Yemen project 279-0083 · 1990 · macroeconomic foundation for growth

The new, united Yemen is a study in contrasts. The North represents nearly 80% of the total estimated population of 10 million, the South nearly 66% of the estimated total land area of 528,000 sq km. The North brought to unification greater agricultural and industrial potential (much of it, paradoxically, in private sector hands), as well as a fairly well developed transportation network and substantial oil revenues; the South brought a more educated work force and relatively unexplored oil reserves. Despite the country's small and basically service- oriented economy and its poor ratings in terms of leading social indicators such as life expectancy and child mortality, the economic prospects of a united Yemen initially seemed fairly bright. The Iraqi invasion of Kuwait darkened this picture considerably. First, long-term donor relationships were immediately threatened. Aid from Kuwait and Iraq were cut off, and relations with other donors were strained by Yemen's support of Iraq, a position heightened by Yemen's highly visible tenure on the UN Security Council. Second, remittance income from Kuwait, Iraq, and Saudi Arabia is threatened and will almost certainly decline; half

Source: DEC abstract, PN-ABH-022 (1990). The source's own text.