Monday, November 16, 2009

Recent conflicts in Yemen threaten to disrupt economic development and international investment

Sources: - Yemen-Saudi Skirmishes Threaten a Wider Conflict

Library of Congress, Federal Research Division - Country Profile: Yemen

New York Times Online - In Yemen, War Centers on Authority, Not Terrain

Al Jazeera English - Yemen Conflict Raises Gulf Tensions - Common thread

Asharq Alawsat - Don't Confuse the Huthis with the Zaidis

Yemen Post - Businessmen Fear Being Kidnapped; Nine kidnapped in 2009 - Arab Experts Predict Middle East Water Wars

Yemen Observer - WFP reaches 100,000 people in Yemen, amidst continued fighting

Yemen Post - Yemeni-Saudi Transport Venture Underway

Yemen News Agency - UK confirms continuing support for development in Yemen

Recent fighting in Yemen risks sparking a wider war that would destabilize the economy.  Despite its proximity to Saudi petrodollars, Yemen’s development has lagged far behind its northern neighbor.  The complex background of this conflict has its roots in early Islamic history, modern power politics, and diminishing natural resources.  These complicated issues make finding a lasting peace elusive.  Until then, rebel forces are slowly taking their toll on the Yemeni economy through lost investment opportunities and scuttled development projects.  Analysts project that foreign assistance will make up for current budget shortfalls but recognize that this is only a short term, unsustainable fix.  For Yemen to stand on its own, investment must improve in a peaceful atmosphere.

Since North and South Yemen unified in 1990, their economies have been dealt a series of blows.  In 1991 Yemen supported Iraq.  In retaliation, Saudi Arabia deported almost 1 million workers from Yemen and along with Kuwait, slashed economic aid.  In 1994 a civil war further crippled the weak economy.  More recently, the International Monetary Fund has threatened to reduce its aid to Yemen pending economic reforms.  At the same time, the cultivation and use of the obscure drug khat has been taking over fertile fields and a disproportionate amount of their dwindling water resources. 

The main area of conflict centers on desert tribes that operate in the north area of Yemen near the Saudi Arabian boarder.  This group, called the Houthi, is a radical group from the Zaidi sect of Shi’ite Islam.  Saudi Arabia and the leaders of Yemen are Sunni.  Many citizens in Yemen suspect covert Shi’ite Iranian involvement.  Saudi Arabia and Islamic experts have gone to great pains to stress that the conflict cannot be simply described as religious in nature.  Some political experts believe the fighting is an effort for current president Ali Abdullah Saleh to maintain his political power.  Other economists believe the root of the conflict is drastic water shortages that inflame tribal tensions.  Regardless of its cause, violence has been building.  In early November small scale skirmishes intensified when a Saudi officer was killed and Saudi Arabia responded by using fighter jets to bomb rebel strongholds. 

The rebel pressure from the north is concerning not only because of the thousands that have died and tens of thousands of new refugees.  It also risks allowing Al-Qaeda forces in the south of the country to gain power.  A recent report from the risk consultant Eurasia Group reported that Al-Qaeda is establishing “more sophisticated infrastructure” in Yemen.  Many experts agree that Al-Qaeda is regrouping and gaining power to launch attacks throughout the region from its Yemeni base.  Recently, Anwar al-Awlaki, a radical imam suspected of Al-Qaeda involvement and whose teachings may have influenced the tragic killings at Ft. Hood, Texas was suspected of hiding in Yemen.

These destabilizing forces have made international investment a risky proposition.  The Yemeni President Ali Abdullah Saleh described the aim of the rebellion as “trying to demolish the economy.”  When energy giant Total built a new facility in the country that could bring in more than $1 billion annually to government coffers, it did so with extreme security.  Security during construction was high, and it has now hired 500 soldiers to guard the facility.  This high security is important, because there were at least 9 recorded kidnappings of businessmen in 2009.  One worker described the hushed tones in his office because, “We try not to yank the door handles so that our manager does not get horrified by the sound”.  The Yemeni government is trying to attract investors, hosting a conference November 11th and 12th titled “Aden…Yemen’s Gate to the World.”  It is hoping that by addressing security issues head on, it can bring in more direct investment.  Yemen has also stepped up appeals to foreign governments, recently securing commitments of support from the United Kingdom.  Meanwhile, all eyes are on the widening gyre and development aid has shifted from economic assistance to supporting human needs.  The United Nations World Food Program is now feeding 100,000 people in Yemen.


1) Is it possible for Western countries to be involved in this conflict without further straining the relationship between the West and Islam?

2) How can foreign aid agencies that are seen as allied with the West be effective in this conflict? Should they continue to operate if their workers are targeted?

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