Basic Country Facts

Economy Economic overview: Whereas the northern city Sanaa is the political capital of a united Yemen, the southern city Aden, with its refinery and port facilities, is the economic and commercial capital. Future economic development depends heavily on Western-assisted development of the country's moderate oil resources. Former South Yemen's willingness to merge stemmed partly from the steady decline in Soviet economic support. The low level of domestic industry and agriculture has made northern Yemen dependent on imports for practically all of its essential needs. Once self-sufficient in food production, northern Yemen has become a major importer. Land once used for export crops - cotton, fruit, and vegetables - has been turned over to growing a shrub called qat, whose leaves are chewed for their stimulant effect by Yemenis and which has no significant export market. Economic growth in former South Yemen has been constrained by a lack of incentives, partly stemming from centralized control over production decisions, investment allocation, and import choices. Yemen's large trade deficits have been compensated for by remittances from Yemenis working abroad and by foreign aid. Since the Gulf crisis, remittances have dropped substantially. High inflation and political divisions hinder the development of a forward-looking economic policy. GDP: purchasing power parity - $37.1 billion (1995 est.) GDP real growth rate: 3.6% (1995 est.) GDP per capita: $2,520 (1995 est.) GDP composition by sector: agriculture: 21% industry: 24% services: 55% Inflation rate (consumer prices): 71.3% (1994 est.) Labor force: no reliable estimates exist, most people are employed in agriculture and herding or as expatriate laborers; services, construction, industry, and commerce account for less than one-half of the labor force Unemployment rate: 30% (1995 est.) Budget: revenues: $1.4 billion expenditures: $1.2 billion, including capital expenditures of $NA (1996 est.) Industries: crude oil production and petroleum refining; small-scale production of cotton textiles and leather goods; food processing; handicrafts; small aluminum products factory; cement Industrial production growth rate: NA% Electricity: capacity: 810,000 kW production: 1.8 billion kWh consumption per capita: 149 kWh (1993) Agriculture: grain, fruits, vegetables, qat (mildly narcotic shrub), coffee, cotton; dairy products, poultry, meat; fish Exports: $1.1 billion (f.o.b., 1994 est.) commodities: crude oil, cotton, coffee, hides, vegetables, dried and salted fish partners: US 17%, Japan 16%, Singapore 15%, China 13% (1994) Imports: $1.8 billion (c.i.f., 1994 est.) commodities: textiles and other manufactured consumer goods, petroleum products, sugar, grain, flour, other foodstuffs, cement, machinery, chemicals partners: US 11%, UK 7%, France 7%, Germany 5%, Japan 5% (1994) External debt: $8 billion (1996) Economic aid: recipient: ODA, $148 million (1993) Currency: Yemeni rial (new currency) Exchange rates: Yemeni rials per US$1 - 12.010 (official fixed rate); 90 (market rate, December 1994) Fiscal year: calendar year