Challenges in Yemen

Alt text for image

Yemen being one of the poorest and least developed countries in the Arab Region with a per capita GDP of US $ 1,160 faces a wide range of development challenges and disparities.

The economy is dominated by the oil sector, which covers 27% of the Gross Domestic Product and 70% of export revenues.

More than half of the population is below 15 years of age. Based on the poverty update; the proportion of the poor increased according to the 2010 food poverty line (extreme poverty) from 12.46% to 16.15% or about 30% compared to UNDP/World Bank/Government of Yemen, Poverty Assessment for 2005-2006.

Both the poverty gap and severity also increased by a more accelerated rate than that of the proportion of the poor. 

The country has also witnessed a further decline in humanitarian and livelihoods conditions following the political and social unrest in 2011. Recent estimates suggest that poverty rate has increased from 42% in 2009 to 54.5% in 2012.

Unemployment is estimated at 52.9% and 44.4% among the 15-24 and 25-59 age groups respectively. Unemployment is fairly broad, cutting across urban and rural areas and was much exacerbated by the political unrest of 2011.

The protests of 2011 initially focused on unemployment, poor economic conditions and corruption and then resulted in open calls for political change. Growing social and political unrest in the country poses challenges to local development and creates an environment for further deterioration of livelihood and increase of humanitarian needs across the country.

How to address these challenges

Alt text for image

We are focusing on responding to the development challenges of the transitional period and creating sustainable livelihood, economic empowerment and job creation for youth and women.

Partnerships are being fostered to address the most urgent population needs through initiatives for community revitalization that aim to urgently restore livelihoods and kick start productivity of affected communities through distribution of productive inputs, reintegration and other goods and services aiming at the empowerment of vulnerable groups.

By strengthening youth and women resilience and improving their adaptive capacities through pre-emptive measures, we are making contribution to prevent future escalation of grievances and tensions among youth and women and thus to enhance peace building, political, economic and social stability.

Job creation opportunities and conditions remain weak especially among the youth who account for approximately 60 percent of the total population.

Development of small enterprises and promotion of self-employment remains one of our key intervention areas through creation of an enabling environment for responsive entrepreneurship development, promotion of business culture and building capacities of key stakeholders including services providers.

We are working with local stakeholder to create enabling environment for generation of employment opportunities in the governorates of Sana’a, Aden and Taiz, through introduction of an innovative 3x6 sustainable employment generation approach which support the targeted groups through compulsory saving and financial incentive schemes not only to provide additional incomes sources, but also to develop their own business ideas and develop micro and small businesses thus supporting groups at risk from slipping into poverty.

A comprehensive, market driven, gender responsive and community-based strategy is being sought and strategic partnerships with local authorities, Local Councils, religious leaders, NGOs, private sector, and relevant institutions, to strengthen their capacities as responsible service providers, facilitators and advocacy actors.

Furthermore, since the launch of the first Diagnostic Trade Integration Study (DTIS) in 2002, many developments have occurred in the economy and the trade-related sectors.We are updating the Diagnostic Trade Integration Study (DTIS) to provide a renewed perspective of trade priorities in Yemen and help the country integrate into the global economy.

Facts and Figures

  • Ranked 133 out of 169 countries in the Global Human Development Report 2010, Yemen is one of the poorest countries in the Arab region facing multiple challenges and crises
  • Unemployment among 15-24 age groups is 52.9% and 44.4% among the 25-59 years group while job creation opportunities remain to be very limited
  • Poverty ratio increased from 35% in 2006 to over 50%
  • Consequently, resulting in increased poverty rates living in less than $ 2 a day and most of the disproportionately affected poor groups include women, children, small scale farmers and sharecroppers, landless labour, nomadic herders and artisanal fishermen who are spread over 133,000 small rural settlements
  • High population growth rate of 3% adding annually additional new mouths to feed and new labour force seeking for employment opportunities
  • Approximately three-fourth of the people live in rural areas and 10 million are food insecure of which approx 5 million are now severely food-insecure and the target of humanitarian assistance
  • 70% of government revenue financing comes from oil export, while other promising economic sectors are underutilized due to weak business enabling environment, limited access to finance and investment opportunities.
Related Reports
Macroeconomic Policies for Growth, Employment and Poverty Reduction in Yemen

This report on the Macroeconomics of Poverty Reduction in Yemen is part of a global UNDP-supported project that started in 2001 and has grown to encompass policy-oriented research, advisory services and capacity development in 25 developing countries. Among the Arab States, UNDP has supported similar studies in Morocco, Sudan and Syria.

Poverty Assessment 2007

From what was historically known as “Arabia Felix” – a land of prosperity and happiness – Yemen has become the most impoverished among the Arab countries.