Policy Briefs

Generating New Employment Opportunities in Yemen

Generating New Employment Opportunities in Yemen

Executive Summary

Decades of political instability and cyclical armed conflict have curtailed Yemen’s economic growth, job creation and labor productivity. Before the current conflict, much of the country’s working population was engaged in unskilled labor, working in rural agriculture or informally employed in small businesses. More recently, the ongoing conflict has destroyed normal commerce and left millions of Yemenis without a means of supporting themselves or their families. Even those not directly affected by the fighting now face brutal economic hardship. The economic crisis has become the primary driver of what the United Nations has called the world’s largest humanitarian catastrophe. In the midst of this crisis, the need for job creation is paramount.

As part of the “Rethinking Yemen’s Economy” initiative, 22 of Yemen’s leading socioeconomic experts convened in Amman, Jordan on July 14–16, 2018 for the third Development Champions Forum. Sharing a collective sense of urgency to address Yemen’s worsening economic and humanitarian crises, the Champions discussed job creation in Yemen and developed potential strategies to combat increasing levels of unemployment and economic hardship. This policy brief presents the outcome of their discussions.

The Development Champions recommend that policy makers seek to create jobs immediately by investing in sectors that have historically been neglected in favor of oil and gas activities. This includes investing in agriculture, developing the fishing industry, expanding mining operations, and linking reconstruction efforts to the local construction sector. In the medium term, policy makers should look to new initiatives, such as constructing a free zone on the Yemen-Saudi border. By providing these livelihood opportunities in the immediate and medium term, policy makers will also help limit the number of Yemenis who feel forced to join an armed party to conflict because of economic necessity.



Prior to the current conflict, the workforce in Yemen, then totalling 4.86 million,[1] was largely uneducated, informally employed, and male-dominated.[2] Only 23 percent of the workforce had received secondary education, while only eight percent had received tertiary education.[3] Roughly 30 percent of jobs were in the agricultural sector, followed by trade (wholesale or retail) at 23 percent. This was reflected in the two most common occupations among Yemenis: crop grower and shop salesperson.[4] The majority of employment in Yemen was in the informal sector (73.2 percent). Of Yemen’s 4.2 million employed, 3.27 million were engaged in “own-use production,” including 2.4 million subsistence foodstuff producers.[5]  Roughly 30 percent of the employed population were “own-account” or self-employed workers.

Working abroad has long been an important source of employment for Yemenis.[6] As of 2015, an estimated one million Yemenis worked abroad.[7] Of these, the majority were males engaged in the service sector, largely in low-paying occupations.[8] Roughly 70 percent of Yemenis working abroad had attained only primary education, and roughly 80 percent were from rural households.[9] About half had been unemployed before leaving Yemen.[10] According to a source at the Central Bank of Yemen (CBY), remittances made by Yemeni expatriates totalled an estimated US$3.8 billion annually from 2012-2015.[11] This represented roughly 10 percent of Yemen’s gross domestic product (GDP) for these years.[12] An estimated 6.5 percent of Yemeni households in 2014 were dependent on income from remittances for daily basic needs.[13] An estimated 90 percent of total remittances to Yemen originated in GCC countries, particularly Saudi Arabia.[14]

Employment in Yemen was heavily imbalanced in terms of gender before the conflict. As of 2014, women accounted for only seven percent of employed Yemenis.[15]  While 66 percent of working-age men participated in the labor force, only six percent of women were employed or looking for work.[16] This statistic had decreased sharply over two decades: as recently as 1996 women made up 29 percent of the workforce.[17] Among Yemeni women in the workforce prior to the conflict, the unemployment rate was 26 percent (compared to 12 percent among men).[18] On average, employed women worked fewer weekly hours than men (34 compared to 44 among men) and earned less: the average monthly rate for women from 2013-2014 was 40,400 Yemeni rials (YR) compared to YR 53,300 among men).[19]

Yemen has a young and rapidly growing population. An estimated 40 percent of Yemenis are under the age of 15.[20] At 2.4 percent, the annual population growth rate is one of the highest in the world.[21] Unemployment among youth is high: as of 2010, 45 percent of Yemeni youths were unemployed.[22] With each year, the need for jobs for Yemen’s youth will only increase.


