Economy - overview The northern city Sanaa is the political capital of a united Yemen, and the southern city Aden, with its refinery and port facilities, is the economic and commercial capital. Future economic development depends heavily on the attraction of foreign investment to diversify the economy. Former South Yemen's willingness to merge stemmed partly from the sharp 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 GDP has been supplemented by remittances from Yemenis working abroad and by foreign aid. Since the Gulf crisis, however, remittances have dropped substantially. Floods in June 1996 caused the loss of much valuable topsoil in the agricultural sector, increasing the need for imports of foodstuffs. Oil production and GDP as a whole are expected to increase moderately in 1998.

GDP purchasing power parity - $31.8 billion (1997 est.)

GDP - real growth rate 5% (1997 est.)

GDP - per capita purchasing power parity - $2,300 (1997 est.)

GDP - composition by sector
agriculture: 15%
industry: 39%
services: 46% (1995)

Inflation rate - consumer price index 5% (1997 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: $2.6 billion
expenditures: $2.7 billion, including capital expenditures of $1.1 billion (1998 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 (1995)

Electricity - production 1.85 billion kWh (1995)

Electricity - consumption per capita 126 kWh (1995)

Agriculture - products grain, fruits, vegetables, qat (mildly narcotic shrub), coffee, cotton; dairy products, poultry, meat; fish

Exports
total value: $2.3 billion (f.o.b., 1997 est.)
commodities: crude oil, cotton, coffee, dried and salted fish
partners: China 23%, South Korea 19%, Thailand 14%, Brazil 13%, Japan 12%, Thailand 7% (1995)

Imports
total value: $2.3 billion (f.o.b., 1997 est.)
commodities: textiles and other manufactured consumer goods, petroleum products, foodstuffs, cement, machinery, chemicals
partners: US 12%, France 11%, UAE 10%, Saudi Arabia 7%, UK 5% (1995)

Debt - external $8 billion (1996)

Economic aid
recipient: ODA, $148 million (1993)

Currency Yemeni rial (YRl) (new currency)

Exchange rates Yemeni rials (YRl) per US$1 - 129.158 (1997), 94.157 (1996), 40.839 (1995), 12.010 (official fixed rate 1991-94)

Fiscal year calendar year

NOTE: The information regarding Yemen on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Yemen Economy 1998 information contained here. All suggestions for corrections of any errors about Yemen Economy 1998 should be addressed to the CIA.