Order Code RL34170
Yemen: Background
and U.S. Relations
Updated June 10, 2008
Jeremy M. Sharp
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division

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Yemen: Background and U.S. Relations
Summary
Yemen, the only republic on the Arabian Peninsula, is the poorest country in
that area. A presidential election deemed relatively fair was held in 2006 with
President Ali Abdullah Saleh winning reelection with 77% of the popular vote.
Nevertheless, democratic institutions remain fragile. This report summarizes
Yemen’s domestic situation, foreign relations, and ties with the United States. It will
be updated as significant developments occur.
U.S.-Yemeni relations have generally been good, though marred occasionally
by differences over Iraq and the Arab-Israeli conflict. U.S. officials have welcomed
Yemen’s support for the war on terrorism since September 11, 2001; however,
because the Yemeni populace is ambivalent about any Western military presence,
the Yemeni government tends to downplay U.S.-Yemeni military and intelligence
ties.
The U.S. government has modestly increased aid for Yemen, which had
virtually ended in the late 1990s. In 2003, the U.S. Agency for International
Development (USAID) reopened its mission in Yemen after a hiatus of seven years.
Over the past several fiscal years, Yemen has received on average between $20 and
$25 million in total U.S. foreign aid. In FY2009, the Administration has requested
$28.2 million in assistance for Yemen, an increase from its $20.7 million aid package
in FY2008.

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Contents
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Domestic Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Terrorism and Al Qaeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The USS Cole Bombing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
U.S.-Yemeni Intelligence Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . 4
Al Qaeda’s Resurgence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Al Houthi Revolt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Unrest in the South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Extreme Poverty and Water Scarcity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Foreign Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Somalia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Gulf Neighbors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Arab-Israeli Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
U.S. Relations and Foreign Aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Millennium Challenge Corporation (MCC) Aid? . . . . . . . . . . . . . . . . 12
U.S. Bilateral Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
List of Figures
Figure 1 Map of Yemen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
List of Tables
Table 1. U.S. Foreign Aid to Yemen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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Yemen: Background and U.S. Relations
Overview
The Republic of Yemen was formed by the merger of the formerly separate
states of North Yemen and South Yemen in 1990. In 1994, government forces loyal
to President Ali Abdullah Saleh put down an attempt by southern-based dissidents
to secede from the newly unified state, but some southerners still resent what they
perceive as continued northern domination of the political scene. In addition to north-
south cleavages based on religious sectarian differences, political rivalries, and
disputes over sharing of oil revenue, Yemen faces complex regional issues that have
created additional divisions within the population and further complicate efforts by
the government to build a unified, modern state.
President Saleh, a former military officer, has governed Yemen since the unified
state came into being in 1990; prior to this, he had headed the former state of North
Yemen from 1978 to 1990. In Yemen’s first popular presidential election, held in
1999, President Saleh won 96.3% of the vote amidst cries of ballot tampering. In
2006, Saleh stood for reelection and received 77% of the vote. His main opponent,
Faisal Bin Shamlan, a 72-year-old former oil executive and government minister, ran
an effective campaign but was outspent by Saleh and the ruling party.1 Bin Shamlan
was supported by an opposition coalition composed of Islamists, Communists, and
powerful tribes.
Throughout his decades of rule, President Saleh has balanced various political
forces — tribes, political parties, military officials, and radical Islamists — to create
a stable ruling coalition that has kept his regime intact. However in recent years, a
series of events, including increased Al Qaeda attacks, an insurgency in the north,
and civil unrest in the south, have led many experts to conclude that Yemen may be
on the verge of collapse, particularly given its already precarious economic condition.
Others assert that Yemen’s collapse will be gradual. According to a recent report in
Oxford Analytica:
“Within Yemen there is a perceptible weakening of government, growing discontent and
a sense of state incompetence. However, the security core of the regime remains resilient,
and Yemen is unlikely to implode in the short or medium term. There will be instead a
process of state deterioration as Yemen gradually becomes less governable and less stable.
1 Shamlan’s campaign slogan was, “A President for Yemen, not Yemen for a President.”

