Historically, Yemen’s industrial sector has been characterized by small-scale, private initiatives, with 78% of establishments employing fewer than four workers and dominated by food, metal, and textile industries. Yemeni industry’s reliance on imported inputs and weak infrastructure left it vulnerable even before the 2015 escalation of war. Post-conflict damage has been extensive, with…

Yemen is vulnerable to climate change and affected by ongoing conflict, facing worsening environmental crises such as water scarcity, degradation of arable land, and an increasing frequency of extreme weather events. The country’s capacity to address the impact of climate change is severely hampered by limited access to international climate finance. Obstacles include the absence of clear…

This policy brief explores the potential role of innovation-driven enterprises (IDEs) — high-growth ventures built around scalable models and technology — in contributing to economic resilience in Yemen. While IDEs are not yet prominent in the national economy, their emergence in other fragile contexts, including Somalia, Gaza, Rwanda, and Iraq, suggests they could present a viable…

Yemen’s export sector has long suffered from structural weaknesses, but the ongoing conflict has triggered a dramatic collapse. Between 2013 and 2023, annual exports were down 90%, mainly due to disruptions in oil and gas exports, which historically made up 80% of the country’s export revenues. While non-hydrocarbon exports—such as coffee, honey, fish, fruits, and vegetables—have grown in…

The construction sector in Yemen, despite being significantly impacted by political and economic crises and the effects of war, continues to be a crucial sector for the country’s recovery and reconstruction efforts. Within the wider context of the construction sector in Yemen, this brief presents a comprehensive analysis of the contracting sector, which covers the physical work carried out…

Yemen's microfinance sector is a story of both remarkable progress and persistent challenges. Introduced in 1997 with the backing of international donors, microfinancing emerged as a vital tool in the fight against poverty and unemployment. The Social Fund for Development (SFD) acted as a driving force, establishing the Small and Microenterprise Development Unit (SMED) to head this…

Yemen's agricultural communities face a perfect storm of growing ecological threats amid protracted conflict. Flash floods destroy farms, crops, and irrigation systems. Late rains risk drowning mature harvests, and waterlogged fields hinder root growth. Coastal areas battle salinization, and collapsed roads and buried wells hamper recovery. As flooding and changing rainfall patterns…

This policy brief outlines a set of recommendations aimed at empowering local authorities in Yemen to effectively provide services and lead local economic development. The aim is to analyze and draw lessons from three ongoing tracks that seek to empower local authorities in Yemen, while also addressing the challenges and opportunities associated with these efforts.

Since April 2022, the war in Yemen has mutated from a volatile, high-casualty conflict to a protracted stalemate with stable frontlines. The contest is now over the economy, as the Houthi group (Ansar Allah) leverages negotiations and its military power to put fiscal pressure on the internationally recognized government, stoking discontent as public utilities break down and the currency…

This brief provides an introduction to electricity provision in Yemen and explores the viability of specific solar energy applications for Yemen’s fragile context. It further considers the feasibility of partnering with the private sector in the solar energy sector, and finally presents recommendations and practical steps to address challenges to scaling-up investments in this sector in…