Economy in Yemen

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Economy—overview: The northern city Sanaa is the political capital of a united Yemen and the southern city Aden with its refinery and port facilities is the economic and commercial capital. Future economic development depends heavily on the attraction of foreign investment to diversify the economy. Former South Yemen's willingness to merge stemmed partly from the sharp decline in Soviet economic support. The low level of domestic industry and agriculture has made northern Yemen dependent on imports for practically all of its essential needs. Once self-sufficient in food production northern Yemen has become a major importer. Land once used for export crops—cotton fruit and vegetables - has been turned over to growing a shrub called qat whose leaves are chewed for their stimulant effect by Yemenis and which has no significant export market. Economic growth in former South Yemen has been constrained by a lack of incentives partly stemming from centralized control over production decisions investment allocation and import choices. Yemen's GDP has been supplemented by remittances from Yemenis working abroad and by foreign aid. Since the Gulf crisis however remittances have dropped substantially. Floods in June 1996 caused the loss of much valuable topsoil in the agricultural sector increasing the need for imports of foodstuffs. Oil production and GDP as a whole are expected to increase moderately in 1998.

GDP: purchasing power parity—$31.8 billion (1997 est.)

GDP—real growth rate: 5% (1997 est.)

GDP—per capita: purchasing power parity—$2 300 (1997 est.)

GDP—composition by sector:

agriculture: 15%

industry: 39%

services: 46% (1995)

Inflation rate—consumer price index: 5% (1997 est.)

Labor force: no reliable estimates exist most people are employed in agriculture and herding or as expatriate laborers; services construction industry and commerce account for less than one-half of the labor force

Unemployment rate: 30% (1995 est.)

Budget:

revenues: $2.6 billion

expenditures: $2.7 billion including capital expenditures of $1.1 billion (1998 est.)

Industries: crude oil production and petroleum refining; small-scale production of cotton textiles and leather goods; food processing; handicrafts; small aluminum products factory; cement

Industrial production growth rate: NA%

Electricity—capacity: 810 000 kW (1995)

Electricity—production: 1.85 billion kWh (1995)

Electricity—consumption per capita: 126 kWh (1995)

Agriculture—products: grain fruits vegetables qat (mildly narcotic shrub) coffee cotton; dairy products poultry meat; fish

Exports:

total value: $2.3 billion (f.o.b. 1997 est.)

commodities: crude oil cotton coffee dried and salted fish

partners: China 23% South Korea 19% Thailand 14% Brazil 13% Japan 12% Thailand 7% (1995)

Imports:

total value: $2.3 billion (f.o.b. 1997 est.)

commodities: textiles and other manufactured consumer goods petroleum products foodstuffs cement machinery chemicals

partners: US 12% France 11% UAE 10% Saudi Arabia 7% UK 5% (1995)

Debt—external: $8 billion (1996)

Economic aid:

recipient: ODA $148 million (1993)

Currency: Yemeni rial (YRl) (new currency)

Exchange rates: Yemeni rials (YRl) per US$1—129.158 (1997) 94.157 (1996) 40.839 (1995) 12.010 (official fixed rate 1991-94)

Fiscal year: calendar year

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