For decades prior to the ongoing conflict, Yemen had been vulnerable to recurring budget deficits due to a lack of meaningful fiscal reform, high recurrent expenditures – mainly public sector salaries and fuel subsidies – and an overdependence on oil revenues. Within a year of becoming a unified republic in 1990, the country had already defaulted on its debt obligations to foreign…

Yemen is predominantly a rural country, with over 70% of the population living in 140,000 settlements in impoverished rural areas, and road transportation is essential for its development and overall economic growth. With only about 3,744km of paved rural roads, representing approximately 6.4% of all roads in the country, Yemen’s neglected road network poses significant development…

This paper examines the existing regulations surrounding the use of e-money in Yemen, its attempts to adopt e-money services both before and during the conflict, the major players and state of infrastructure in the sector, and the challenges and prospects facing greater adoption of electronic currency in the country.

In July 2018, the Rethinking Yemen’s Economy initiative published a White paper that explored how the collapse of Yemen’s economy and the fragmentation of central government institutions during the war affected local councils. This new White Paper builds on those findings by examining how local governance has evolved in the intervening years, with a focus on the relationship between local…

Electricity is the backbone of any economy and one of the necessities of modern life. Poor electricity services in Yemen, even before the war, have been one of the key barriers to sustainable economic development and basic service provision (e.g., water supply, health care, education). This paper aims to lay out the top priorities for restoring electricity sector services and reforming the…

Since early 2015, when the onset of war led to the cessation of large-scale oil exports, Yemen has been almost completely dependent on three main external sources to secure foreign currency inflows and stimulate economic activity: foreign humanitarian aid, Saudi financial support to the Yemeni government, and – by far the most significant – remittances from Yemeni expatriates, most working…

In 1997 microfinance was introduced to Yemen. The government, supported by international donor states, viewed it as a strategic tool to alleviate poverty and reduce unemployment by expanding financial services to small and micro entrepreneurs to increase their share of the national economy. However, persistent challenges facing the microfinance industry have stunted its development, reach…

Scarce opportunities to earn a viable livelihood in Yemen have, for decades, driven hundreds of thousands of Yemenis abroad in search of work. Given chronically poor access to education in Yemen, the majority of these have been unskilled or semi-skilled laborers. The proximity of Saudi Arabia and the robustness of its oil-driven economy has made it a natural destination for most of Yemen’s…

This paper presents a detailed analysis of the nature, extent, and evolution of corruption in Yemen from the presidency of Ali Abdullah Saleh to the present day. It first traces the evolution of state capture and administrative corruption over the course of Saleh’s tenure and maps out the patronage system that emerged under his administration. It outlines the official reform efforts…

Yemen has spent much of the past 60 years embroiled in armed conflict and political crisis, with this cyclical instability and insecurity among the primary factors that have stymied both private sector development and the establishment of a strong state with well-functioning public institutions. The vast majority of the Yemeni private sector is made up of small or very small businesses,…