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Geography

The Republic of Yemen, in the south-eastern part of the Arabian peninsula, is bordered on the north by Saudi Arabia and on the east by Oman. Its southern shores are on the Gulf of Aden and its western shores are on the Red Sea. It has a land area of 528,000 km2. From the Gulf of Aden and the Red Sea a narrow coastal plain leads to highlands that cover most of the country and include rugged mountain areas. The upland desert plains are part of the extremely dry and harsh desert land of the Arabian peninsula. Natural water resources are severely limited. Drought, sandstorms and dust storms are natural hazards. About one third of the land is used for agricultural purposes, mainly for raising and grazing livestock. In 2005 the population was an estimated 21.0 million and was growing rapidly. The fertility rate in 2004 was 5.9 per cent. Almost half the population is under 15 years of age.

Agriculture

This predominantly rural country is one of the oldest agricultural civilizations in the world. Despite the arid climate, agriculture has always been a major sector of the economy. Farmers cultivate about 80 percent of all the scarce arable land. Farm sizes are small, averaging about 1 ha, and most farmers use traditional methods. Well irrigation made it possible to expand cultivated areas, but groundwater tables are rapidly declining.

Because of the rapid growth of other economic sectors, particularly oil, agriculture's share of gross domestic product (GDP) has dropped sharply. It accounts for only 13 percent of GDP, according to the World Bank's 2005 estimate, compared to 30 percent in the 1990s. The downward trend continues at a rate of about 1 percent per year.

Reflecting the economy's market-oriented approach, agriculture has become more commercial. Production of cereals for food is decreasing, and farmers are producing more market crops, including vegetables, fruit and qat, a mildly narcotic plant chewed by a majority of the population. Yemen now depends on imports for 78 percent of the cereals it needs to feed the people. Livestock accounts for 20 percent of agricultural production. The fisheries sector has great potential for contributing to GDP and providing employment opportunities.

Economy

The Republic of Yemen is a small country with limited natural resources. The economy depends mainly on oil revenues, on international financial support, and on remittances from migrant Yemeni workers. During the Gulf crisis, when other Gulf countries cut off economic assistance to Yemen and sent nearly a million Yemeni migrant workers home, loss of income from remittances dealt a devastating blow to the economy. Returning migrant workers swelled the ranks of the unemployed. The high fertility rate contributes to an increase in the labour force, which is growing at an annual rate of 4.5 percent (2005). Unemployment levels are high.

The Republic of Yemen was established in 1990 with the unification of the Arab Republic of Yemen in the north and the People's Democratic Republic of Yemen in the south. To halt the economic decline that followed unification and a civil war in 1994, the government initiated a series of economic and political reforms. With the support of the International Monetary Fund, the country is implementing a structural adjustment programme to modernize and streamline the economy. GDP, which was an estimated US$14.5 billion in 2005, is currently growing at a rate of more than 4 percent per year.

Source: IFAD