‍The unified Yemen has a prominent place in the conscience and imagination of the majority of Yemenis along the geographical area of ​​the Yemeni land, from Al-Mahra in the east to Hajjah in the west, and from Aden in the south to Saada and Al-Jawf in the north. Further, the Yemeni unity on May 22, 1990, represented a strategic turning point in the modern history of Yemen because of its profound connotations in the political, economic, social, and cultural aspects of society, and in aspects of the national identity that are deeply rooted in history, looking forward to the modernization of the present and the future.

During three decades of achieving Yemeni unity, tangible development achievements have emerged in all economic and social sectors, which included all governorates and districts. At the same time, painful failures have occurred, and potential opportunities for building the state politically and institutionally, for developing the national economy, and for exploiting its promising potential in the development of physical and human capital, have been missed.

After a third of a century has passed since achieving Yemeni unity, groups of small projects have emerged to the surface, whether in the north or south of the country, as their political and economic imagination has failed to absorb the variables of life, state management, and the economy under a unified homeland in which everyone enjoys security, peace, and stability and in which the optimal exploitation of its human and natural resources is maximized in all governorates.

Nevertheless, it is possible here to focus on the economic aspect of the reunification of Yemen, land and people, and its local, regional, and international dimensions. Thus, the unification of Yemen means expanding the economic opportunities that the country enjoys, strengthening the partnership between the components of the state from the government, the private sector and civil society, and establishing an incubating environment for national and foreign investment, despite the existence of many structural challenges, institutional obstacles and legislative and legal gaps, which is something that societies in all parts of the world faced with determination and will, and then they have been able to transform these challenges and obstacles into promising opportunities, as is the case in the development experiences in South Korea, Rwanda, Malaysia and other emerging economies.

Promising Potentials

Likewise, the size of the population represents a challenge to the development, and it can be also a promising opportunity as well. Furthermore, the demographic structure in Yemen is characterized by young and youth. The indicators show that children and adolescents (the age group from 0 to 18 years) constitute 47%, and that youth and the workforce (the age group from 19 to 60 years) constitute 46% of the population.

This means that Yemen has a huge human resource, which is a high comparative advantage in the Arabian Peninsula region that is rich in mineral resources and faces a frightening shortage in the workforce. However, the promising opportunity here is to adopt policies and programs aimed at developing human resources through the development of public, technical, and university education institutions to qualify them to enter the local, regional, or international labor market.

The country has become a scene for regional and international ambitions and interventions. Besides, the internal entities have turned into pawns on the chessboard, moved by external forces however and wherever they want, and all of this is deducted from the balance of the aspirations and hopes of the Yemenis, their identity, and the future of the present and the next generations.

Over the past five decades, the Yemeni workforce has contributed to filling the deficit in the Gulf labor market. Besides, the remittances of Yemeni expatriates have also played a pivotal role in strengthening the cash reserves, stabilizing the exchange rate of the riyal in the foreign exchange market. In addition to expanding the volume of direct investment in the national economy, and improving the level of livelihood of the expatriate' families in rural and urban areas.

• On the other hand, Yemen has small reserves of oil and gas compared to the other countries in the region; however, there are promising potentials for this wealth. Furthermore, the oil map of Yemen includes 105 sectors, and the oil is produced from only 12 sectors. This means that the rest of the sectors are open and need to be promoted to attract international companies to invest in them. In addition to the importance of maximizing utilization of gas export revenues, and protecting the country’s sovereign rights over those revenues. What’s more, there is an urgent need to review the contract agreements with the operating partner with regard to pricing, profit shares, the volume of gas sold to the operator according to the contracts, upstream facility fees, the volume of gas reserves, and others.

• Exploiting the distinguished geographical location of Yemen, which has extensive coastlines from Midi in the west on the Red Sea to Hawf in the east on the borders of Oman and is located on the international shipping line linking Asia, Africa, and Europe. Therefore, this requires developing sea ports, joining the Belt and Road initiative adopted by China, and taking advantage of the investment opportunities promoted by this initiative. In addition to the importance of protecting the territorial waters and the exclusive marine economic zones of Yemen, which are vast areas extending to the continental shelf in the depths of the Indian Ocean. Besides, the proper exploitation of the fish wealth or mineral resources therein, as well as protecting the islands, specifically the island of Socotra, as one of the pillars of promising opportunities in the future, and promoting tourism in all regions of Yemen.

