Weekly Geopolitical Report – Yemen: A Land with a Rich Past and a Poor Present (March 2, 2015)

by Kaisa Stucke, CFA

The country of Yemen is slowly dissolving in the midst of an ongoing civil war.  The Houthi movement has aggressively secured territories in the north, including taking over the capital city of Sana, while al-Qaeda has widened its activities in the south.

At the end of January, Yemeni President Abd Rabbuh Mansur Hadi and his prime minister, Khaled Baha, were forced to step down after the presidential palace had been under insurgent Shiite Houthi fire for several days.  Since then, the president has tried to resume his duties, but the leader of the Houthis has also claimed the presidency.  Currently, there is no acting president, the parliament has been dissolved and it seems that military loyalties are fractured between tribal leaders.  In this environment, it is unclear who is in control of the country.

Outside powers are watching these developments closely.  Yemen’s wealthy neighbor and U.S. ally, Saudi Arabia, would like to see the Houthi insurgency stopped as the group is widely viewed as a proxy for Iran.  Saudi Arabia does not want to see Iran spread its sphere of influence.

At the same time, the U.S. has been a partner to Yemen in fighting al-Qaeda in the Arabian Peninsula, but the fall of its government has left the U.S. without a formal partner.  A partnership of convenience with the Houthis seems like the most practical approach for the U.S.  However, this approach, in addition to the possibility of a U.S.-Iran nuclear deal, would make the Saudis nervous and unsure about the direction of American foreign policy in the region.

The single, unified country of Yemen is unlikely to survive in the current environment of fragmented political power.  In fact, looking at Yemen’s long-term history, existing as a unified country is an anomaly.  It is likely that the country would return to its natural divided state, becoming a Sunni South Yemen and a Shiite North Yemen.

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