Economy of Yemen

Uncommon card · No. 174135

The economy of Yemen is weak and underdeveloped, even more so since the breakout of the Yemeni Civil War which then led to instability and a growing humanitarian crisis. At the time of unification, South Yemen and North Yemen had different but equally struggling underdeveloped economic systems. Since unification, the economy was further harmed by Yemen's support for Iraq during the 1990–91 Persian Gulf War because Saudi Arabia had expelled almost 1 million Yemeni workers, and both Saudi Arabia and Kuwait significantly reduced economic aid to Yemen. The 1994 civil war further drained Yemen's economy. As a consequence, Yemen relied heavily on aid from multilateral agencies to sustain its economy. In return, it pledged to implement significant economic reforms. In 1997 the International Monetary Fund (IMF) approved two programs to increase Yemen's credit significantly: the enhanced structural adjustment facility (now known as the poverty reduction and growth facility, or PRGF) and the extended...

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