North Yemen oil find may enliven politics

In ancient times, North Yemen was known as Arabia Felix, or ''Happy Arabia,'' because of the lucrative spice and incense trade there. Now that oil has been discovered in this mountainous country of 8.5 million people, there is hope it may recover some of its ancient prosperity.

But whether the land becomes happy again is another matter. North Yemen has a history of political instability and is flanked by troublesome neighbors, Saudi Arabia and South Yemen.

The extent of the oil field is still unclear. The North Yemeni government announced in July that ''promising quantities'' of oil had been discovered in a desert region 125 miles east of the capital of Sana, near the Saudi border. Production from an initial test well drilled by the American-based Hunt Oil Company comes to about 7,800 barrels a day.

Oil wealth would be welcome in impoverished North Yemen. Most people still live in isolated mountain villages. Official per capita income is only $460, although unreported income from remittances of North Yemenis working abroad and other sources probably raises the figure a good bit.

The government of Col. Ali Abdullah Saleh survives on foreign aid handouts. If North Yemen does begin producing oil, the country might at least reduce its balance-of-payments deficit, which was $550 million last year.

But even a major oil find would not bring immediate help because North Yemen lacks the facilities to handle it. There are no paved roads in the region where Hunt is drilling. There are no refineries in the country, and no pipeline is available to transport the crude.

Dan Edwards, Hunt's general manager in Sana, says his company would be willing to invest in facilities in the event of a major find. But building them would take time.

Over the long term, regional rivalries could hinder oil operations. Every so often there are shooting incidents on the border because Yemeni tribes smuggle goods in from Saudi Arabia to avoid Yemeni import taxes. It takes little to excite Yemeni paranoia of the Saudis. It is well known in the country that the Saudis subsidize many Yemeni tribes with money and arms. The Yemenis suspect the Saudis of coveting their territory.

Unfortunately for the Yemenis, their economy is almost totally dependent on the Saudis. Anxious to maintain North Yemen as a buffer state against the Marxists in South Yemen, the Saudis have become the country's biggest aid donor, funding schools, hospitals, and development projects.

Saudi Arabia's indirect leverage is even greater. Since North Yemen's exports cover only 1.2 percent of its annual $2 billion import bill, the country depends on workers' remittances. Three-fourths of the 1 million Yemenis abroad work in Saudi Arabia. Oil wealth could help lessen North Yemen's dependence on the Saudis. But the Saudis would not welcome that; they fear a united, rich Yemen on their southern flank.

North Yemen also faces a tense situation on its frontier with South Yemen, where the two nations have never agreed on boundaries. Oil wealth in North Yemen could provide the southerners with an irresistible temptation to meddle in northern affairs.

The writer recently traveled in North Yemen.

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