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http://www.chathamhouse.org.uk/publicat ... -/id/2173/

All of this leaves the Central Bank of Yemen in an impossible position. It controls around four billion dollars in foreign assets, around half of which can be mobilised in the near to medium term, while the remainder takes the form of equity stakes in investments at home and abroad which will be harder to access. Yemeni businessmen report that dollar reserves at the rest of the country's commercial banks have largely been exhausted.


With reserves in freefall and prices on the rise, the bank is faced with the rapid devaluation of the Yemeni rial and rampant inflation. The rial fell from around 213 against the dollar in January to more than 230 in May, effectively increasing the price of imports. Economists working with the government say that inflation has hit a twelve month average of sixteen percent. They predict that if a political solution cannot be brokered in the next few months, it could reach more than thirty percent by the end of the year.


If the bank were to underwrite oil imports alone, readily accessible reserves would be exhausted in four months, making it impossible to defend the price of the Rial, cutting off access to imports, and causing inflation to spiral out of control. Foreign currency is not just needed to cover the country's energy needs either. Yemen is heavily dependent on food imports. According to government sources, ninety percent of its wheat and all of its rice come from outside of the country.

Like all oil-importers in the Arab world, time is running out for their populations...

I'm hearing that food is getting very short. Widespread fuel shortages.

We think of Yemen in political terms - of uprisings and the Arab Spring or Islamic fundamentalism.

I think we will see it more in African terms in a few months - widespread famine and people too hungry to fight.

This was always the inevitable end result.

What's Arab unity like? Is there any chance that Saudi Arabia could step in and help yemen out. I know yemen has a relatively large population in Arab terms, and is the only semi-democracy in the area. But surely, a failed state isn't in Saudi Arabia's interests? Or does yemen being weak suit Saudi Arabia?

Yemen is tribal, like most of the area. I don't know the Shia/Sunni
split, but I do know the West and SA are supporting the incumbent over the popular uprising, because they see descent into factional failed state as likely. Terrorist /Pirate breeding ground. SA is busy supporting half the Arab world already, financially. That is where a lot of the oil billions are going.

There is not enough food to go round, and even SA does not have bottomless pockets.

The one thing you won't see is BBC news headlines reporting famine in Yemen, with crying dying Arab babies held by pop stars all over the box.

Saudi Arabia will try and prop up the disintergrating Yemeni state, and it may work in the short-term but the countries problems are structural and long-term and will only postpone the inevitable.

State collapse and severe reduction in population.

Lord Beria3 wrote: Like all oil-importers in the Arab world, time is running out for their populations...

Only in the Arab world?

No

SO
They may try, but SA has problems of its own.
They cant provide a welfare state for the planet, a failed yemeni state would be problematic, but it would likely be cheaper to wipe them out than pay them off.

Time to resurrect this thread in light of recent developments

Lord Beria3 wrote:Saudi Arabia will try and prop up the disintergrating Yemeni state, and it may work in the short-term but the countries problems are structural and long-term and will only postpone the inevitable.

State collapse and severe reduction in population.

The pro Saudi President Hadi has been usurped from office by pro-Iranian Shia Houthi rebels.
So what do the Saudis do? Launch air strikes - nominally in aid of Hadi's beleaguered and crumbling forces although it will more likely assist Al-Qaeda in the Arab Peninsula.
This has got the potential of getting very ugly very quickly -and could backfire badly on KSA and the other GCC

Interesting commentary over at Moon of Alabama: The Wahabbi's War on Yemen

Angry Arab: The War in Yemen: How To Read It

That's one way to look at it, Kings and Princes and big power politics.

A few years ago when there was a sudden spike in global food prices of some 10% I posted a comment here about my friend, an agricultural adviser, who had been working in The Yemen. He pointed out that a significant proportion of people were so poor that typically 80% of their money was spent on food. When food prices rise they have nothing to spare with which to pay, so they eat less. That is not sustainable. The farmers changed from growing food and cash crops such as coffee to growing Khat, which provides much more cash. Of course it also pushes food prices up even further for those without land.

In Syria the worst drought since the invention of agriculture in the Neolithic meant that a million farmers abandoned their land and headed for the cities to search for help from their government. There was no help so they turned to religion and guns.

The Yemen has been a turbulent place for a long time but while a sufficient proportion of the population were busy planting for the next harvest or had enough money to buy the next meal, a sort of peace could reign despite bad governance and crazy religions.

A similar story has been told in Somalia and other places in sub-Saharan Africa.

The point is, commentators are all too quick to look at which Kings and Princes are to blame and too easily ignore the many small people whose next meal is dependent on a combination of the natural environment and the quality of governance.

Biff, there hasn't been a "sort of peace" in Yemen in its recent past. It has always been a very tribal and fragmented society. Alliances are constantly shifting.

The point you are trying to make is, to a large degree, irrelevant. YOU DO NEED TO LOOK AT THE ACTIONS OF KINGS & PRINCES - IT IS BECAUSE OF THEM THAT WEAPONRY IS FLOODING IN. You clearly do not understand the history of Yemen, nor the British involvement there, Biff.

Read and watch: Adam Curtis: Yemen: the Return of Old Ghosts

Didn't Yemen oppose the US on some UN issues? That might be a major catalyst.

emordnilap wrote:Didn't Yemen oppose the US on some UN issues? That might be a major catalyst.

Palestine, the illegal invasion of Iraq and Afghanistan, I'd hazard a guess at.

Meanwhile, an interesting summary of the present conflict (although it doesn't explain Yemen's collapse in oil production) can be found at Moon of Alabama: Why Wage War on Yemen?

Moon of Alabama wrote:The bombs have hit civilian refugee camps, food factories, a diary and electric, water and communication infrastructure.

Shame. Might have made for interesting reading.