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This will manifest itself in more demonstrations, local rebellions, growing competition for
access to water and other resources, tribal unrest and terrorism.”2
Domestic Challenges
Terrorism and Al Qaeda
Yemen is an undeveloped country where, outside of the capital of Sana’a, tribal
leaders often exert more control than central government authorities. It has long been
the scene of random violence and kidnaping; it is rumored that there are an estimated
60 million firearms among a population of less than 20 million. Kidnapings of
Yemeni officials and foreign tourists have been carried out mainly by dissatisfied
tribal groups pressing the government for financial largesse or for infrastructure
projects in their districts.
The prevailing climate of lawlessness in much of Yemen has provided
opportunities for terrorist groups to maintain a presence in outlying areas of the
country. Many experts believe that, since the 1980s, Yemeni President Ali Abdullah
Saleh has tolerated the presence of radical Islamists in the country and has used their
presence to bolster his credibility among Islamist hardliners.3 As the ancestral home
of Al Qaeda leader Osama bin Laden, Yemen provided, and then welcomed home,
thousands of so-called “Arab Afghan” volunteers who fought alongside the
mujahidin (Islamic fighters) against the Soviet occupation of Afghanistan in the
1980s. During the 1994 civil war, President Saleh dispatched several brigades of
“Arab Afghans” to fight against southern late secessionists. In the mid to 1990s,
Yemeni (and many foreign) militants, many with ties to Al Qaeda, began striking
targets inside the country. One group, known as the Aden-Abyan Islamic Army,
which was formed by a former Bin Laden associate, was responsible for the
December 1998 kidnaping of 16 foreign tourists (4 of whom died in a botched rescue
attempt) and the 2002 attack on a French oil tanker (Limburg) near the southern
Yemeni port of Mukalla.
2 “Yemen: State is Deteriorating and Could Fail,” Oxford Analytica, May 1 2008.
3 “Yemen’s Deals With Jihadists Unsettle the U.S.,” New York Times, January 28, 2008.

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Figure 1. Map of Yemen
Source: Map Resources. Adapted by CRS (9/2007).
The USS Cole Bombing. On October 12, 2000, an explosives-laden
motorboat detonated alongside the U.S. Naval destroyer USS Cole while it was
docked in the Yemeni port of Aden, killing 17 U.S. servicemen and wounding 39
others. Nearly 8 years after the attack, many details on the attack remain a mystery.
In 2000, agents from the Federal Bureau of Investigation (FBI) uncovered some of
the perpetrators of the terrorist bombing. One suspect, Abd al Rahim al Nashiri, a
Saudi national of Yemeni descent who served as Al Qaeda’s operations chief in the
Arabian Peninsula, was captured in the United Arab Emirates in November 2002 and
handed over to the Central Intelligence Agency. According to the Washington Post,
Al Nashiri had spent several months before his capture under high-level protection
from the Yemeni government.4 Another Al Qaeda member, Walid bin Attash (also
referred to as Tawfiq bin Attash), has been named by the U.S. Department of Justice
as an unindicted co-conspirator in the Cole attack. Both Al Nashiri and Attash have
appeared before military tribunals in Guantanamo Bay, Cuba where they have been
held for several years under U.S. military custody. At this time, it is unclear whether
they will be tried in a U.S. military or civilian court.
A third organizer of the Cole bombing, Jamal al Badawi, has been, to the
frustration of U.S. officials, held under Yemeni custody despite two previous
successful escapes (April 2003 and 2006) from his captors. After his second escape
in 2006 (along with 22 other Al Qaeda convicts), in what many believe was an
officially sanctioned prison break, Badawi turned himself in a year later, pledged his
allegiance to President Saleh, and promised to cooperate with the authorities and help
4 “Probe of USS Cole Bombing Unravels: Plotters Freed in Yemen; U.S. Efforts Frustrated,”
Washington Post, May 4, 2008.

