Yemen, a country on the southwestern corner of the Arabian Peninsula, has been the center of commerce in the region since ancient times when it was a source of myrrh, frankincense, and spices. As a result, the ancient Egyptians started expeditions to the region in the 25th century b.c.e., and interest in the region continued so much so that the Roman emperor Augustus tried to take the region, and the Ethiopian kingdom of Aksum held it from about 520 c.e. until 570 c.e., when the Sassanian Persians took it. After the emergence of Islam, the region came under the control of the Arab rulers and was run by the Ottoman Turks. The famous Chinese admiral Zheng He (Cheng Ho) made a point of visiting Yemen in 1421.
Because of its geographical position, in 1839 the British occupied Aden, a natural port at the southern end of the Red Sea. It grew in importance after the opening of the Suez Canal in 1869, and the British continued to hold Aden, making it a major port in the global economy. Heavily garrisoned by the British, most non-French passenger ships going through the Red Sea and Suez Canal stopped at Aden (the French used Djibouti). During the British period of running Aden, a number of important trading companies were based there including Beese, with British Petroleum having a refinery in Aden, and there were also many companies supplying British troops and providing supplies for passengers passing through the port. With a massive upsurge in nationalist attacks on the British, they were finally forced to withdraw in 1967. With the decline in the use of passenger ships by the early 1970s, the importance of Aden dramatically declined. Yemen was divided between North Yemen and South Yemen until they were formally reunited on May 22, 1990.
In 1970 South Yemen was renamed the People’s Democratic Republic of Yemen. It was a communist, centrally planned economy and had close political ties to Nasser’s Egypt, the Soviet Union, and the People’s Republic of China. This led to its isolation from the world community. North Yemen—the Yemen Arab Republic—was largely Royalist until reunification. In addition to Aden, the unified country now has a number of important ports including Al Hudaydah, Al Mukha, Salif, and Ra’s Kathib, all on the Red Sea, and Al Khalf and Nishrun on the Gulf of Aden.
Economically, Yemen remains poor. It relies heavily on remittances from Yemenis working abroad and also from foreign aid. The problems with the economy from 1990 were complications that arose from the integration of the communist and the noncommunist system exacerbated by some 850,000 Yemenis returning from the Gulf States after the Iraqi invasion of Kuwait. Yemen sought help from the International Monetary Fund (IMF), and from 1995 with the support of the IMF and the World Bank, it drew up its First Five-Year Plan, which lasted from 1996 until 2000. The Yemeni government has subsequently embarked on many economic and regulatory reforms and has gained praise from the World Bank. A growing number of foreign multinationals have started operating in the country.
In 2008 Yemen had a gross domestic product (GDP) of $2,400 per capita. As much as 63 percent of the workforce remains working in the agriculture sector, although in 2008 it accounted for under 10 percent of the country’s GDP. Eleven percent of the workforce is in industry, generating 52 percent of the 2008 GDP, and 26 percent work in services, resulting in 38 percent of Yemen’s 2008 GDP. The major exports of the country are crude oil from refineries that operate in the country, coffee, and dried and salted fish. The major export destinations are Thailand and China (29 percent each) and India. Imports include food, live animals, machinery, and equipment, with 17 percent coming from the United Arab Emirates, and the other two main sources being Saudi Arabia and Kuwait.
- Leonard Binder, Rebuilding Devastated Economies in the Middle East (Palgrave Macmillan, 2007);
- Kiren Aziz Chaudhry, The Price of Wealth: Economies and Institutions in the Middle East, Cornell Studies in Political Economy (Cornell University Press, 1997);
- Margarita Dobert, “Development of Aid Programs to Yemen,” AmericanArab Affairs (v.8, 1984);
- Kamil A. Mahdi, Anna Würth, and Helen Lackner, Yemen into the Twenty-First Century: Continuity and Change (Ithaca Press, 2007);
- Ragaei El Mallakh, The Economic Development of the Yemen Arab Republic (Croom Helm, 1986).
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