Impact of Conflict on Yemeni Livelihoods

Ongoing fighting has made it harder for Yemenis to support themselves and their families. The country’s economic output has decreased sharply during the conflict: its GDP contracted by an estimated 37.5 percent cumulatively since March 2015 and October 2017.[23] The conflict has interrupted the country’s oil exports, drastically reducing public revenues and Yemen’s reserves of foreign currency. The YR has depreciated significantly and per-capita purchasing power has declined.[24] The Saudi-led coalition’s sea blockade of Houthi-held ports has greatly restricted commercial and humanitarian deliveries while increasing the cost of imports that do get through. Physical damage to public and private infrastructure has affected the ability of businesses to operate.[25]

The costs imposed by conflict have had a drastic impact on Yemenis in the workforce. Most of the country’s 1.2 million public sector employees have gone without an income since 2016, when the CBY suspended most public sector salaries.[26] Businesses have laid off an estimated 55 percent of the private sector workforce.[27] Businesses have also, on average, cut their hours of operation in half.[28] More than a quarter of businesses in the industry, trade and services sectors have ceased operations altogether.[29]

The agriculture sector, which provides roughly a third of Yemen’s jobs, has seen farmers forced to abandon their land.[30] This has been due to several factors, among them the proximity to the fighting – as ongoing security discourages the private sector to invest with farmers – as well as rising fuel prices, costlier irrigation, and ongoing shortages of commodities essential to food production.[31] Prior to the conflict the agriculture sector was reliant on the government for financing; in the midst of the ongoing conflict and economic crisis, the government has made available no assistance to mitigate these costs and shortages. While some farmers have turned to solar power to supplement their energy needs, most cannot afford to do so.  In 2017, the United Nations Food and Agriculture Organization (FAO) provided agricultural assistance to almost 600,000 farmers in Yemen.[32] At the same time, the blockade by the Saudi-led coalition has restricted Yemen’s exports of agricultural products, impacting the incomes of farmers and fishers.

For Yemenis employed in the fishing industry, the conflict has significantly decreased fishing activities. On the Red Sea coast in particular, increased fuel prices, a lack of cold storage, and limited access to fishing areas due to insecurity has resulted in the closure of many fishing sites.[33] The governorates of Taiz and Hudaydah have seen an estimated decrease of 75 percent in traditional fishing, while fishing in other governorates has halved since 2014.[34]

As incomes disappear, the Yemeni people have increasingly come to rely on remittances and humanitarian aid. As the Development Champions noted in the Forum, Yemeni breadwinners, faced with the daunting prospect of having to support themselves and their families in the absence of viable economic alternatives, are incentivized to seek an income through joining one of the many belligerent parties to the conflict. These Yemenis at risk include the hundreds of thousands of expatriates returning from Saudi Arabia following changing labor regulations in that country.[35]

Designing job creation mechanisms is thus not merely a question of Yemenis gaining employment in order to access basic needs and stem the steadily worsening humanitarian crisis. Job creation becomes a preventive measure against the self-perpetuating cycle of armed conflict, and in particular would help prevent youth from joining armed extremist groups.



While creating new jobs is necessary, it will be difficult for them to lead to a net gain in employment if currently existing jobs are not protected and maintained. A basic blueprint for achieving this is: (1) establish a baseline for the existing workforce at the appropriate level of detail (geographic area, sector, gender, profession, age group, education level, pay level, etc.); (2) identify those jobs that are potentially at risk and why; (3) establish an intervention plan to protect, sustain and enhance these jobs.

When designing practical job creation mechanisms, the Development Champions stressed throughout the forum that policy makers must acknowledge the current realities on the ground in Yemen. They argue that some of the challenges created by the conflict can be used to generate jobs. For example, in the course of the conflict, Yemeni cities have witnessed high levels of “reverse migration:” many Yemenis have abandoned their homes in urban centers and sought refuge in the rural areas from which their families originated. At the same time, the conflict is making it difficult and costly for Yemeni traders to import food from abroad.[36] These dynamics – an increase in the available rural workforce and increased demand for domestic food production – can be viewed as an opportunity for investment in Yemen’s agricultural sector.

Successful job creation in one geographic area or economic sector should also be viewed an opportunity to experience share and replicate success in other areas. For example, successful approaches to creating jobs in the agriculture sector in one governorate could potentially be replicated in other governorate – the idea being to identify success and leverage it.