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locate other militants. In October 2007, soon after his return to custody, the Yemeni
government reportedly released Badawi from house arrest despite vocal protestations
from the Bush Administration. Yemen has refused to extradite Badawi to the United
States, where he has been indicted in the U.S. District Court in New York on murder
charges.5 According to one former FBI official, Badawi was “the guy who recruited
the bombers.... He was the local mastermind.”6 At this time, it is unclear if Badawi
is still incarcerated. According to U.S. State Department Spokesman Sean
McCormack, “This was someone who was implicated in the Cole bombing and
someone who can't be running free.” Yemeni officials claim, however, that Badawi
is now cooperating with the government in attempts to capture a new generation of
more lethal jihadists. According to Rashad Muhammad alAlimi, Yemen’s Interior
Minister, “The strategy is fighting terrorism, but we need space to use our own
tactics, and our friends must understand us.”
U.S.-Yemeni Intelligence Cooperation. In the immediate aftermath of the
Cole bombing, U.S. officials complained that Yemeni authorities were not
cooperative in the investigation. After the terrorist attacks of September 11, 2001, the
Yemeni government became more forthcoming in its cooperation with the U.S.
campaign to suppress Al Qaeda.7 President Saleh reportedly has allowed small
groups of U.S. Special Forces troops and CIA agents to assist in identifying and
rooting out Al Qaeda cadres hiding in Yemen, despite sympathy for Al Qaeda among
many Yemenis. According to press articles quoting U.S. and Yemeni officials, the
Yemeni government allowed U.S. personnel to launch a missile strike from an
unmanned aircraft against an automobile in eastern Yemen in November 2002,
killing six alleged terrorists, including Qaid Salim Sinan al Harithi, the leader of Al
Qaeda in Yemen and a key planner of the attack on the USS Cole.8 (Yemen then
arrested al Harithi’s replacement, Muhammad Hamdi al Ahdal, a year later.) The
United States also has helped Yemen build and equip a modern coast guard used to
patrol the strategic Bab al Mandab strait where the Red Sea meets the Gulf of Aden
and the Indian Ocean.9 Finally, the United States has provided technical assistance,
5 A Yemeni court condemned Badawi to death in 2004, although his sentence was commuted
on appeal to 15 years in prison.
6 “A Terrorist Walks Free,” Newsweek, October 27, 2007.
7 Some observers consider Yemen’s counter-terrorism policies to be unorthodox. In 2002,
the government sanctioned the creation of a committee of moderate religious leaders to
engage in a dialogue (called “al hiwar al fikri” in Arabic, translated as “intellectual
dialogue”) with Al Qaeda-inspired militants in order to dissuade them from engaging in
terrorist acts. Other governments, including the neighboring Saudis have since adopted
similar dialogue based tactics. In addition, Yemeni authorities have released militants from
prison on the condition that they refrain from plotting attacks in Yemen and elsewhere. One
foreign observer described the government’s tactics as “an imperfect system of parole and
control.” See, “Yemen Employs New Terror Approach,” Associated Press, July 4, 2007.
8 Before Al Harithi was killed by a U.S. unmanned aircraft, Yemeni forces had failed in their
attempt to capture him. Soldiers who were sent to detain him were themselves captured by
local tribesman protecting Al Harithi.
9 According to the U.S. Energy Information Administration (EIA), the Bab al Mandab strait
is one of the most strategic shipping lanes in the world, with an estimated 3 million barrels
(continued...)

