Yemen flag

Yemen country brief

Overview

The Republic of Yemen is an Arab country occupying the southwestern to southern end of the Arabian Peninsula. It is bordered by Saudi Arabia to the north, the Red Sea to the west, the Gulf of Aden and Arabian Sea to the south, and Oman to the east.

Of Yemen’s 200 islands, the largest is Socotra, about 354 km to the south of mainland Yemen.  Yemeni unification took place on 22 May 1990, when the Yemen Arab Republic in the North was united with People’s Democratic Republic of Yemen in the south, forming the Republic of Yemen under the continued Presidency of North Yemen’s President Ali Abdullah Saleh.  A secessionist movement in the former South Yemen led to a brief civil war in 1994, and although now more subdued, southern secession remains an issue in Yemeni politics, most recently as part of Yemen’s current political transition process (see below).

Yemen is divided into 20 governorates, the largest of which is Hadramawt, with approximately 37 percent of the country’s total land area.

The majority of Yemen's population is divided into tribal groups, especially in the northern areas of the country where 85% of local residents belong to various tribes.

Yemen’s population of 26.7 million (2013) has more than doubled since 1975 and has grown over 35 percent since the 1994 census, making Yemen the second most populous country on the Arabian Peninsula. Adding to the growth of the native population is the influx of Somali refugees into Yemen.

Political overview

Throughout 2011, Yemen experienced ongoing civil unrest due to dissatisfaction over corruption, soaring unemployment and poor standards of living.  In late 2011, in response to the crisis and in return for immunity from prosecution, President Saleh agreed to step down under a political transition agreement brokered by the Gulf Cooperation Council (GCC) in late 2011.  His Vice President, Abd Rabbuh Mansoor Hadi, was elected unopposed in February 2012 as President of a Government of National Unity to preside over the two-year political transition plan.

A “National Dialogue Conference” (NDC), a central step in the political transition process, was convened in March 2013, bringing together over 500 representatives from different social and geographic groups.  Its main task was to lay the groundwork for a new constitution and electoral system.  The NDC concluded in January 2014. The next steps in the transition timetable are the drafting of a new constitution followed by a constitutional referendum opening the way for elections.  A panel of experts is currently engaged in constitutional drafting, under UN guidance.

Yemen continues to face extensive security challenges including separatist unrest in parts of the country, as well as the presence of Al Qaida in the Arabian Peninsula and affiliated extremist groups.

The Friends of Yemen group, of which Australia is a member, is an international grouping of countries established to support Yemen meet the political, economic, security and humanitarian challenges it faces.

Yemen is a member of the United Nations, the Arab League, and the Organization of Islamic Cooperation.

Bilateral relations

Australia has a limited but friendly bilateral relationship with Yemen, based on its membership of the Friends of Yemen and collaboration through international fora on countering terrorism and piracy.  Australia is working with other UNSC members and the Friends of Yemen group in support of Yemen’s political transition process and in helping Yemen address wider challenges.  Foreign Minister, the Hon. Julie Bishop, chaired and addressed the Friends of Yemen group meeting at the United Nations on 27 September 2013.

Australia and Yemen also cooperate closely as fellow founding members of the Indian Ocean Rim Association for Regional Cooperation.

Development assistance

Since 2009, Australia has provided around $20 million ($8.5 million in 2012-13) to Yemen in humanitarian assistance through agencies like the UN World Food Program and UNICEF.  This has comprised food, shelter, water, sanitation, health care and protection for over two million conflict-affected people.

Economic overview

Yemen is the poorest Gulf economy, but grew strongly in the mid-1990s when oil production began.  Yemen is a small oil producer and does not belong to the Organization of the Petroleum Exporting Countries (OPEC). Unlike many regional oil producers, Yemen relies heavily on foreign oil companies that have production-sharing agreements with the government. Income from oil production constitutes 70 to 75 per cent percent of government revenue and about 90 per cent of exports.

As of January 2014, Yemen’s oil fields were estimated to contain proven crude oil reserves of more than 3 billion barrels.  Much of the revenue from the country’s natural gas facilities has been used to fund ongoing development programs and rural service delivery.  New discoveries are difficult to exploit due to security concerns and reserves are not expected to last beyond 2024.  Due to increased domestic demand and diminishing output, the World Bank predicts Yemen's oil and gas revenues will start to slow from 2017.

Yemen’s GDP growth rate reached 4.4 per cent during 2013, which follows a period of negative growth through to 2011. Recent growth has been attributed to a partial recovery of the political, security situation and recent regularisation of petroleum derivatives supplies. 

UNICEF and the United Nations World Food Programme (WFP) reports show that, as of July 2014, an estimated 10.5 million Yemenis – more than 40 per cent of the population – lack food security and basic services.Children are among the most affected: of the estimated 4.5 million children under 5, over 2 in 5 are stunted and almost 13 per cent are acutely malnourished.  About 13 million Yemenis do not have access to clean water sources, with rural areas hardest hit.  Half of the population also lacks adequate sanitation facilities – this is especially evident among migrants, refugees and internally displaced persons.

Over the medium term and with international financial assistance, Yemen is seeking to improve its infrastructure by expanding the production and distribution of electrical power, finalising road projects and networks, improving and modernising water resources and creating investment opportunities with the private sector.  In its 2014 budget, Yemen allocated over 20 per cent to infrastructure projects in a bid to stimulate growth and create job opportunities. Bringing the prospect of further economic linkages, the Gulf Cooperation Council announced it would include Yemen in plans for an integrated regional rail system.

The port of Aden is undergoing large scale redevelopment. Dubai Ports International manages the large container terminal under a 30-year contract, with the Yemeni Government as a minority shareholder.  The port should capture significant Europe-Asia container traffic, as it avoids the detour into the Gulf.

Trade and Investment

The security environment in Yemen has greatly hampered the development of commercial ties.  Trade with Yemen remains limited.  In 2013, total Australian exports to Yemen amounted to $321 million, comprising mainly wheat and dairy products.