• The optimal exploitation of the limited arable lands, which constitute only about 3% of the total area of Yemen, and focusing on expanding the cultivation of cash crops of fruits, vegetables, and economically feasible crops, to contribute to ensuring food security in the present and in the future. In addition to the importance of rationalizing the use of water, which represents a structural challenge not only to agriculture but also to human life on the map of the unified Yemen.

Achievements and Failures

In 1990, the human and economic development indicators ranked the two parts of Yemen in the group of least developed countries, with a difference in the economic opportunities and private sector investments in the northern part. Nevertheless, over the past three decades, the successive governments have been able to contribute to economic and social development programs, which include:

• Preparing four five-year plans for economic and social development: the first was (1996–2000), the second was (2001–2005), the third was (2006–2010), and the fourth was a phased program (2012–2014). Thus, successive governments were able to mobilize domestic and foreign resources to finance the development projects for those plans in coordination and cooperation with the donor countries and the international and regional institutions. Further, donor conferences were held to support the implementation of the development plans, the first of which was in Brussels in 1997; the second was in Paris in 2002; the third was in London in 2006; and the fourth was held in Riyadh in 2012. The total donor pledges of loans and aid at those conferences amounted to about $17 billion.

Unfortunately, governments were not able to exploit all these resources, and only about 40% of those pledges were utilized and allocated to the development projects, due to their weak absorptive capacities for those pledges. In addition to the institutional and legal obstacles of the state agencies concerned with the implementation of development projects. In general, the state has made tangible achievements in implementing development projects in various sectors and in all governorates, the most important of which are electricity, main roads and bridges, secondary and rural roads, water and sanitation, public education schools, universities, technical institutes, hospitals, medical centers, and others.

Moreover, these projects have contributed relatively to improving the level of development in Yemen, despite the expansion of needs in all sectors and governorates.

• Attracting the international investments in the field of exploration, extraction, and export of oil and gas in the governorates of Ma’rib, Hadramout, and Shabwa, as the production and export of oil have increased since 1993, reached its highest level in 2005, with quantities of up to 500 thousand barrels per day. Furthermore, the oil sector has become the leading one in the economy, as its contribution amounted to about 30% of the gross domestic product and about 95% of the total exports abroad. Since 2005, the production and export of oil have begun to decline due to diminishing reserves in oil wells on the one hand and, and on the other hand, the inability to attract international oil companies to invest in the sector, due to the failure of the state to establish security and safety in the exploration areas, the spread of the phenomenon of kidnapping foreigners, and the emergence of the equation of "partnership with the investor in exchange for protection" from the intrusive influencers in the state apparatus. Besides, the state has also been able to attract foreign investments to extract and export gas since 2009; however, the official reports and judicial rulings show that the contracts and agreements signed with the operating partner were marred by suspicions of corruption and gave up the sovereign rights of Yemen in revenues, profits, and reserves.

Conflict and Fighting

Since the early years of the blessed unity, the political parties have been unable to prepare the country for stability, harmony, and development, and have tended to quarrels and conflict, then internal fighting. Hence, this has been recurring again and again almost every decade, starting with the 1994 war, passing through the Saada wars in 2004 and beyond, ending with the catastrophic and destructive war in 2014 and continuing until the present time. Actually, all those wars, regardless of justification or opposition to them, have caused deep wounds in the body of the one nation, affected the path of stability and development, consumed a lot of financial and human resources, but also reinforced calls for secession, fragmentation, and the squandering of the sovereign wealth of society, and contributed to rolling Yemen from a semi-stable state to a fragile state, and then to a failed and collapsed state.

The country has become a scene for regional and international ambitions and interventions. Furthermore, the internal entities have turned into pawns on the chessboard, moved by external forces however and wherever they want, and all of this is deducted from the balance of the aspirations and hopes of the Yemenis, their identity, and the future of the present and the next generations.

