Yemen rose to the forefront of U.S. counterterrorism efforts in December 2009, when Umar Farouk Abdulmutallab, who was trained in Yemen by al Qaeda, attempted to bomb an airliner bound for Detroit. Since then, Washington has become concerned about the growing influence of al Qaeda in the Arabian Peninsula and its spokesman, the U.S.-born cleric Anwar al-Awlaki. When two bombs were sent on cargo from Yemen to the United States last month, public attention again focused on U.S. strategies to combat AQAP.

So far, however, these efforts have been complicated by the current state of Yemen itself, which faces a multitude of internal problems that are pushing it to the brink of failure. Interconnected threats from the Houthi rebellion in the north, an increasingly active secessionist movement in the south, and a host of growing socioeconomic problems make Yemen a priority for experts in both counterterrorism and development. Yemen’s potential collapse concerns U.S. officials not just because of al Qaeda but also because such an event could threaten U.S. access to Bab el-Mandab (the narrow strait into the Red Sea through which millions of barrels of oil and countless military vessels pass each day), as well as create the prospect of a vast Yemeni humanitarian crisis that could send millions of refugees into oil-rich Saudi Arabia and beyond.

As months pass with little clear progress, and as anxiety about AQAP grows, Western governments and Yemenis themselves are increasingly asking: Is it too late to save the country? Fortunately, there remains a small but rapidly closing window of opportunity to rescue Yemen and, in the process, address pressing security concerns.

Yemen is the Arabian Peninsula’s poorest state and more closely resembles many sub-Saharan countries than any of its Gulf neighbors. The country faces recurring food security issues, and Sana’a is projected to be the first capital city in the world to run out of water by 2025. Of Yemen’s nearly 24 million citizens, 43 percent live on two dollars a day, while approximately 40 percent are unemployed. Half of adult Yemenis are uneducated. This precarious situation is further exacerbated by the fact that Yemen’s population is expected to double in the next 15 years. This swelling demographic of young, unemployed Yemenis represents a significant socioeconomic concern and a potential target for radicalization and recruitment by terrorist organizations. Moreover, the country’s oil reserves, sales from which account for more than 70 percent of the government’s budget, are expected to run out within ten years. Given Yemen’s undiversified economy, the country will run out of money alongside oil.

What makes this dire situation all the more tragic is that Yemen was lauded as a model emerging democracy only a few years ago. The country’s first competitive presidential race, in 2006, suggested slow but ongoing progress. After Yemeni President Ali Abdullah Saleh’s chief rival received 22 percent of the vote, the National Democratic Institute, a nonprofit organization dedicated to democracy promotion, declared that the election was not a typical Middle Eastern “showpiece.” The group further praised Yemen as a leader in political reform compared with its neighbors and applauded the country for its tolerance of opposition parties, extension of voting rights to women, and attempts to decentralize power. Meanwhile, Yemeni citizens have created a patchwork of political parties, nongovernmental organizations, charities, and social movements. These groups, which numbered almost 7,000 in 2009, advocate for a wide range of issues, including anticorruption programs, election monitoring, and initiatives to empower women and youth. Recently, one organization trained banks to counter money laundering and terrorist financing -- an initiative that U.S. officials consider a key tool for combating terrorism in the region.

Yet since 2007, political reform has effectively stalled. Facing significant security and socioeconomic pressures, the Yemeni government became less concerned with supporting long-term reform initiatives and began instead to focus on short-term efforts to consolidate control. The southern secessionist movement grew increasingly aggressive in its efforts to raise issues of southern political, economic, and social marginalization since unification. In the north, Houthi Shiites had waged an intermittent insurrection against the government since 2004 and again drew Saleh’s attention when a new round of fighting began in January 2007. Al Qaeda also became increasingly active, attacking tourists and Western interests in the country. With threats on all sides, the regime moved to curtail political freedoms and civil liberties and began relying more heavily on tribes and patronage to hold the country together, fueling growing resentment among Yemeni citizens.

However, given past reform efforts and a history of effective consensus building, Yemen’s future is not necessarily destined for failure. To “save” Yemen -- and in the process, help it meet its own security objectives -- Washington must balance near-term counterterrorism efforts with political reform and development initiatives, and make difficult decisions about how to prioritize and sequence response efforts.

Developing a coherent, coordinated, and most important, feasible strategy has been challenging. In the wake of the failed bombing attempt last December, U.S. policymakers publicly pledged to combine security assistance to Yemen with programs to enhance development, humanitarian aid, and economic and political reform. Similarly, the Friends of Yemen, a group of 22 countries formed after the attempted Christmas Day attack to develop a multilateral response to Yemen’s problems, includes committees responsible for assisting Yemen with its economy, governance, and rule of law. Public statements after its most recent meeting in September announced a laundry list of objectives, from reconstruction efforts in the northern region of Sa’dah to establishing yet another donors fund for Yemen.