Yemenis are mercantile by nature, and thus job creation schemes should focus on identifying pre-existing local potential and empowering it to grow and thrive, rather than trying to transplant foreign economic models into the Yemeni sphere. Empowering local potential would include investing in training programs to upgrade local business practices, knowledge sharing to spur local innovation, and technological infrastructure to increase efficiency and output. Such would be a powerful catalyst for a dynamic business climate that creates jobs and spurs rapid social progress.

The Government of Yemen has a crucial role to play in helping to facilitate private sector job creation. Primary among these is a lack of revenue. One means to help tackle this issue is to begin to reduce the high level of ‘ghost employees’ – workers that do not exist or do not show up for work – on the public payroll. While this recuperation of public funds would require minimal resources, it would require sustained political will.

Prior to the conflict, the central government also depended heavily on the hydrocarbons sector for generating revenue. This contributed to the marginalization of other sectors. With Yemen’s oil and gas facilities coming back online, the value of hydrocarbon production, domestic market sales, and exports are estimated to reach USD $1 billion in 2018. As government revenues increase, it is imperative that public spending prioritize economic diversification and job creation, particularly in previously marginalized sectors. Specifically, the agriculture, fishing, mining, and construction sectors should be expanded and modernized in order to catalyze job creation.


Sectors to examine for potential economic development and job creation


Before the conflict, considerable donor support existed for developing the agricultural sector in Yemen.[37] Domestic policy makers and international donors can build on this existing framework to create jobs via a range of agricultural development projects and programs:

  • Provide funding for agricultural equipment and production inputs. While further study is required to assess the specific needs of farmers in the various areas, this input could range from expensive systems (such as solar-powered irrigation networks), to basic capital infrastructure (such as greenhouses) to more simple inputs (such as fertilizer and seeds).
  • Provide farmers with the training and consultation necessary to enhance the quality of their products.
  • Utilize renewable energy sources. Diesel-operated irrigation pumps can be converted to solar-powered pumps, allowing farms that have ceased to operate due to a lack of diesel to be reactivated. Building solar capacity is a way to link farmers and businessmen, thereby bolstering the role of the private sector in agriculture. This would bring benefits to a number of interconnected agricultural areas — though discretion would be necessary not to overtax Yemen’s scarce water supplies.
  • Invest in sustainable forms of sourcing water and reducing water usage. While further study is required to assess the specific circumstances of farmers in the various areas, such inputs could include both individual investments (such as water tanks) to larger infrastructure projects (such as building dams to conserve rain water).
  • Fund agricultural small and medium-sized enterprises (SMEs).
  • Explore means to increase production and export of Yemeni honey and coffee. The production of two of Yemen’s most famous products should be scaled up, and exports expanded to more foreign markets. A value chain also needs to be developed for both products.


Fish along Yemen's coast are plentiful. One Development Champion familiar with Yemen’s fishing industry estimated the Yemeni fishers land between 180,000-220,000 tons of fish per year. Much of the fishing is artisanal, using traditional methods, and thus even moderate equipment and training upgrades have the potential to substantially increase the sector’s economic potential. While further study is required regarding the specifics of any fisheries support initiative, viable avenues to consider are:

  • Support programs that facilitate the expansion of SMES in the fishing industry, which should also involve providing fishers with modern training and equipment.
  • Create retraining centers in major fishing areas. The international community can provide expertise and teach skills to current fishermen and youth. Besides training fishers to use modern equipment, training units can teach skills needed throughout all stages of the value chain: support team, cold storage, transport, marketing, and sales.
  • Establish modern offloading, storage, packaging and distribution infrastructure for the fishing industry.
  • Establish competitive local fish markets in nearby cities. This will shorten the distance from fishers to consumers, making fish more affordable for Yemenis. Provide better infrastructure for fish markets and establish quality standards.
  • Enforce fishing laws and regulations. A code of conduct for improving the capacity of fisheries was developed in 2006 but has largely not been followed. Yemen’s Law No. 2 of 2006 encourages the private sector to create a national fishing fleet. However, according to a fishing industry source, authorities in a number of governorates (notably al-Mahra and Aden) have restricted fishing operations.
  • Undertake scientific study of the main Yemeni fishing grounds and major fish species populations. Countries with highly advanced fisheries could assist the Yemeni government in assessing the health of commercial fish stocks and developing and enforcing sustainable catch quotas.


Yemen is rich in minerals.[38] According to one Development Champion, high-quality marble and limestone deposits exist in the mountain range that spans over 100 km from Aden to Lahj and Abyan governorates. An expanded mining industry could support jobs along an entire supply and production chain.

