967] (1) 238843 through 238852
FAX: [967] (1) 251563

Flag: three equal horizontal bands of red (top), white, and black;
similar to the flag of Syria which has two green stars and of Iraq
which has three green stars (plus an Arabic inscription) in a
horizontal line centered in the white band; also similar to the flag
of Egypt which has a symbolic eagle centered in the white band

@Yemen:Economy

Overview: Whereas the northern city Sanaa is the political capital of
a united Yemen, the southern city Aden, with its refinery and port
facilities, is the economic and commercial capital. Future economic
development depends heavily on Western-assisted development of the
country's moderate oil resources. Former South Yemen's willingness to
merge stemmed partly from the steady decline in Soviet economic
support. The low level of domestic industry and agriculture has made
northern Yemen dependent on imports for practically all of its
essential needs. Once self-sufficient in food production, northern
Yemen has become a major importer. Land once used for export crops -
cotton, fruit, and vegetables - has been turned over to growing a
shrub called qat, whose leaves are chewed for their stimulant effect
by Yemenis and which has no significant export market. Economic growth
in former South Yemen has been constrained by a lack of incentives,
partly stemming from centralized control over production decisions,
investment allocation, and import choices. Yemen's large trade
deficits have been compensated for by remittances from Yemenis working
abroad and by foreign aid. Since the Gulf crisis, remittances have
dropped substantially. Growth in 1994-95 is constrained by low oil
prices, rapid inflation, and political deadlock that are causing a
lack of economic cooperation and leadership. However, a peace
agreement with Saudi Arabia in February 1995 and the expectation of a
rise in oil prices brighten Yemen's economic prospects.

National product: GDP - purchasing power parity - $23.4 billion (1994
est.)

National product real growth rate: -1.4% (1994 est.)

National product per capita: $1,955 (1994 est.)

Inflation rate (consumer prices): 145% (1994 est.)

Unemployment rate: 30% (December 1994)

Budget:
revenues: $NA
expenditures: $NA, including capital expenditures of $NA

Exports: $1.75 billion (f.o.b., 1994 est.)
commodities: crude oil, cotton, coffee, hides, vegetables, dried and
salt