- Total external debt: $5.4 billion (World Bank 2005)
- Total external debt payments: Yemen gives $211 million each year to the rich world in debt payments (WB 2005).
- Population: 21.096 million (HDR 2005)
- Percentage of adults who can read and write: 54.1% (HDR 2005)
- Average life expectancy: 61.5 years (HDR 2005)
- HIV prevalence: 0.2% (HDR 05)
- Total health spending: 1.9% of GDP (HDR 04)
- Total spending on debt service payments: 1.4% of GDP (HDR 2005)
- Annual GDP: $15.1 billion (HDR 2005)
Yemen is the focus of the Drop the Debt Fast on Thursday 24 April.
Recent Political History
The Ottoman Turks occupied Yemen territory from 1538 until the decline of their Empire in 1918. The northern portion of Yemen was then ruled by Imams until a military coup took place in 1962. The junta proclaimed it the Yemen Arab Republic, and after a bitter civil war, in which Egypt and the USSR supported the revolutionaries and King Hussein of Jordon supported the royalists, the royalists were finally defeated in 1969.
In Southern Yemen, the British controlled the port of Aden until the 1960s, when the NLF (National Liberation Front) fought against British rule, which led to the establishment of the People’s Republic of Southern Yemen in 1967. Later, in 1979, and under strong Soviet influence, the country became the only Marxist state in the Arab world.
The two countries merged into the Republic of Yemen in 1990 but civil war ensued for several years and political division continues to cause significant problems in the country. There has been violent resistance from the militant Islamic group, Aden-Abyan Islamic Army, who had the goal of overthrowing the government and turn Yemen into a Islamic state.
Yemen is one of the least developed countries in the world and ranks 153 out of 175 countries on the UNDP Human Development Index (2007). As of 2003, it has a per capita GDP of US$520. 42% of the people live in poverty and one in five is malnourished. The civil war in Yemen during the 1990s had very wide-reaching effects on the lives of Yemenis that are still felt today. Illiteracy in Yemen is very high, especially among women, and the standard of education and healthcare is poor, especially in rural areas.
Where has the debt come from?
Despite oil reserves, Yemen is a poor country and its economic prospects have been hindered further by periodic civil war and droughts, and the difficulties of integrating two economies with the unification of Yemen in the 1990s. Coffee used to be the main export and source of foreign exchange, but production has declined with the increased farming of the drug khat. Yemen is dependent on a wide range of imports, and aid and loans help to finance its trade deficit.
Yemen’s $5.4 billion external debt is made up of a large proportion of bilateral debt – some $2.5 billion – and it also owes the World Bank a substantial proportion of its debts: $1.7 billion, as well as smaller amounts to the IMF and other multilaterals.
Debt cancellation status
Yemen is officially classed as a low-income country by the World Bank. However it is considered to have a 'sustainable' debt: this is measured by the size of external debt in comparison to the value of exports, without taking into account domestic debt or what Yemen needs to spend on tackling poverty. It is therefore not eligible for the Heavily Indebted Poor Countries initiative or the Multilateral Debt Relief Initiative. It is theoretically eligible for additional debt assistance from the UK, but has not met the conditions required to qualify.
The New Economics Foundation calculates that Yemen requires 100% debt cancellation in order for the government to meet the basic needs of its citizens, such as health, education and infrastructure, without taxing those living below an ethical poverty line of $3 a day.
Last updated: April 2008
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