  • Explore the potential for raw mineral materials that are plentiful in Yemen to become the inputs for industrialization (ie. domestic production chains that cover the spectrum from raw materials to finished product). Potential viable avenues in the regard include:
    • Cement production (the raw materials for such are abundant in Yemen).
    • Glass and ceramics (there are already existing factories, though they generally require reactivation).
    • Paint production.
    • Pure raw carbonate materials available in Yemen’s eastern region can be used in a large number of industries.
    • Perlite ores are available in the quaternary volcanic range in Western Yemen[39] and are involved in many industries.
    • Zeolite ore is available in large reserves and can be used in agriculture, sewage treatment and other industries, with large demand in the global market.
    • Marbles of various types and colors are available in large quantities, as well as granite. Building and decorations stones are locally available in large quantities and excellent qualities, for which there will be high demand for them when reconstruction begins.
  • Conduct further research into prospects for mineral deposits and resources. Build on the research of the Yemen Geological Survey and Mineral Resources Board (GSMRB), which operates under the authority of the Ministry of Oil and Minerals, and make the research available to potential international investors.


The conflict has inflicted an estimated US$19 billion in damage to Yemen’s infrastructure.[40] As Yemen faces a great deal of reconstruction work, reconstruction and relief efforts offer an opportunity for immediate job creation. A functioning construction industry will also support the expansion of other sectors.

  • Begin large-scale reconstruction efforts in areas that are secure and free of conflict. The experience that individuals can gain from working on construction sites geared toward major infrastructure reconstruction can then be carried forward to local development projects in the medium and long term.
  • Repair dams and flood channels. This will raise production levels in the agricultural sector, enabling it to absorb more employees.
  • Rehabilitate historic sites and tourist attractions. This may help lay the groundwork for potential long-term development in the tourism sector. Rehabilitating historic sites will also help restore national pride and a sense of Yemeni identity.


The mid-term potential for a free economic zone on the Yemen-Saudi border

  • Explore the potential for a free economic zone in al-Wadeah, located in Hadramawt governorate on the Saudi-Yemen border. A free economic zone in al-Wadeah could take advantage of Saudi capital to employ Yemeni labor. If the free economic zone successfully secured an export market, it could also help improve Yemen’s balance of payments. Its cost to the Yemeni government should be minimal, as its primary investment would be in the legal and political framework. The viability of this option, however, would likely depend on a general cessation of hostilities.


[1] International Labour Organization (ILO), Yemen Labour Force Survey 2013-14 (Beirut: International Labour Organization, 2015), 7, accessed August 3, 2018,

[2]  World Bank, The Republic of Yemen: Unlocking the Potential for Economic Growth, Report No. 102151-YE (Washington, DC: World Bank, 2016), xi,  accessed August 3, 2018,

[3] ILO, Yemen Labour, 7.

[4] ILO, Yemen Labour, 7.

[5] ILO, Yemen Labour, 6.

[6] Yemen Ministry of Planning and International Cooperation, “Yemeni Expatriates’ Remittances … Last Resource Under Threat,” February, 2018, 1, accessed August 3, 2018,

[7] Estimates of Yemeni expatriates vary. The World Bank estimates the number at between 1.0 and 1.2 million as of 2014; see World Bank, Yemen: Unlocking Potential, 68. The Gulf Research Center estimates 950,000; see “Estimates of the Figures of Foreign Nationals (Selected Nationalities),” Gulf Research Center, accessed September 11, 2018, The ILO’s Labour Force Survey puts the number much lower, at 103,000 Yemenis living abroad; see ILO, Yemen Labour, 6.

[8] ILO, Yemen Labour, 51; Yemen Ministry of Planning, “Remittances,” 2.

[9] ILO, Yemen Labour, 51.

[10] ILO, Yemen Labour, 51.

[11] Yemen Ministry of Planning, “Remittances,” 1.

[12] Yemen Ministry of Planning, “Remittances,” 3.

[13] Yemen Ministry of Planning, “Remittances,” 5.

[14] Yemen Ministry of Planning, “Remittances,” 2.

[15] ILO, Yemen Labour, 5.

[16] ILO, Yemen Labour, 5.

[17] World Bank, Female Labor Force Participation – Population Reference Bureau, 1998 Women of Our World, as cited in: World Bank, Yemen: Comprehensive Development Review.

