Yemen, the Arab world's poorest country, is struggling with an on-off revolt in the north, a secessionist movement in the south and intensified Al-Qaeda militancy. Oil output is dwindling and water resources are depleting. The global financial crisis has further limited the ability of President Ali Abdullah Saleh's government to cope with high unemployment, runaway population growth and widespread poverty. If Yemen tipped further into instability, this could endanger its neighbors, and complicate efforts to combat Al-Qaeda and protect international shipping routes from piracy in the Gulf of Aden. The United States has reacted to unrest in the south, where several people have been killed in protests in recent weeks, by urging an end to violence it said could sap Yemen's unity. Who rules Yemen? Saleh, 67, took power in the former North Yemen in 1978 and has been president since the merger with the south in 1990, winning another seven-year term in a 2006 election. The former army officer has dominated Yemen's formal democratic structures via his northern tribal power base, patronage networks and support in the armed forces. Parliament voted in February to delay this year's parliamentary election to 2011. Saleh has no obvious successor. His own grip on power is facing multiple challenges in a country awash with weaponry. How big is Al-Qaeda threat? Yemen has suffered a new wave of Al-Qaeda attacks over the past year. Yemen issued a list of 38 wanted militants after an Al-Qaeda suicide bombing killed four South Korean tourists in March. Al-Qaeda's Yemen wing changed its name to Al-Qaeda in the Arabian Peninsula in February. Yemen cooperated with Washington after Sept. 11, 2001 and Al-Qaeda attacks at home, including one on a US warship. Many Yemenis fought US-led forces in Iraq after the 2003 invasion. What lies behind the northern insurgency? Tribesmen led by members of the Houthi family began an intermittent rebellion against the government in the northern Saada region in 2004. The insurgents are Zaidis, an offshoot of Shi'ite Islam, whose Imam ruled Yemen until the 1962 revolution. They have economic and religious grievances, accusing Saleh of favoring Sunnis. The Yemeni government has suggested that Iran supports the rebels. Rebel leader Abdel Malik Al-Houthi signed a Qatari-mediated peace deal in 2007, which broke down. It was revised in August 2008. Tension remains and it is not clear the revolt is over. Why are southerners discontented? The latest violence erupted on April 28 at an opposition rally to mark the 1994 civil war, in which Saleh's forces defeated the secessionist south, known before the 1990 unity deal as the People's Democratic Republic of Yemen. People in the south, home to most of Yemen's oil facilities, have long complained that northerners abused the unity agreement to grab their resources and discriminate against them. Demonstrations over army pensions turned violent in Aden in 2007. Job protests in the south degenerated into riots last year. Some southern leaders have openly called for secession. How is Yemen's economy faring? Oil production, the source of two-thirds of public revenue and 90 percent of export earnings, averaged 300,000 barrels per day last year, down from 410,000 bpd in 2004. Government oil export revenue fell 75 percent in the first three months of 2009 compared to the same 2008 period, the central bank said. Gross Domestic Product grew about 4.4 percent in 2008, up from 4.2 percent in 2007. The World Bank called this disappointing, given high world oil prices in the first nine months. GDP is slated to grow 7.7 percent this year because of the one-off impact of the start of liquefied natural gas (LNG) production. LNG exports are due to begin in August. About 10 percent of GDP is tied up in energy subsidies. Inflation is expected to decline below 10 percent this year after jumping to 19 percent last year from 8 percent in 2007. About 35 percent of Yemen's 23 million people live in poverty. The population is set to double by 2035. The poor were hard hit by a 60 percent spike in world food prices in 2007-8. The global financial crisis could slow inflows of foreign aid, investment and remittances. The World Bank says medium-term prospects beyond 2009 are poor due to declining oil output.
