Yemen Grapples With Costs of Unification

Border disputes with Saudi Arabia and sharp cuts in aid after Gulf war dim new republic's economic prospects

TWO years after Yemen's north and south unified, this ancient land of the Queen of Sheba is facing a myriad of modern problems in making the union viable.

At the time of unification in May 1990 the situation looked promising for the new republic dominating the entrance to the Red Sea. Oil exploration was going at a frantic pace, and the country already had become a modest oil exporter. In addition, the community of aid-giving nations appeared ready to further help a country that was on the road to democratization and a liberalized economy.

Perched on the southwestern corner of the Arabian Peninsula, Yemen had been divided for three centuries, its last 25 years of separation pitting the pro-Western North against the Marxist South. Open warfare broke out in 1972, followed quickly by an Arab League-brokered cease-fire and an agreement to unify. But it was not until Soviet influence in the Middle East waned with the end of the cold war that north-south hostility fully eased and the Yemen republic was established two years ago today.

The new Sana-based government laid out a 30-month transitional period as a precursor to the country's first multiparty elections this November. Optimism was strong, but the Gulf war changed the whole picture.

While the Yemeni government's reasons for choosing to side with Iraq can be debated, the effects cannot. Foreign aid, primarily from the Saudis, was reduced from $560 million in 1989 to $390 million in 1990, and Saudi Arabia sent back an estimated 800,000 Yemeni migrant workers. Unemployment increased by more than a third and is expected to rise to 40 percent, according to government statistics, leaving an economy already burdened by unification additionally strained. Yemen's fragile democracy

To outsiders and its inhabitants, Yemen appears to be on a precipice. If political and economic reforms gain headway, Yemen could be on its way to a prosperous and possibly influential future in the region. But both internal and external pressures could bring down the fledgling democracy.

The two Yemens were each under one-party rule after their revolutions in the 1960s. Unification brought a legalization of political parties, of which there are at least 38, ranging from religious conservatives to radical leftists.

The former communists from the south are now the Yemen Socialist Party (YSP), the junior partner in the new government to President Ali Abdullah Saleh's People's General Congress (PGC). Relations between the two governing parties have been contentious and the YSP is unpopular in the north.

"Unity has shifted the bases of power," explains Abdulaziz Saqqaf, professor of finance at Sana University. "So now no one group can control the country by itself."

The PGC, even when it was the only party in North Yemen, had to rule by consensus. And although it has established a military presence in most regions, it still has to contend and negotiate with the powerful voice of the autonomous tribes in the north.

Dissatisfaction with the status quo is readily apparent. Newspapers decry corruption in the government. Students who supported unity and reform complain that their living standards have fallen.

But the most powerful sign that all is not well is the increase in political violence. The government has tightened security after several attacks on officials this year, the most recent of which was a May 15 bomb blast near the house of Prime Minister Haidar Abu Bakr al-Attas, the former president of South Yemen.

Late last month Minister of Justice Abdel Wasseh Salam was wounded by unidentified gunmen. This drew Mr. Saleh's response, quoted in the Yemen Times, "There are some premeditated efforts to disrupt the system and create chaos ... in order to deprive us of the fruits of our achievements."

And earlier this year the YSP spoke out in its official newspaper, Al-Thawri: "Something should be done quickly to stop the assassinations of YSP leaders and members. Our party is capable of retaliating but it does not want bloodshed."

Professor Saqqaf sees the violence coming from quarters who fear losing out in a united Yemen. "The existing power brokers are pressuring the leadership to allow them a piece of the post-election scene," he says.

But there is confusion about who is organizing the attacks and few arrests have been made.

"We cannot accuse [anyone] unless we have proof, and we don't have any," says a PGC member of parliament.

Saudi Arabia has a vested interest in Yemeni politics: The monarchy does not want a powerful Yemen to threaten its supremacy of the peninsula and legitimacy at home.

"We are building a democratic experiment," explains an analyst at the Yemen Institute for Studies and Research. "Our neighbors are worried and arm certain groups," he says, referring to Saudi funding of Yemeni bedouins and tribal groups to keep them independent of Sana.

The Saudis are also reawakening old border disputes in areas where Yemeni oil exploration is under way, telling foreign oil companies in Yemen to stop their activity. Islamic law contended

The question of a legal system has not been settled. The two ruling parties agreed that sharia (Islamic law) will only be a principle, and not the basis of law. This issue has subsequently become a bone of contention, as the religious leaders of the north demand sharia for the whole country and abhor the secular south.

Al-Islah, the religious party second only in influence to the PGC, has formed committees to resist the Constitution, which was approved in a nationwide referendum last year. This issue promises to be explosive when it comes to decision making time.

But while things may look grim, Yemen also has many assets that may keep it from descending into the chaos experienced by Somalia, Afghanistan, and Lebanon - countries to which it is often compared.

* Yemeni nationalism is fairly strong; it provided the base for a speedy and up to now successful unification.

* Saleh is still firmly in control, the YSP seems for the moment to be paralyzed by infighting. And the most powerful sheik in the north has constantly supported him.

* The government's ambitious reform recognizes the problems within the economy and bureaucracy and what needs to be done to eradicate them.

* Most important, though, is oil. Oil appears to be the only savior for an economy in crisis.

Unification has allowed for increased exploration along the former border between the north and the south. The country is pumping out 220,000 barrels per day and this is expected to rise to 350,000 barrels per day by 1995. If the Saleh government can improve living conditions, dissent can be minimized.

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