Yet implementing these reform and development plans has proven difficult, and international efforts to date have largely been fragmented and inconsistent. Many Yemenis contend that efforts have had little impact thus far and doubt the ability of Western donors to help. To achieve measurable success, Washington and the international community must more directly address the Yemeni government’s falling legitimacy at home. The West’s overriding interest in halting terrorism has largely allowed Yemen’s leadership to skirt responsibility for its own failures -- especially with regard to its pervasive corruption. Transparency International recently ranked Yemen 146 out of 178 countries on their 2010 corruption perception index, ahead of only Iraq, Somalia, and Sudan in the region. U.S officials have, for the most part, been willing to overlook such tremendous corruption and related misgovernance as long as Saleh met Washington’s demands for increased pressure on al Qaeda.

Although the U.S. Congress allocated nearly $50 million in development aid to Yemen this year, that amount hardly compares to the $170 million in military and security-related funds that Washington provided the country the same year -- and if a recent request from the Department of Defense is approved, that number may soon rise to as much as $250 million. Washington’s prioritization of counterterrorism ultimately undermines its long-term objectives by convincing Yemenis that the United States is merely interested in propping up a regime that, in the words of Yemen expert April Alley, relies on “co-optation, divide-and-rule tactics, corruption, the distribution of patronage, and the manipulation of weak democratic institutions” to maintain political domination. As a result, many Yemeni citizens distrust both their own government and the U.S. officials supporting it. Many even doubt that AQAP was behind the recent plot to ship explosives to the United States, instead considering it another attempt by the Yemeni government to cement political power and use terrorism to increase international support.

To rebuild trust, the United States must encourage Saleh to advance the political reform agenda that Yemenis began after unification nearly 20 years ago to reconcile formerly separate political systems in the northern Yemen Arab Republic and the southern People’s Democratic Republic of Yemen. Early achievements included the codification of freedom of expression and political association and the approval of a new constitution. The current program -- which includes efforts to reform electoral laws, improve distribution of power, and increase political representation -- has been under discussion between the regime and opposition parties for years and enjoys broad support. But the process has lost momentum due to the scale and complexity of current discussions and diminishing political will. Frustration with the lack of progress has reached a boiling point and threatens to undermine the country’s stability even further, especially in the south, where citizens have been fighting political, economic, and social marginalization since unification.

The United States and the international community must move quickly to place consistent, coordinated pressure on Saleh to advance the reform agenda and should consider making further assistance contingent on progress. It must insist that he fulfill promises to advance a broadly inclusive national dialogue that brings together the opposition party alliance, tribal sheikhs, the southern secessionist movement, and other relevant actors to resolve longstanding electoral and constitutional reform issues. Although Yemenis themselves must define the parameters of expanded political reform initiatives, central elements will likely include redefining the role of central state institutions to give more power to local authorities, increasing transparency and aggressively combating corruption, and reestablishing civil control over the country’s security and military institutions. In order to make concrete progress, the dialogue must advance to actual negotiation and may require a neutral Gulf neighbor to facilitate discussions. Qatar recently mediated talks between the Yemeni government and the Houthis; Oman may be able to play a similar role in conducting a national dialogue and to help hold its participants accountable for taking concrete steps forward. Furthermore, Western nations must train and empower civil society organizations that provide grassroots support for these reform efforts and encourage their more formal role in future discussions. Such assistance may help solidify these groups and provide a homegrown base for long-term development.

A focus on political reform does not imply that security-oriented support, development and humanitarian aid, and economic improvement are unimportant. All are elements of long-term plans for Yemen. Diversifying the country’s economy, addressing its unemployment crisis, and improving its vocational training are critical to its future. Yet Washington and the international community must place greater emphasis on sequencing efforts. Small but concrete progress on even a few political reform initiatives will most significantly address Yemeni concerns for the regime’s illegitimacy, a core problem for all response efforts in Yemen, including attempts to combat AQAP.

Some U.S. leaders are still reluctant to get heavily involved in Yemen -- no doubt reflecting donor weariness toward the country and a reluctance to pour more money into the region. But Yemen is not Afghanistan or Iraq. U.S. support for Yemen will not, and should not, involve military intervention and state building on that scale. But a narrow counterterrorism approach will not defeat al Qaeda there and risks Yemen’s ultimate failure, a long-term strategic liability. Only by teaming counterterrorism with long-term development and more aggressive, near-term political reform can Washington and the international community ensure that Yemen avoids complete collapse and becomes a stable, reliable partner in the fight against al Qaeda in the Arabian Peninsula.

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