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equipment, and training to the Anti-Terrorism Unit [ATU] of the Yemeni Central
Security forces and other Yemeni Interior Ministry departments.
Despite recent U.S.-Yemeni security cooperation, many U.S. officials view
Yemen’s counterterrorism policies as inadequate. According to the U.S. State
Department’s 2007 Country Reports on Terrorism, “Despite Yemen’s history of
terrorist activity and repeated offers of assistance from the U.S. government, Yemen
lacked a comprehensive counterterrorism law. Current law as applied to
counterterrorism was weak.”10
In the spring of 2008, FBI Director Robert Mueller traveled to Yemen in order
to discuss counter-terrorism issues with President Saleh, including an update on the
status of Jamal al Badawi and other known Al Qaeda operatives. According to a
Newsweek report, “The meeting between Mueller and Yemeni President Ali
Abdullah Saleh did not go well, according to two sources who were briefed on the
session but asked not to be identified discussing it. Saleh gave no clear answers about
the suspect, Jamal al Badawi, leaving Mueller “angry and very frustrated,” said one
source, who added that he’s "rarely seen the normally taciturn FBI director so
upset.”11
Al Qaeda’s Resurgence. Many experts agree that between 2002 and 2004,
the Yemeni government, with the assistance of the United States, was able to
severely disrupt Al Qaeda-inspired terrorist activity in Yemen. However, in recent
years, analysts observe that a new generation of militants has emerged. Many of these
Islamist militants either fought coalition forces in Iraq or were radicalized in the
Yemeni prison system. Moreover, unlike their predecessors, this new generation of
Al Qaeda-inspired extremists may be more inclined to target the Yemeni government
itself, in addition to foreign and Western interests in Yemen. According to one
analyst:
“The older generation, while passionate about global jihad, was more concerned with
local matters, and more willing to play by the time-honored Yemeni rules of bargaining
and negotiating in order to keep Saleh from destroying their safe haven. Not so with the
new generation—they willingly criticize Saleh harshly, and seem immune to the lure of
the negotiation room.”12
One group calling itself Al Qaeda in Yemen has issued several statements
demanding that President Saleh, among other things, release militants from prison,
9 (...continued)
per day of oil flow.
10 U.S. State Department, Country Reports on Terrorism 2007, Chapter 2 -- Country Reports:
Middle East and North Africa Overview, Released by the Office of the Coordinator for
Counterterrorism, April 30, 2008.
11 “A Tense Impasse In Yemen,” Newsweek, May 5, 2008.
12 Brian O' Neill, “New Generation of al-Qaeda on Trial in Yemen,” Terrorism Focus,
Volume 4, Issue 39, published by the Jamestown Foundation, November 27, 2007.

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end his cooperation with the United States, renounce democracy and fully implement
Islamic law, and permit Yemeni militants to travel to Iraq to carry out jihad. The
group’s leaders were part of the infamous 2006 jailbreak, in which 23 convicted
terrorists escaped from a prison in the capital of Sana’a. Over the past two years, Al
Qaeda in Yemen has claimed responsibility for several attacks, including:
! On April 10, 2008, an explosion occurred at the headquarters of the
Canadian oil company Nexum Petroleum. On April 6, 2008, three
explosive rounds struck a housing complex used by foreigners,
including American personnel, in an upscale neighborhood of
Sana’a. No injuries were reported, but two days later, the U.S.
Embassy announced that it was evacuating all non-essential
personnel from the country. On March 18, 2008, a group calling
itself the Yemen Soldiers Brigades, an affiliate of Al Qaeda in
Yemen, fired a mortar aimed at the U.S. Embassy in Sana’a. The
mortar missed its target and fell on a school near the embassy
wounding 13 Yemeni schoolgirls and five Yemeni soldiers.
! On January 18, 2008, Al Qaeda gunmen opened fire on a tourist
convoy, killing two Belgian women and two Yemeni drivers.
Reportedly, Yemen’s tourist industry has suffered from the recent
string of terrorist attacks.
! On July 2, 2007 - A suicide bomber attacked a convoy of Spanish
tourists, killing eight Spaniards and two Yemenis. The suicide
attack was carried out using a car bomb that exploded in a tourist
area near the ancient Yemeni temple of Balqis approximately 100
miles east of Sana’a. Two weeks prior to the attack, the U.S.
Embassy in Sana’a had issued a warning to Americans traveling in
Yemen to avoid visiting the site. Days after the bombing, Yemeni
government officials admitted that they themselves had been warned
about a possible Al Qaeda attack, but had not considered the temple
site as a possible target. Subsequent investigations carried out by the
Yemeni security forces concluded that the perpetrators were part of
a 10-person cell comprised mostly of Yemenis recruited by hardened
militants.
! On March 29, 2007, Al Qaeda in Yemen assassinated the chief
criminal investigator in Marib province, a man who they believe was
involved in the November 2002 U.S. air strike that killed the
group’s former leader.
! On September 15, 2006, only days before Yemen’s presidential
election, Yemeni security forces foiled two near simultaneous Al
Qaeda suicide attacks on oil facilities in the northeastern region of
Maarib and on the Gulf of Aden coast at Dhabba.13 Al Qaeda
13 This attack followed a general call by Ayman al Zawahiri, Al Qaeda's second-in-
(continued...)