[18] ILO, Yemen Labour, 5.

[19] ILO, Yemen Labour, 6.

[20] “Population Ages 0-14 (% of Total),” World Bank Open Data, accessed September 10, 2018,

[21] “Population Growth (Annual %),” World Bank Open Data, accessed September 10, 2018,

[22]  World Bank, Yemen: Unlocking Potential, 6.

[23] “Yemen's Economic Outlook - October 2017,” World Bank, October 11, 2017, accessed August 3, 2018,

[24] Ali Azaki, “International Aid Organizations and the Yemeni Private Sector: The Need to Improve Coordination in Humanitarian Crisis Response,” Sana'a Center for Strategic Studies, March 16, 2018, accessed August 3, 2018,

[25] According to the United Nations Office for Humanitarian Affairs (OCHA), “From 1 October 2016 to 30 September 2017, a total of 8,878 conflict-related incidents, including airstrikes, armed clashes, and shelling, were reported throughout Yemen. Approximately 82 per cent of these incidents took place in five governorates: Taiz, Sa’ada, Al Jawf, Hajjah, and Sana’a.” See United Nations Office for the Coordination of Humanitarian Affairs, Yemen Humanitarian Needs Overview 2018 (New York: United Nations Office for Humanitarian Affairs, 2017), 5, accessed August 3, 2018,

[26] Noah Browning, “Unpaid State Salaries Deepen Economic Pain in Yemen's War,” Reuters, January 26, 2017, accessed August 3, 2018,; Mohammed Yahya Gahlan, “No Light at End of Tunnel for Yemen’s Economy,” Al-Monitor, March 8, 2018, accessed August 3, 2018,

[27] OCHA, Yemen Humanitarian Needs, 7.

[28] World Bank, Toward a Blueprint for the Recovery and Reconstruction of Yemen – October 2017, as cited in OCHA, Yemen Humanitarian Needs.

[29] World Bank, Blueprint, as cited in OCHA, Yemen Humanitarian Needs.

[30] OCHA, Yemen Humanitarian Needs, 7.

[31] “Yemen Situation Report November 2017,” Food and Agriculture Organization, November 2017, accessed September 10, 2018, OCHA notes that this “is similar to the situation in 2015 during which an estimated 40 per cent of the farmers abandoned their agricultural land.” See OCHA, Yemen Humanitarian Needs, 7.

[32] “Yemen Situation Report November 2017.”

[33] Yemen Food Security Information System (FSIS) Development Programme, “Yemen Food Security Update,” ReliefWeb, October 2016, accessed September 10, 2018,

[34] “Severe Food Insecurity Widespread in Yemen,” Food and Agriculture Organization, June 21, 2016, accessed September 10, 2018,

[35] Bethan McKernan, “Yemen Civil War: Saudi Expulsion of Yemeni workers Swells Houthi Ranks,” The Independent, March 11, 2018, accessed August 13, 2018,

[36]OCHA, Yemen Humanitarian Needs.

[37] In 2014 the FAO proposed a US$145 million budget for its 2014-2018 Plan of Action for Yemen; see Food and Agriculture Organization, Yemen: Plan of Action 2014-2018 (Rome: Food and Agriculture Organization, 2014), 7, From 1990-2013, the FAO contributed roughly US$60 million to agricultural programming in Yemen; see Food and Agriculture Organization, FAO Country Programming Framework (CPF) Republic of Yemen (Rome: Food and Agriculture Organization, 2013), 12, accessed September 10, 2018, The World Bank, for its part, allocated US$43 million to its Rain-Fed Agriculture and Livestock Project from 2006-2014; see World Bank, Yemen - Rainfed Agriculture and Livestock Project (Washington, DC: World Bank Group, 2015), accessed September 10, 2018,

[38] Waseem A. Abdulameer, “The Mineral Industry of Yemen,” United States Geological Survey, 2014, accessed September 10, 2018,; World Bank, Yemen Mineral Sector Review, Report No. 47985-YE (Washington, DC: World Bank, June 2009), accessed September 10, 2018,

[39] Joel Baker et. al., “Petrogenesis of Quaternary Intraplate Volcanism, Sana'a, Yemen: Implications for Plume-Lithosphere Interaction and Polybaric Melt Hybridization”, October 1997, Journal of Petrology 38(10), accessed October 3, 2018, available at

[40] OCHA, Yemen Humanitarian Needs, 8.

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