As Yemeni Economy Grows, Poverty Deepens

20 April 2010

A shop owner sits in front of his shop waiting for customers at the Bab el-Yemen old city market of the capital Sana'a, 03 Jan 2010

Officially, Yemen's economy is growing. Unofficially, the nation appears to be trapped in a disastrous downward economic spiral.

On the streets of Sana'a, anger over price hikes is growing almost as fast as the prices. In the past few months, the cost of wheat and sugar has more than doubled they say, and cooking gas, in constant short supply, can cost three times as much as it did a few months ago.

And while Yemen's Central Bank projects economic growth as high as eight percent in 2010, to average Yemenis, the idea that their country's economy is growing is laughable.

Price hikes

Ibrahim Musleh al-Farzay sells snacks, cigarettes, and canned food from his Sana'a shop. He says some items in his store have gone up as much as 50 percent in recent months. In the summer of 2005, price hikes in Yemen sparked riots that killed dozens of people, and injured hundreds. Two young men died in the chaos right outside his shop, al-Farzay says. If things do not get better soon, he thinks the riots will start again.

But even by modest accounts, Yemen's economy is growing. Oil exports fill about 70 percent of the government's coffers. And although known oil supplies are drying up, Yemen has begun exporting liquefied natural gas. The project, worth more than $4 billion over five years, is hailed by the government as an economic savior.