The Well Runs Dry

Yemen has long been a basket case. But with oil revenues and water resources fast evaporating and al Qaeda on the loose, Arabia's southern outpost could be headed for total collapse.

Yemen is invariably referred to as the land of faith and wisdom in jihadi journals and videos, echoing a famous saying of the prophet Mohammed. But what was true 1,400 years ago rings more than a little hollow today. Few in the West have much faith in the continued stability of the Yemeni state or see wisdom in investing in an opaque economy plagued by rampant and systematic corruption. These concerns, combined with the rapid depletion of Yemen's water table and its oil reserves, are causing the state's already limited power to recede further back into major urban areas.

Meanwhile, the rural and tribal areas of the country, many of which have long been beyond the full reach of the government, are gaining increasing autonomy -- opening up space for al Qaeda to regroup and use the country's undergoverned regions as a staging area for attacks throughout the Arabian Peninsula and the Horn of Africa. It's not hard to imagine Yemen ultimately looking a lot more like chaotic Somalia, its neighbor across the Gulf of Aden.

The security situation in Yemen is steadily worsening. In February 2006, 23 al Qaeda prisoners tunneled out of a political security prison and into a neighboring mosque, where they walked out the front door to freedom. Among the escapees was Nasir al-Wahayshi, a former secretary to Osama bin Laden who fought in the battle at Tora Bora before escaping to Iran, where he was eventually arrested and extradited to Yemen.

At the time of the prison break, al Qaeda's Yemen branch had been largely eliminated. But the past three years of violence have underscored the dangers of lapsed vigilance, illustrating what can happen when highly experienced and motivated fighters return to the battlefield. This is surely a concern for U.S. officials as they debate what to do with the 99 Yemenis being held at Guantnamo Bay. Although some appear to be innocent, separating them from the guilty has proven to be an overwhelming task for U.S. investigators.

Wahayshi, along with fellow escapee Qasim al-Raymi, have spent the years since their escape rebuilding and restructuring an al Qaeda network in Yemen that is designed to survive the loss of key commanders. Once a durable infrastructure was established, their ambitions grew and they looked to expand and upgrade their local al Qaeda chapter into a regional franchise. This took place in mid-January, when the Saudi and Yemeni branches of al Qaeda combined forces under Wahayshi's command. But as dangerous as al Qaeda is, in the Yemeni government's calculations it does not represent an existential threat to the survival of the regime in the same way as the religious revolt in the north and talk of secession in the south do.

The northern revolt began in June 2004, when the Yemeni government overreached and tried to arrest a former member of parliament, following years of confrontations and government support for transplanted Wahhabi extremists against a local community of Shiites known as Zaydis. The fighting has been centered in the mountainous northern governorate of Sadah, and the Zaydis' Shiite identity has led to claims that Iran is meddling on Saudi Arabia's southern border, drawing the attention of Saudi and U.S. security officials. But despite Yemeni allegations to that effect, no firm evidence has come out. The war is on hold, following a secret deal between the president and the rebel leader, which is likely to last only until parliamentary elections are held later this year.

Nationwide elections were originally scheduled for April, but threats of a boycott and backroom negotiations could postpone them six months. Further complicating matters are muttered threats of secession and popular protests organized by some in the Yemeni Socialist Party. Despite the party's relatively weak power base, the government takes these threats seriously. It recently put 160 Islamist militants in the southern governorate of Abyan on its payroll, which many southerners see as a replay of the early 1990s, when scores of socialist leaders were assassinated in the buildup to the 1994 civil war.

As if these political and security problems were not enough, Yemen's chronic economic, demographic, natural resource, and human development challenges are only growing worse with each passing year. Most critically, the state's oil reserves are almost tapped out. Yemen is a very modest oil producer, yet it generates approximately 80 percent of its income from oil exports. As of 2003, the country was exporting more than 450,000 barrels per day, but Minister of Oil Amir Salem al-Aidroos warns that exports had fallen to roughly 280,000 barrels per day by January 2009. Barring any major discoveries (and none are expected), Yemen will likely run out of exportable oil within the next decade.