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fugitives, who months earlier had escaped from prison, were
involved in the planning of the failed attack, which, had it
succeeded, would have crippled Yemen’s oil industry.
According to a number of sources, the new leader of Al Qaeda in Yemen is a
32-year-old former secretary of Osama bin Laden named Nasir al Wahayshi. Like
other well-know operatives, Al Wahayshi (alt. sp. Wuhayshi) was a member of the
23-person contingent who escaped from a Yemeni prison in 2006. Al
Wahayshi’spersonal connection to Bin Laden has reportedly enhanced his legitimacy
among his followers.14 After the fall of the Taliban in Afghanistan in 2001, he
escaped through Iran, but was arrested there and held for two years until he was
deported to Yemen in 2003.
The Al Houthi Revolt
Over the past several years, a group of Zaydi15 Shiites in the remote northern
Yemeni province of Sa’ada have waged a guerrilla war against the Yemeni
government. The revolt has been spearheaded by members of the Al Houthi family,
a prominent Zaydi religious clan who claim descent from the prophet Muhammad
through his daughter Fatima and her husband, Ali. Shaykh Hussein Badr ad din al
Houthi, who was killed by Yemeni troops in 2004, formed the Organization for
Youthful Believers as a revivalist Zaydi group for Al Houthi followers who dispute
the legitimacy of the Yemeni government and are firmly opposed to the rule of
President Saleh, a Zaydi himself, though with no formal religious training or title.16
Abdul Malik al Houthi, the new leader of the group, has said the Yemeni government
is “an ally of Americans and Jews,”and there have been reports of threats against the
small community of Yemeni Jews in northern areas with an Al Houthi presence.17
The Yemeni government claims that Al Houthi rebels seek to establish a Zaydi
theocratic state in Saada with Iranian assistance, though some analysts dispute Iranian
involvement in northern Yemen, asserting that the Yemeni authorities are using the
13 (...continued)
command, for Islamist militants to attack oil facilities in the Middle East.
14 Gregory D. Johnsen, “Al-Qaeda in Yemen Reorganizes under Nasir al-Wahayshi,”
Terrorism Focus, Volume 5, Issue 11, published by the Jamestown Foundation, March 18,
2008.
15 The population of Yemen is almost entirely Muslim, divided between Zaydis, found in
much of the north (and a majority in the northwest), and Shafi’is, found mainly in the south
and east. Zaydis belong to a branch of Shi’ite Islam, while Shafi’is follow one of several
Sunni Muslim legal schools. Yemen's Zaydis take their name from their fifth Imam, Zayd
ibn Ali. They are doctrinally distinct from the Twelvers, the dominant branch of Shi’ite
Islam in Iran and Lebanon. Twelver Shiites believe that the 12th Imam, Muhammad
alMahdi, has been hidden by Allah and will reappear on Earth as the savior of mankind.
16 “Yemeni Jews Face Growing Sectarian Troubles,” Christian Science Monitor, April 4,
2007.
17 In April 2007, the Yemeni government moved 45 Yemeni Jews to Sana’a after they were
threatened by Al Houthi rebels.

