One in three of
Such bleak economic realities feed into the political challenges to President Ali Abdullah Saleh’s 31-year rule.
Secessionist unrest in the south looms as his gravest immediate problem now that a fragile ceasefire has calmed a long-running northern "Houthi" revolt — although that truce risks unraveling, with breaches reported on both sides.
Islamist militancy, fuelled by poverty, poses a lesser threat, analysts say, despite last month’s failed attack by an al Qaeda suicide bomber on the British ambassador in Sanaa.
"The south is the real challenge," said Yemeni political analyst Abdul-Ghani Al-Iryani. "The regime is not dealing with the grievances of southerners, raising the specter of a civil war. Arguably a low-level civil war is already in progress."
Southern discontent, rumbling since a 1994 civil war, has flared into mass protests and almost daily clashes with security forces. Secessionist groups are split and lack outside support.
"There is no doubt, however, that the Southern Movement has the potential to develop into a major challenge to the legitimacy of the government, the stability of the country and eventually to the integrity of the state," argued a paper published in April by the Dubai-based Gulf Research Center.
Instability or state collapse in
North and south
President Saleh has complained that southerners nurture a "culture of hate" against the north.
"Southern disaffection has gone beyond the point of no return," Victoria Clark, author of a recent book on
Southerners, comprising less than a fifth of the population, no longer have the tanks, aircraft and heavy weapons to fight a conventional war as they did in the 1994 secessionist revolt.
"My best guess would be that the break-up of the state will happen in the inevitable dust-up that will follow the removal of Saleh, which will happen when the money to pay the army and civil service runs out," Clark said.
The Sanaa government is already strapped for cash. This week it raised fuel prices to ease the burden of diesel subsidies which Central Bank officials say cost around $2 billion a year.
"The regime pretends it’s just a matter of fine-tuning an otherwise well-running machine, but the machine is broken and without an overhaul we face disaster," said Iryani, listing economic woes such as tariff collection failures, declining foreign investment, diesel smuggling and capital flight.
Yemeni officials, however, blame falling oil income for aggravating economic, financial and security problems.
Western donors, alarmed by a Christmas Day attack on a
Throwing development money or counter-terrorism aid at
That hardship is perhaps nowhere more acute than among the 270,000 people who fled battles between government forces and Houthi rebels in and around the northern city of
A February ceasefire halted six months of fierce fighting in the north, but UN officials say many of the displaced have sold their last livestock while waiting to see if it holds.
"People have three options after that — revolt, migrate or die," said World Food Program spokeswoman Emilia Casella.
Senior Yemeni officials say al Qaeda recruiters can also thrive in a country with 35 percent unemployment, coupled with poverty affecting 42 percent of a young population.
Iryani, the Yemeni analyst, described al Qaeda in the Arabian Peninsula (AQAP), which is thought to have no more than a few hundred militants, as a minor concern that could be laid to rest if the grievances that helped it recruit were addressed.
"Poverty, injustice, callous disregard for the law and rampant corruption that have undermined the legitimacy of the regime: once we deal with these we can easily deal with AQAP."