Yemen is the poorest country in the Middle East. Half of
the population lives below the poverty line. High
unemployment and widespread illiteracy are fundamental
The basis of the country's economy consists of oil
production; the oil industry accounts for 80-90 percent of
export earnings. Important elements of the economy are
international aid and transfers from Yemenis abroad. In
order to obtain continued international loans and
assistance, the country has been forced to privatize and cut
However, a large informal sector with smuggling and
corruption has hampered the state's ability to control
economic development. According to
COUNTRYAAH, the country has tried to pursue an
active policy to develop the business sector outside the oil
sector, among other things, efforts have been made to
develop gas production.
Despite the country's large dependence on oil production,
agriculture is still important for the country's economy.
The soils in the northwestern regions are among the most
fertile on the Arabian Peninsula, and the precipitation
enables intensive but small-scale farming. In the
southeastern regions, the conditions for agriculture are
poorer, and cultivation is limited to certain river valleys
and irrigated areas. Coffee used to be an important export
crop, but has increasingly been replaced by khat (a drug),
which is more profitable. It is estimated that 150,000
people are employed in trade and cultivation of khat. The
most important grain is expensive, but also wheat, barley,
maize, cotton, tobacco, dates and fruits and vegetables are
grown. However, yields are low, and Yemen has to import more
food. Recurring problems with droughts and floods have led
to a highly fluctuating agricultural production, and
therefore the construction of dams and irrigation systems is
prioritized. However, the increase in irrigation has led to
difficulties with water supply, as agriculture demands more
and more of the available water.
The fishing waters in Adenviken are considered to have
significant economic development potential. However, fishing
in Yemen is undeveloped. From small boats near the coast,
mainly fishes, octopus, mackerel and tuna are fished.
Facilities for freezing and preserving fish have been built
in recent years.
Oil in commercially exploitable quantities was discovered
in the early 1980s, and several new discoveries have been
made since then. Production is low compared to some
neighboring countries, but still economically significant.
Natural gas deposits have been known for a long time, but
commercial exploitation began only in the late 00s; In 2009,
the country began exporting natural gas.
The well-known oil reserves are expected to end in the
early 2020s, forcing a priority on natural gas production.
Yemen is also relatively rich in iron ore, salt, copper,
sulfur, lead, zinc, nickel, gold, silver and uranium.
The manufacturing industry in Yemen is undeveloped. Oil
refineries can be found in Aden and Marib. Stone salt is
extracted in Salif and cement factories are located in Bajil
and Amran. Other manufacturing includes the textile,
leather, plastic, rubber and food industries. At the heart
of Yemen's strategy for industrial development is the
economic free zone in Aden. So far, however, industrial
establishments have taken place mainly in traditional
sectors such as textiles, leather, food and building
Increased oil exports have led to the country since 1994
most often had a positive trade balance. There is extensive
smuggling between Saudi Arabia and Yemen. Oil exports
account for almost the entire export value, and the main
exporting countries are Egypt and Thailand. Imports mainly
comprise factory goods, means of transport, clothing, food
and live animals, mainly from the United Arab Emirates,
China and India.