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specter of Iranian interference to justify large-scale military operations against the
insurgents and calls for assistance from neighboring Gulf states.
Over the past two years, fighting between government security forces and Al
Houthi rebels has been intermittent. Several cease-fire agreements mediated by
Qatari negotiators have temporarily halted the violence, though neither side seems
prepared to reach a final settlement. The rebels have been unwilling to fully disarm,
while the government is unwilling to release additional Al Houthi prisoners for fear
that they will resume their attacks.
In April and May 2008, the conflict resumed in full force after gunmen, who
may have been Al Houthi rebels, ambushed and killed a Yemeni lawmaker and his
son. A month later, after several more clashes, a bomb-rigged motorcycle exploded
in a mosque in Sa’ada, killing over a dozen people. Several weeks later, a lone
gunman opened fire in a mosque in the town of Kohal in Amran Province, killing
eight people.
Unrest in the South
For years, southern Yemenis have been disaffected by their perceived second-
class status in a unified state from which many of their leaders tried to secede in
1994. Unemployment in the areas which comprised the former socialist state of the
People's Democratic Republic of Yemen (PDRY) is reportedly high. Many
southerners have felt cut off from government services and jobs. In March and April
2008, tens of thousands of protesters, many of whom were angry over inflation and
their exclusion from employment in the army, set fire to police stations and army
property in the southern town of Dhalae and elsewhere. Some of the protestors were
themselves former members of the defeated southern army in Yemen’s 1994 civil
war. In response, the government deployed only northern soldiers to southern areas.
Several hundred protestors were reportedly detained.
Extreme Poverty and Water Scarcity
With limited natural resources, a crippling illiteracy rate, and high population
growth, Yemen faces an array of daunting development challenges that some
observers believe make it at risk for becoming a failed state in the next few decades.
Currently, it ranks 153 out of 177 countries on the United Nations Development
Programme’s Human Development Index, a score comparable to the poorest sub-
Saharan African countries. Over 43% of the population lives below the poverty line,
and per capita GDP is estimated to be between $650 and $800. Yemen is largely
dependent on external aid from Persian Gulf countries, Western donors, and
international financial institutions, though its per capita share of assistance is below
the global average. Some of the statistics on social and economic conditions in
Yemen are startling, including:
! High Population Growth — Yemen has one of the highest
population growth rates in the world, currently at 3.2 percent per
year. Its current population stands at 22 million and is expected to
reach 40 million by 2030. In addition, 45% of all Yemeni citizens

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are under the age of 15. Moreover, 70% of Yemenis live in rural
areas, making the delivery of public services difficult.
! Illiteracy and Education — Yemen’s national literacy rate is
45.3%, but just 33% for females. According to the Ministry of
Planning and International Cooperation, between 33% and 40% of
Yemeni children do not attend primary school, and over ten
thousand new schools will be needed in the upcoming years just to
keep up with population growth.18
! Severe Water Shortage — Yemen has one of the greatest water
shortages worldwide. Water scarcity is becoming a serious concern,
as water demand has forced Yemen to dig deeper wells and deplete
its ground water reserves at alarming rates. Currently, Yemen is
experiencing a severe drought. Agriculture, the economy’s largest
employer, is largely inefficient with up to 45% of the water used in
growing food wasted. The cultivation of qat, a natural stimulant
grown in the Horn of Africa and chewed by over 70% of the
Yemen’s population, is rapidly depleting water resources. With the
prohibitive cost of desalination for a country in Yemen’s income
bracket, its only option for water preservation may be to increase
efficiency. It is estimated that Yemen has enough rainfall for only
about 2 million people.
! Dwindling Oil Production — Oil production accounts for over
70% of government revenues; however, oil reserves are declining
and may be depleted entirely in the next decade, barring the
discovery of new fields.19 The export of liquid natural gas (LNG)
may be a promising source of income in the future, though Yemen
has had difficulty in securing long-term foreign investment for LNG
projects.20
! Status of Women — According to a recent report in The Observer,
a Yemeni woman has a one-in-39 chance of dying in pregnancy or
childbirth over her lifetime, one of the highest rates in the world. In
addition, early marriage is prevalent in Yemen, a practice that has a
serious impact on young women’s health and quality of life.21
18 CRS interview with Yemeni government officials, September 18, 2006.
19 Yemen’s proven oil reserves are less than 4 billion barrels, though the government is
confident that with additional foreign investment new fields will be discovered. Current oil
production is estimated at between 300,000 and 330,000 barrels a day.
20 U.S.-based Hunt Oil has been a major investor in Yemen’s energy industry since 1981.
21 “Woman: Is this the Worst Place on Earth to Be a Woman?,” The Observer, May 11,
2008.

