The industrial sector is small and is hampered by wars, a lack of skilled labor, high energy costs and a limited domestic market. The state owns many major industries and has often received support from abroad to build them. Small business is widespread and many crafts have centuries-old traditions.
In 2010, about one fifth of Yemen’s workforce was estimated to work in industry, often in small family businesses. Almost half of the companies engaged in food processing.
Oil refining alone accounted for half of industrial production. The most important industrial plant in southern Yemen is the state oil refinery in Aden, which today is quite old and has also been subjected to terrorist acts. There is also a smaller refinery in Marib, but plans to build new plants have not been completed.
The area around Aden is Yemen’s most important economic center and became an economic free zone in 1991. In northern Yemen, some modern factories have been built with foreign support for the production of textiles, cement, cigarettes and salt. But war reporting, not least during the first year of Saudi-led air strikes in 2015, has indicated that a number of industrial companies have been hit by bombs – with killed personnel, damaged machinery and demolished buildings as a result. In 2016, Human Rights Watch released data on civilian structures, including factories and power plants, which were destroyed in a bomb attack. HRW considered that the attacks may have been part of deliberate economic warfare.
A measure of the prevailing conditions was delivered in 2018 by the British newspaper The Times, which had visited a prostitution workshop in Marib and described protest production as the country’s “only growth industry”. Bomb attacks and abandoned mines, which injure hundreds of people each year, ensure that local manufacturing of such medical equipment must continue long after the war in Yemen ends (see Calendar).
Oil and oil products accounted for almost 90 per cent of export earnings in 2010-2012. It is very worrying about trade since the war has since knocked out most of the production.
The trade balance showed thanks to the plus oil from the mid-1990s, but it was negative in the years 2007-2009, when the oil price was low. A global fall in oil prices also occurred in 2014–2015, but by then Yemen was already entering a full civil war with neighboring countries, and production ceased almost entirely (see Natural Resources, Energy and the Environment).
In addition to oil, Yemen has been exporting agricultural products on a small scale in the last few decades, largely without processing. These include fish, hides and coffee. Exports are mainly to Asia – China, Thailand and Japan – while the EU and other countries on the Arabian Peninsula have the largest share of imports. Smuggling and an extensive black market mean that a large part of the trade is not included in the official figures.
It was thanks to the coffee Yemen was once able to open a door to the world market. The name of the city of Mukha was spread throughout the world, to us as “suede”. Coffee cultivation still exists in Yemen’s highlands. Production increased for several years and about half were exported before the war escalated in 2015. Foreign aid agencies supported irrigation projects, and the Yemeni government hoped that the role of coffee for the country’s economy would increase. However, the large world market had long ago been taken over by plantation growers, mainly Latin America.
In 1999, Yemen gained observer status in the World Trade Organization (WTO). The negotiations then went on for a very long time, but in June 2014 Yemen finally became the 160th WTO member.
FACTS – FOREIGN TRADE
US $ 473 million (2016)
US $ 6,798 million (2016)
– US $ 2,419 million (2016)
Commodity trade’s share of GDP
40 percent (2018)
Main export goods
crude oil, oil products
Largest trading partner
IKina, Thailand, India
Tourism under stable conditions could be an important source of income for the country. The landscape is beautiful and Yemen is awash with traces of ancient cultures. The capital city of Sanaa and the cities of Shibam and Zabid are listed on UNESCO’s World Heritage List for their unique tower architecture.
Poor infrastructure is an obstacle. Many attractions are difficult to access, and the tourism industry is poorly developed. However, the worst problem is the political conditions. Civil war and economic chaos, kidnappings and terrorist attacks against non-Muslim tourists (see Current policy) destroy all investment in the tourism industry.
In 2010, 536,000 tourists visited Yemen. This was a significant increase from the previous year. In 2009, two thirds of visitors came from other countries in the Middle East, mainly from Saudi Arabia. However, the security situation was already about to worsen. As a result of the war and chaos that now prevails in Yemen, since 2015 even with air strikes and other involvement of neighboring countries’ armed forces, tourism has ceased.
Since 2007, the Swedish Foreign Ministry has advised against all trips to Yemen due to the security risks.
FACTS – TOURISM
Number of foreign visitors per year
366 700 (2015)
US $ 116,000,000 (2015)
The share of tourist income from exports
6.2 percent (2015)