Yemenis off subsidies

The international community has put increasing pressure on the Yemeni government to solve the economic crisis by reducing domestic energy subsidies – a measure already in the 10-point plan. Subsidies consume almost a third of the budget and encourage overuse and smuggling.

In early May, the government raised the price of gasoline and kerosene for the second time this year.

Jalal Yaqoub, deputy minister of finance, told the Monitor the government would continue to decrease subsidies gradually every three months to avoid social unrest. In 2005, riots erupted when the government announced it would slash subsidies, leaving at least 35 people dead.

Another point in the plan is to hire 100 new Yemeni government officials and place them in key positions in ministries to streamline government operations and disperse internationally pledged aid money, only a tiny fraction of which has been used.

“Our most important plan, our secret weapon: to bring in good people into the government,” says Mr. Yaquob, the plan’s architect. But the government is still only in the headhunting phase for those positions.

“Does the government really have a plan?” asks a senior official working in economic development in Yemen who did not want to be named for fear of backlash. “It’s focusing on 10 elements, which focus on quick gains ... It’s not very well thought through. It’s presented in a very populist way, in order to make quick wins.”

Perhaps those quick wins, he added, can build public confidence in the government.

'We are fighting life'

Yemen’s population of 23 million is set to double in the next 20 years and unemployment stands at 35 percent. Every year roughly 250,000 new university graduates flood the job market, with few landing a position.

So many young people find themselves in the position of Mohammad Abdul Magid, a teenager sitting on a plastic chair in front of a poultry shop. One of twelve children, he and his five brothers support their family by selling qat, a legal mild narcotic consumed in Yemen. “The money just isn’t enough,” he says, “We can’t afford meat. On Fridays, we buy one chicken for the whole family.”

Throughout the country, “the Yemeni government’s authority and legitimacy in power will continue to recede as finances recede,” says Dr. Boucek of Carnegie. “It’s the ... chaos of absence of state authority or state legitimacy, that breeds the kind of problems that we are going to need to focus on in the future.”

But in the Sanaa market, Mr. Abdullah the fruit seller isn’t thinking about networks of patronage or a breakdown of authority; his main concern is just living through turbulent economic times. “We are fighting life, trying to do our best. You know how Yemenis do,” he grimaces before turning back to his stall.