Addressing Yemen’s Twin Deficits: Human and Natural Resources

The recent attack on the U.S. embassy in Yemen comes at a time when the country is simultaneously confronting two major deficits: its human capital is vastly underdeveloped and its natural resources are depleting. As the U.S. redoubles its efforts at curbing terrorism, it should also commit to fighting pervasive poverty in Yemen.

Yemen is the poorest country in the Middle East region and one of the poorest in the world. Over 75 percent of its population is under the age of 25. Yemen’s population will triple by 2050, and its youth population will continue to grow for the foreseeable future. A large youth population can be a force for stimulating economic growth and fostering stability but only if the country’s resources and institutions can be harnessed.

In a forthcoming Brookings working paper, Ragui Assaad, Ghada Barsoum, Emily Cupito and Daniel Egel argue that with a dwindling supply of natural resources, high levels of poverty, and policies and institutions that work against youth instead of for them, Yemen faces significant challenges in helping youth to reach their full potential.

Yemen has a large deficit in human development. Education access and quality is limited, school enrollment is low, retention is poor and illiteracy is widespread. While these challenges are prevalent across the country, they disproportionately affect young women, the poor and rural residents. A fifth of youth never enroll in school and many of those who do enroll, drop out before completing basic education. Delayed enrollment into school is also a serious problem, as only 20 percent of children enter the education system at the recommended age of six.

Poor educational attainment means youth are ill-prepared to contribute economically: a problem that will only escalate as the country’s youth population grows larger and larger. This is reflected in the obstacles youth face in securing access to gainful employment. Young men with low levels of education end up in low wage work or migrate in search of better opportunities. Youth with education credentials queue for public sector employment meaning that, as the number of youth in Yemen grows, the competition for desirable public sector jobs is also intensifying.

The youth are coming of age at a time when the country’s limited natural resources are under a great deal of pressure. Water resources are being depleted more quickly than they can be replenished, and the oil reserves that have provided a major source of income in recent years are veering close to exhaustion. The limited arable land must be used to productively employ and support a growing rural population, while efforts are made to diversify and support other developing sectors of the economy.

These twin deficits underlie the importance of greater development aid to Yemen. Over the last four years, with some international assistance, the Yemeni government developed an ambitious youth strategy to improve education, health and employment outcomes for its young citizens. However limited foreign aid and weak institutional capacity has kept the strategy from turning its vision into reality. In 2007, the United States spent $10 million in non-military development aid in Yemen and was set to spend less than that in the 2008 fiscal year. This represents a tiny fraction of the U.S. aid budget for the region. Marking a step in the right direction, the U.S. government recently signed a $3 million agreement to assist young people by focusing on skills development and work opportunities. While this attention to the role of youth is well-received, the challenges facing Yemen require greater resources and long-term commitments. If Yemen is to prosper and contribute to regional stability, the international community must do its part in promoting the country’s economic development.

For more information on development trends in Yemen, read and listen to segments of the author’s interview with Dr. Ragui Assaad.