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Foreign Relations
Somalia. Some analysts fear that the preponderance of arms in Yemen make
it a natural supplier for Islamist militias in Somalia and terrorist groups like Al Qaeda
which may be operating there. In October 2006, Yemeni security officials arrested
eight men in an alleged plot linked to Al Qaeda to smuggle weapons from Yemen
to Somalia. Continued violence in Somalia has led thousands of Somalis to migrate
over treacherous waters to Yemen. There may be hundreds of thousands of Somali
migrants in Yemen, and there are regular news reports of migrants drowning in the
Red Sea in their attempt to reach Yemen. According to the United Nations High
Commissioner for Refugees (UNHCR), 367 Ethiopian and Somali migrants were
killed in the first half of 2007 trying to reach Yemen.
Iraq. Yemen has generally opposed U.S. military action against Iraq, both at
the governmental and popular levels. In 1990, as a member of the U.N. Security
Council, Yemen voted against the U.N. resolution that authorized military action to
expel Iraqi forces from Kuwait. This decision ended up crippling Yemen’s economy
for years, as its neighbors banned Yemeni laborers, a key source of remittances, from
working in many parts of the Gulf. The United States also suspended its bilateral aid
program in Yemen. The Yemeni government did not favor the U.S.-led campaign to
overthrow the Saddam Hussein regime in 2003, and press reports indicate that some
Yemeni volunteers went to Iraq to fight against U.S.-led allied forces. Since the U.S.
invasion, Yemen has offered to host several reconciliation conferences in order to
halt the spread of sectarian violence there.
Gulf Neighbors. Yemen has largely repaired relations with Saudi Arabia and
the five smaller Arab Gulf states, which had been alienated by Yemen’s refusal to
support the allied campaign to expel Iraqi forces from Kuwait in 1990-1991. Some
border problems persist, however, as Saudi officials complain that smugglers from
Yemen have brought in explosives and weapons which militants have used in
terrorist attacks in Saudi Arabia. Another sensitive issue is Yemen’s desire to join the
23-year-old Gulf Cooperation Council (GCC), a sub-regional organization which
groups Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, and Oman
in an economic and security alliance. GCC members have traditionally opposed
accession of additional states. Currently, Yemen has some partial observer status on
some GCC committees, and observers believe that full membership is a long way off.
Others assert that it is in the GCC’s interest to assist Yemen and prevent it from
becoming a failed state, lest its instability spread to neighboring Gulf countries. In
November 2006, an international donors’ conference was convened in London to
raise funds for Yemen's development. Yemen received pledges totaling $4.7 billion,
to be disbursed over four years (2007-2010) and represent over 85% of the
government's estimated external financing needs. Much of these pledges will come
from Yemen’s wealthy Arab neighbors.
Arab-Israeli Conflict. Yemen has usually followed mainstream Arab
positions on Arab-Israel issues, and its geographic distance from the conflict and lack
of political clout make it a minor player in the peace process. Yemen has not
established any bilateral mechanism for diplomatic or commercial contacts with
Israel. The Yemeni Jewish community (300 members) continues to dwindle, as many

