Shortages have increased inflation to nearly 20 percent, up from 5.5 percent in late 2012. The economy began to regain strength in 2012, but that growth has stalled because of increased al Qaeda terror attacks. The defeat of al Qaeda and installation of the new government temporarily led to an improved economy. The improvement was not dramatic enough to deal with the worst problems (water and food shortages and very high unemployment). The wealthy Gulf Arab states have been donating billions of dollars in aid each year but most of that goes to avoid widespread starvation of disease. The long term problems, especially corruption, are still beyond viable solutions.
Yemen has, for thousands of years, been the most populous and prosperous part of Arabia because it was the area with the most water. The annual monsoon rains made agriculture the major economic activity. Even today over 70 percent of Yemenis depend on agriculture for a living but agriculture only accounts for 17 percent of GDP. Moreover, much of the agricultural activity no longer produces food. The water supply is rapidly running out because nearly half of it is now being used to grow the addictive Khat plant, most of which is smuggled into Saudi Arabia where there is great demand. The rest is consumed locally and leaves much of the adult male population dazed and idle most of the day.
The main hope for the economy has long been oil and gas. Yemen has much less of this than the other Arab states to the north. Currently Yemen produces 270,000 barrels a day of oil and up to 6.7 million tons of liquid natural gas a year. These exports are 90 percent of exports and pay for 70 percent of the government budget. The problem is that too much of the oil and gas income is stolen by government officials, rather than being used to solve pressing economic problems. This is what causes so many tribes to rebel. The new government has promised to clean up the corruption and rule effectively. Not a lot of evidence of that so far.
The economy is collapsing and taking the government with it. Oil and gas production has been halted by attacks on pipelines, cutting of the main source of money for the government. The economy is a mess, with only four percent of the population having bank accounts and most people just getting by, or trying to get out of the country. Thus, with a rapidly disappearing water supply, a growing population, a corrupt government, tribes constantly in revolt, rampant smuggling (of Africans into Yemen and drugs and other banned substances into Saudi Arabia), and little legal revenue sources for the tax collector, chaos is seen as inevitable. While Yemenis complain that their government is run by corrupt crooks, an outlaw attitude is popular throughout the country. This makes it difficult to form a new government that is not full of self-serving scoundrels. The basic problem is the tribalism. The chiefs of the major tribes are rich men, who are often deeply involved in the activities (Khat farming, smuggling, and other criminal behavior) that cause so many of the problems in the first place. The tribes are rebelling because each of them is trying to avoid losing in this game of economic musical chairs.
Violence in the north continues as it has for decades since the government took away the autonomy that the dominant Shia Bakil tribe long enjoyed up there. Now the government is backing the smaller Sunni (and pro-government) Hashid tribe and that has led to increasing violence with the dominant Bakil. The most recent violence revolves around the town of Damaj and a Sunni religious school there. This violence has left over 200 dead and more than 500 wounded since it began on October 30th. The Sunni tribes in the north have been fighting the Shia tribes for generations but it has never been this bad. Damaj is about 40 kilometers south of the Saudi border and the Sunni religious school has been there since the late 1970s and now has thousands of students, many of them foreign. According to the Shia tribes the school is now producing Sunni Islamic radicals who seek to kill Shia (as Sunni religious conservatives consider Shia heretics). Damaj has become a battlefield in the struggle over leadership of Islam by Sunni Saudi Arabia (which backs the Islamic conservatives in Damaj) and Shia Iran (which supports the Shia tribesmen of northern Yemen).
December 9, 2013: In the south (Hadramawt province) an American UAV killed three Islamic terrorists with a missile.
In the capital security forces began enforcing a week long ban on motorcycles and motorized bikes. A year ago the government launched a similar campaign, and during a three day effort in January of this year over 500 unregistered motorbikes were seized. These bikes are often used by assassins of government officials, and the ban is an effort to see how much these attacks depend on the use of the two-wheeled transport. The government has banned all motorcycles without legal license plates and the seizure of bikes that violate any traffic laws but the police are corrupt and tend to let violators go after payment of a bribe.
Motorcycles are a favorite form of transportation for terrorists and tribal rebels. The number of motorcycles has more than doubled (to 250,000) since 2011 because smugglers had an easier time bringing in untaxed bikes and selling them to terrorists with money (from criminal activities or wealthy donors) to spend on essentials, like transportation. Many of the new bikes were never registered and now the police are going after them. Because of the corruption, many of the seized bikes will soon be back in use, with legal plates and all. But the bans and seizures slow down the terrorists and gangs for a while.
December 5, 2013: In the capital a dozen al Qaeda men attacked the Defense Ministry compound. A suicide car bomb began the assault which was followed by eleven gunmen dressed in army combat uniforms. Before it was all over, 56 people were killed, including all the attackers (who were apparently Saudi). Over 160 people were wounded. Al Qaeda took credit for the attack and said it was meant to interfere with the American UAV operations, which the terrorists believed was run out of the Defense Ministry compound. It wasn’t, but al Qaeda is desperate to halt the UAV operations, which have killed many of their key people and made it very difficult for the terrorist leaders to move around. The Defense Ministry attack did a lot of damage to a hospital located there and left at least seven foreign doctors and nurses dead.
December 2, 2013: In the south (Hadramout province) Islamic terrorists attacked an army checkpoint and were repulsed, leaving six terrorists and three soldiers dead.
November 23, 2013: In the south an American UAV attack killed a dozen Islamic terrorists driving on a remote stretch of road.
November 22, 2013: In the capital a Shia member of parliament was killed as he left a mosque.
November 20, 2013: In the south (Hadramout province) an army raid on an al Qaeda base encountered strong resistance and six soldiers were killed. The Islamic terrorists escaped but much of their equipment and weapons were captured.
November 19, 2013: In the south (Hadramout province) an American UAV attack killed three Islamic terrorists.