The World Bank warned of the economic crisis in Yemen

During president Ali Abdullah Saleh’s rule, and with Yemen getting closer to civil war, the country has become paralyzed due to  lack of fuel, sugar, bread and milk. Electricity outages, which were the source of riots in the south last year have spread throughout the country, and now that Yemen has become a base for  terrorist al-Qaeda activity, the country has become indeed the poorest in the Arab world.
With the wave of popular uprisings in the Middle East for the fifth month, the question of how long the regime of president Ali Abdullah Saleh will last has become related to another question which is: what’s going to remain for the country after the ousted president.
According to Will Picard, the Director of the Peace Project in Yemen, “Yemen’s economy has indeed reached the stage of crisis.” He added, “nobody makes money here anymore except gas stations, weapons traders and foreign newspapers.
More violence
Armed men from the most influential tribe in Yemen on May 24 fought security forces loyal to President Saleh (68 years old) in Sana after one day of refusing to sign an agreement to relinquish authority. Sheik Saleh Al Mihajany who is a member of the tribe said that dozens were wounded or killed in an attack on the home of the tribal leader Sheikh Sadek el-ahmar.
The Interior Ministry stated that 14 policemen were killed, and another 29 were wounded while two are missing. Now the country is suffering from a general lack of cooking gas and petrol. Food products on the shelves at grocery stores are diminishing.
The price of 50 kilograms (110 pounds) of sugar has increased by 22% to reach 11000 riyal (51.5 USD), in the grocery store since the mounting of protests in February.
Yemen is also facing water shortages. The International Bank expects Sana to be the first capital to run out of water by 2025. More than half of the country’s 23 million people are under 20 years old, and about 40 percent of the population depends on the equivalent of 2 dollars a day, according to the United Nations.
In April, the International Monetary Fund reported that “oil constitutes 60% of the governmental revenues and 90% of the exports”. The organization which is situated in Washington said that the oil reserves in the country are expected to deplete within a decade.”
“The economy is not in good condition”, said Saleh. The Minister of Industry and Commerce Hisham Sharaf said that protests in Yemen cost the country about 4 billion dollars increasing the budget deficit which is expected to reach 3 billion dollars and thus threatens to ruin the country.
“Government is starting to be out of money”, said Abd al-Ghani al-Iryani, an independent political analyst in a phone interview from Sana. He added that “the State budget deficit has become close to half. Consequently, there won’t be the sufficient foreign exchange to import food”.
Kamal Rabie, General Manager of the Islamic Central Bank Unity, said in an interview on the 27th of May that the country postponed about 25 billion sales of bonds indefinitely due to political unrests.
The Black Markets
Coinciding with the Yemeni unrests, the Black Market is flourishing all over the country benefiting from the lack of fuel. Khaled Saleh, a shop owner in Sana said that revenues have decreased by 30% since the protests started. al-Rimi said that she “can’t afford the overvalued rates”.
“I bought a cooking machine working with electricity, and this is impossible since electricity goes off four times a day and each time it goes off to three or four hours ”.