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of its members emigrated to Israel decades ago. Yemen supports the Arab Peace
Initiative, which calls for Israel's full withdrawal from all occupied territories and the
establishment of a Palestinian state in the West Bank and Gaza Strip in exchange for
full normalization of relations with all Arab states in the region.
In the spring of 2008, President Saleh attempted to broker a reconciliation
agreement between the competing Palestinian factions Hamas and Fatah. During a
March meeting in Sana’a, Palestinian representatives from both groups signed a
declaration (the Sana’a Declaration) calling for the creation of a national unity
government, but the talks fell apart over the issue of Hamas’s role in a unified
Palestinian Authority.
U.S. Relations and Foreign Aid
U.S.-Yemeni relations have generally been good, though marred occasionally
by differences over Iraq and the Arab-Israeli conflict. U.S. officials have welcomed
Yemen’s support for the war on terrorism since September 11, 2001; however,
because of the Yemenis’ ambivalent attitudes toward any Western military presence,
the Yemeni government tends to downplay U.S.-Yemeni military and intelligence
ties. Nevertheless, the U.S. government has modestly increased its aid programs for
Yemen, which had virtually ended in the late 1990s. In 2003, the U.S. Agency for
International Development (USAID) reopened its mission in Yemen after a hiatus of
seven years. In April 2007, President Saleh met with President Bush and some
Members of Congress in Washington, D.C. After their meeting, President Bush
stated that “We spent a lot of time talking about our mutual desire to bring radicals
and murderers to justice.... And I thanked the president for his strong support in this
war against extremists and terrorists.”22
Some critics charge that the current U.S. approach to Yemen is compromising
U.S. national security. Yemen continues to harbor a number of Al Qaeda operatives
and has refused to extradite several known militants on the FBI’s list of most wanted
terrorists. According to a recent report in the Washington Post, three known Al
Qaeda operatives (Jamal al Badawi, Fahd al Quso, and Jaber A. Elbaneh,), sought
under the FBI’s Rewards for Justice program, are in Yemen.23 Before his recent
incarceration, Elbaneh was roaming freely on the streets of Sana’a despite his
conviction for his involvement in the 2002 attack French tanker Limburg and other
attacks against Yemeni oil installations. In 2003, U.S. prosecutors charged Elbaneh
in absentia with conspiring to provide material support to a foreign terrorist
organization. One expert, Ali H. Soufan, a former FBI supervisory special agent,
argues that “If Yemen is truly an ally, it should act as an ally. Until it does, U.S. aid
to Yemen should be reevaluated. It will be impossible to defeat Al Qaeda if our
22 “President Bush Welcomes President Ali Abdullah Saleh of Yemen to the White House,”
Office of the Press Secretary, May 2, 2007.
23 “Bounties a Bust in Hunt for Al-Qaeda,” Washington Post, May 17, 2008.

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"allies" are freeing the convicted murderers of U.S. citizens and terrorist masterminds
while receiving direct U.S. financial aid.”24
Millennium Challenge Corporation (MCC) Aid? Some analysts question
whether the Yemeni government will derive any tangible benefits from its
cooperation with the United States. In November 2005, the Millennium Challenge
Corporation (MCC) suspended Yemen’s eligibility for assistance under its threshold
Program, concluding that after Yemen was named as a potential aid candidate in
FY2004, corruption in the country had increased. Yemen became eligible to reapply
in November 2006 and had its eligibility reinstated in February 2007, nearly six
months after it held what some observers described as a relatively successful
presidential election.
Yemen’s threshold program was approved on September 12, 2007. However,
after reports of Jamal al Badawi’s release from prison surfaced a month later, the
MCC canceled a ceremony to inaugurate the $20.6 million threshold grant, stating
that the agency is “reviewing its relationship with Yemen.” Since then, there have
been no new reports on the status of MCC assistance to Yemen.
U.S. Bilateral Assistance. Over the past several fiscal years, Yemen has
received on average between $20 and $25 million in total U.S. foreign aid. For
FY2009, the Administration has requested $28.2 million in assistance for Yemen, an
increase from its $20.7 million aid package in FY2008. Between FY2006 and
FY2007, Yemen also has received approximately $31.5 million from the U.S.
Department of Defense’s Section 1206 account. Section 1206 Authority is a
Department of Defense account designed to provide equipment, supplies, or training
to foreign national military forces engaged in counter-terrorist operations.
24 “Coddling Terrorists In Yemen,” Washington Post, May 17, 2008.

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Table 1. U.S. Foreign Aid to Yemen
(current year $ in millions)
Aid Account
FY2006
FY2007
FY2008
FY2009
Request
Economic Support Fund
7.920
12.000
2.777
—
(ESF)
Foreign Military Financing
8.415
8.500
4.676
3.000
(FMF)
Development Assistance
— —
7.796
21.000
(DA)
Non-Proliferation, Anti-
1.441
3.751
4.034
2.525
Terrorism, De-mining, and
Related Programs (NADR)
International Military
.924
1.085
.952
1.000
Education and Training
(IMET)
Totals
18.700
25.336
20.325
27.525

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