l District, Sanaa
mailing address: P. O. Box 22347, Sanaa
telephone: [967] (1) 238843 through 238852
FAX: [967] (1) 251563

Flag: three equal horizontal bands of red (top), white, and black;
similar to the flag of Syria which has two green stars and of Iraq
which has three green stars (plus an Arabic inscription) in a
horizontal line centered in the white band; also similar to the flag
of Egypt which has a symbolic eagle centered in the white band

Economy
-------

Economic overview: Whereas the northern city Sanaa is the
political capital of a united Yemen, the southern city Aden, with
its refinery and port facilities, is the economic and commercial
capital. Future economic development depends heavily on
Western-assisted development of the country's moderate oil
resources. Former South Yemen's willingness to merge stemmed partly
from the steady decline in Soviet economic support. The low level of
domestic industry and agriculture has made northern Yemen dependent
on imports for practically all of its essential needs. Once
self-sufficient in food production, northern Yemen has become a
major importer. Land once used for export crops - cotton, fruit, and
vegetables - has been turned over to growing a shrub called qat,
whose leaves are chewed for their stimulant effect by Yemenis and
which has no significant export market. Economic growth in former
South Yemen has been constrained by a lack of incentives, partly
stemming from centralized control over production decisions,
investment allocation, and import choices. Yemen's large trade
deficits have been compensated for by remittances from Yemenis
working abroad and by foreign aid. Since the Gulf crisis,
remittances have dropped substantially. High inflation and political
divisions hinder the development of a forward-looking economic
policy.

GDP: purchasing power parity - $37.1 billion (1995 est.)

GDP real growth rate: 3.6% (1995 est.)

GDP per capita: $2,520 (1995 est.)

GDP composition by sector:
agriculture: 21%
industry: 24%
services: 55%

Inflation rate (consumer prices): 71.3% (1994 est.)

Labor force: no reliable estimates exist, most people are employed
in agriculture and herding or as expatriate laborers; services,
construction, industry, and commerce account for less than one-half
of the labor force

Unemployment rate: 30% (1995 est.)

Budget:
revenues: $1.4 billion