Yemen

Yemen was already the Arab world's poorest nation before civil war began in 2014, and a decade of conflict has created what the UN calls the world's worst humanitarian crisis—with the Houthi-controlled north now projecting military power into global shipping lanes while the population starves.

The territory's economic history reflects geographic constraints. The ancient kingdoms of Yemen—Saba, Qataban, Himyar—prospered from frankincense and myrrh trade before Islam. Coffee cultivation in the highlands gave Yemen global significance as the original source of Coffea arabica. But the port of Mocha lost its monopoly as coffee cultivation spread to Java and the Americas.

Modern Yemen emerged from Ottoman withdrawal after World War I. The British held Aden and its protectorates in the south; the Zaidi imamate controlled the north. Two separate states—the Yemen Arab Republic (north) and People's Democratic Republic of Yemen (south)—unified in 1990. Oil discoveries in the 1980s provided revenue that never adequately developed the country.

Civil war since 2014 has destroyed what economy existed. The Houthi movement, rooted in Zaidi revivalist ideology, seized Sanaa and much of the north. A Saudi-led coalition intervened to restore the internationally recognized government. The conflict has killed over 150,000 people directly and hundreds of thousands more through famine and disease. Over 21 million people—roughly 80% of the population—require humanitarian assistance.

The Houthi transformation from rebel movement to proto-state accelerated after October 2023. Declaring solidarity with Palestinians in Gaza, Houthi forces began attacking commercial shipping in the Red Sea and Gulf of Aden. By 2025, attacks had disrupted one of the world's most important shipping lanes, forcing major carriers to reroute around Africa. The economic impact on global trade far exceeds Yemen's own GDP.

The division persists: Houthis control Sanaa and the highlands; the internationally recognized government controls Aden and the south; various factions contest other territories. Oil exports, once 90% of government revenue, have largely ceased. The currency has collapsed. Food production has failed.

By 2026, Yemen's trajectory depends entirely on whether peace negotiations can succeed and whether the Houthi Red Sea campaign ends or escalates. The population cannot sustain current conditions indefinitely. The international community cannot ignore a chokepoint where 12% of global trade passes. Yet the conflict's parties show little inclination toward the compromises that peace would require. Yemen exists simultaneously as humanitarian catastrophe and geopolitical flashpoint—the two conditions reinforcing each other.