It’s also now clear that Yemen’s government lacks the capacity to exert full control over much of its territory. This has created a refuge from which alQaeda can mount terrorist attacks across the country—and increasingly across the wider world.
At the heart of all these problems is Yemen’s looming economic collapse. Already the poorest country in the Arab world, Yemen is rapidly depleting its oil reserves and lacks any options for creating a sustainable post-oil economy. Unemployment is estimated at 35 percent, higher than what the U.S. faced during the Great Depression.
Accelerating the economic decline is a protracted civil war in the north between Shia insurgents and the Sana’a-based government. The war has caused a refugee crisis and extensive damage to infrastructure, and its costs will result in a major budget deficit next year. (The government is already burning through roughly $200 million in foreign-currency reserves per month.) Even if that war subsides, the worsening economy will likely inflame a roiling secessionist movement in the south. Yemen has often teetered on the brink of collapse, but it has never faced so many interconnected challenges at once. And the stakes have never been greater.
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