ver resources slipping as separatist regional
movements - typically based on ethnicity - gain momentum, e.g., in
many of the successor states of the former Soviet Union, in the
former Yugoslavia, in India, in Iraq, in Indonesia, and in Canada.
Externally, the central government is losing decision-making powers
to international bodies. In Western Europe, governments face the
difficult political problem of channeling resources away from
welfare programs in order to increase investment and strengthen
incentives to seek employment. The addition of 80 million people
each year to an already overcrowded globe is exacerbating the
problems of pollution, desertification, underemployment, epidemics,
and famine. Because of their own internal problems and priorities,
the industrialized countries devote insufficient resources to deal
effectively with the poorer areas of the world, which, at least from
the economic point of view, are becoming further marginalized. The
introduction of the euro as the common currency of much of Western
Europe in January 1999, while paving the way for an integrated
economic powerhouse, poses economic risks because of varying levels
of income and cultural and political differences among the
participating nations. The terrorist attacks on the US on 11
September 2001 accentuate a further growing risk to global
prosperity, illustrated, for example, by the reallocation of
resources away from investment to anti-terrorist programs. The
opening of war in March 2003 between a US-led coalition and Iraq
added new uncertainties to global economic prospects. After the
coalition victory, the complex political difficulties and the high
economic cost of establishing domestic order in Iraq became major
global problems that continue into 2004.

Yemen
Yemen, one of the poorest countries in the Arab world,
reported strong growth in the mid-1990s with the onset of oil
production. It has been harmed by periodic declines in oil prices,
but now benefits from current high prices. Yemen has embarked on an
IMF-supported structural adjustment program designed to modernize
and streamline the economy, which has led to substantial foreign
debt relief and restructuring. International donors, meeting in
Paris in October 2002, agreed on a further $2.3 billion economic
support package. Yemen has worked to maintain tight control over
spending and to implement addit