Missed Opportunities

By the end of 1994, Yemen was suffering from a severe economic crisis, which was represented in the severe deterioration of the exchange rate of the riyal (the exchange rate in the parallel market was about 10 times higher than the official exchange rate). Further, the inflation rate also reached more than 105%, the volume of cash reserves fell to its lowest levels, and the volume of foreign loans and the deficit in the general budget amounted to about 20% and 25% of the gross domestic product, respectively, which prompted the government at that time to communicate and coordinate with both the World Bank and the International Fund, and then it adopted the programs of economic, financial, and administrative reforms.

The generation that coincided with the achievement of Yemeni unity constitutes a huge size of the population in 2022, as data indicates that those under the age of forty amount to 26.2 million people (males and females), representing 82% of the total population, and certainly are the vast majority of this generation. In addition to the high percentage of those in the over-40 age groups, who aspire to a unified and stable homeland.

During the period (1995–2000), governments were able to achieve stability in exchange rates, reduce inflation and the budget deficit, and to exempt a high proportion of foreign loans through the Paris Club. However, the pace of reforms slowed down after that, and successive governments missed the opportunity to address many imbalances, such as:

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• Both the volume of subsidies for oil derivatives and the interest on the local public debt increased to high levels, representing 20% and 25% of the public spending, respectively.
• Tax reform stumbling, the inability to expand the tax base, and the failure to apply the principles of justice, equality, and inclusiveness in tax collection.
• Stumbling over the privatization program of the public companies, and the accompanying lack of transparency and waste of public property.

In the aspects of administrative and institutional reforms, the expectations were high for the modernization of the civil service, the restructuring of government agencies, the reforming of the wage and salary system, and the reduction of redundant, dual, and fictitious employment. Unfortunately, the level of performance in this aspect was weak and stumbled, and the donor support programs for the modernization and reform of the state administrative apparatus were not optimally utilized, which made the World Bank cancel financing the second phase of the civil service modernization project.

In addition to the above, the opportunity was also missed to establish a local government system that enhances financial and administrative decentralization, embodies the partnership of local communities in the governorates and districts in decision-making, and elects the leaders of the governorates and districts to contribute to the management of the economic and development affairs in cooperation and coordination between the center and the parties. Thus, another opportunity was also missed, as the Local Authority Law came below expectations and created marginal entities, but rather, the financial centralization has even deepened to excessive degrees.

Furthermore, the successive governments were unable to create an appropriate and incubating environment for national and foreign investment by stumbling over institutional, legislative, judicial, and banking reforms. Thus, the opportunity was missed to attract Yemeni migrant investments or foreign direct investment to finance private sector projects in promising and feasible sectors, with the exception of limited projects in the oil, gas, and hotel sectors. The best evidence for that is the failure to establish a free zone in Aden in accordance with the best regional and international standards and practices, as is the case in Dubai or Singapore.

Appeal to the Generation of Unity

The generation that coincided with the achievement of Yemeni unity constitutes a huge size of the population in 2022, as data indicates that those under the age of forty amount to 26.2 million people (males and females), representing 82% of the total population, and certainly are the vast majority of this generation. In addition to the high percentage of those in the over- 40 age groups who aspire to a unified and stable homeland, living in it in safety, security, and peace, and absolutely rejecting all projects of fragmentation and division.

Likewise, they also refuse to pay a heavy price for the grave mistakes committed by politicians (in the North and South) against their homeland and in determining the fate of their future. More than two-thirds of this age group (under the age of 40) are in their childhood, enrolled in the basic and secondary schools or universities, or looking for a job, which means that they are the owners of professions and specializations in the future, and have the right to obtain suitable jobs in their homeland, which extends from Al-Mahra to Hajjah. While the remaining third are those with applied and theoretical specializations, or those who are looking for handiwork or vocational job opportunities, who also have the full right to live in dignity and carry the identity of their unified homeland inside and outside the country.

Besides, all indications indicate that the unity generation has lost confidence in the political class that promotes the fragmentation and re-division of Yemen. However, all hopes are pinned on this generation to correct the course and build a unified and promising homeland in the present and in the future.

Dr. Mutahar Al-Abbasi

Professor of Economics, Sana'a University