Yemen’s official unemployment rate has hovered near 40 percent, with youth unemployment reaching around 45 percent before the conflict. Gender disparities persist, as female unemployment exceeded 40 percent in 2013, driven by limited education and cultural barriers. The collapse of agriculture—formerly employing over half the workforce—alongside a shrinking formal sector has pushed most workers into informal, unstable jobs. Conflict-related destruction of health and education infrastructure further undermines job creation and capacity building. Until security, infrastructure, and governance improve, high unemployment—especially among youth and women—is likely to persist.
Yemen’s primary natural resource is oil, though reserves are considerably smaller than those of its northern Gulf Cooperation Council neighbors and are projected to be depleted within a decade. While explorations have identified substantial liquefied natural gas deposits—offering potential future revenue—these resources are unlikely to match the scale of remittances and income historically generated by oil exports. Consequently, Yemen faces an urgent need to diversify its resource base and develop alternative economic sectors before hydrocarbon revenues fully decline.
Yemen’s economy and society have long been undermined by pervasive corruption—ranked as the 18th most corrupt country globally—which erodes public trust and weakens institutions at every level. Bribery, nepotism, and the misappropriation of public funds are widespread, contributing to inflated government payrolls (including “ghost employees”) and diverting resources away from essential services like healthcare and education. This environment discourages both domestic and foreign investment, stifles private-sector growth, and inflates the cost of doing business. Humanitarian and development aid often fails to reach intended beneficiaries due to opaque procurement processes and opaque distributions, further deepening poverty and social inequality. Without concerted reforms to enhance transparency, strengthen accountability, and dismantle patronage networks, corruption will continue to hamper Yemen’s ability to rebuild its economy and restore public confidence in governance.
Agriculture remains the backbone of Yemen’s economy, employing over half of the workforce and sustaining rural livelihoods in this predominantly agrarian society. Historically, Yemeni farmers cultivated a wide range of crops—most notably exporting prized coffee beans from the highlands alongside fruits like mangoes and bananas. In recent decades, however, the lucrative cultivation of qat, a mildly narcotic leaf chewed for its stimulating effects, has come to dominate agricultural land use. Qat’s high water consumption exacerbates water scarcity in a country where per capita water availability is already among the world’s lowest, reducing the cultivation of food staples and contributing to food insecurity. Moreover, large portions of family income are diverted toward purchasing qat rather than investing in productive farming or household needs, creating social and economic challenges that impede efforts to diversify agriculture and improve national food self-sufficiency.
