Page last updated at 11:36 GMT, Thursday, 20 November 2008

Yemen 'faces crisis as oil ends'

By Martin Plaut
BBC News

Aden oil refinery in southern Yemen (file image)
Experts predict Yemen's oil and gas revenues are about to plummet

Yemen is facing an economic and political crisis as the country's oil resources near exhaustion, a report by a London-based think-tank says.

The Royal Institute for International Affairs warns that instability there could expand a zone of lawlessness from northern Kenya to Saudi Arabia.

It describes Yemen's democracy as "fragile" and points to armed conflicts with Islamists and tribal insurgents.

One diplomat says that the country's prospects get worse every month.

The World Bank predicts that Yemen's oil and gas revenues will plummet over the next two years and fall to zero by 2017 as supplies run out.

Given that they provide around 90% of the country's exports, this could be catastrophic.

An unnamed energy expert is quoted in the report as saying that this points to economic collapse within four of five years time.

Democracy 'distorted'

Although Yemen was the first democratic nation on the Arabian peninsula, its democracy is described as fragile and distorted by what the report calls the northern tribal system of patronage around President Ali Abdullah Saleh.

The president is already facing Islamist insurgents as well as conflicts with tribal groups, and must stand down in 2013 after 35 years in power.

The report concludes with a grim warning that a failed state in Yemen could threaten stability across the region.

It says it could open the way to piracy, smuggling and a flourishing jihad with implications for the security of shipping routes and the transit of oil through the Suez Canal.

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