This is not merely an economic issue. The Yemeni government relies on the hard currency generated by oil exports to fund the state and lubricate the extensive patronage systems that tie the country together. For the past several years, record global crude prices had masked the reality of Yemen's declining export capacity, allowing the government to ignore the impending reckoning. The country now exports fewer barrels of oil per day and earns significantly less income per barrel -- almost $100 less than it did only six months ago. The resulting nose dive in government revenues has forced several budget revisions and led the Ministry of Finance to order budget cuts of 50 percent throughout the entire bureaucracy, further underscoring how serious the government is taking threats of southern secession. The economic crisis will likely hit Yemen hardest at just about the time that President Ali Abdullah Saleh will be forced to step down as the unified country's first and only president -- leaving a power vacuum in his wake.

Yemen has done little planning for a post-petroleum economy, and most analysts doubt state expectations that natural gas will be able to fill the void left by oil. In a best-case scenario, if natural gas exports come online in significant quantities, there will still be a lag between the end of oil and the rise of gas. It is not at all clear how the country will deal with this inevitable gap.

Of even greater concern, perhaps, is the fact that the country is rapidly running out of water. Groundwater used for agriculture and basic human needs is being consumed faster than it can be replaced, resulting in dramatically falling water tables -- up to several meters per year in some places. Sanaa might very well become the first capital in the world to run out of water. Natural aquifers are being depleted at astounding rates due to a lack of any serious legal oversight, reckless irrigation techniques, and unregulated private exploitation.

India, with more than 50 times the population, has fewer than one eighth as many private water-drilling rigs. Nearly all Yemen's arable land is devoted to cultivating khat, a seminarcotic plant whose leaves are habitually chewed by most male Yemenis. The more water khat is given, the more it thrives, leading many farmers to irrigate with little thought to the consequences. Given the costs and terrain involved, desalination is not feasible. In the absence of significant measures to reduce urban population growth and eliminate the hidden subsidies that encourage unlimited private exploitation of the country's water, Yemen's future looks extremely bleak.

Exacerbating all these trends are the country's demographics. Yemen has one of the highest population growth rates in the world, at just under 3.5 percent. The current population is expected to double to more than 40 million within two decades. The delivery of basic government services is hampered by the fact that the population is spread throughout 135,000 villages, with many located in isolated areas. Education and healthcare services are limited for most, as is reliable electricity and other services. Most Yemenis outside major urban areas receive little from the central government, and as a result the regime's authority and presence in the governorates is largely absent.

Yemen has long had a reputation among outside observers of stumbling from one crisis to the next without ever completely collapsing, but much of what appeared to be blind luck was calculated governance fueled by petrodollars. When the well runs dry, that luck may run out as well.

Sandy Choi


Memo to Iraq, from Colombia

How to go from being a conflict-ridden deathtrap to a sunny tourist haven.

Earlier this month, the New York Times reported on an eccentric Italian traveler, Luca Marchio, who had wandered into Falluja and boldly, unselfconsciously, declared himself a tourist in what remains one of the most dangerous countries on Earth. Nervous Iraqi authorities swiftly escorted him to a safer locale before packing him on the next flight out.

He is a little bit naive, an Italian Embassy official told the Times. But maybe Marchio was just ahead of the curve.

The authorities explained to me that it was impossible because there are not any hotels here. They suggested a short tour and then go back to Baghdad, he said. I am looking forward to visiting all the beautiful places around Iraq, but I think not yet, the embassy official added.

Iraq's tourist infrastructure, set back thanks to the war of the past six years and decades of neglect before then, is today in shambles. We see it everyday: There are just a handful of places where you can do events, says the U.S. military's Cmdr. Gerard Shanley, who is a senior liaison to the Ministry of State for Tourism and Antiquities. The economy is continuing to expand while security improves. But Iraq is in need of hotel space, catering space.

Indeed, when a recent delegation of 200 foreign investors traveled to Najaf as part of World Tourism Week, they were disappointed to learn that there were not enough hotel beds to lodge them. Instead, the investors would have to go spend the two nights in Karbala, commuting back to Najaf for their visit.

Tourism in Iraq. It's an idea that sounds far-fetched -- even crazy -- to anyone who reads the newspaper. Conflict in Iraq was mentioned in more than 9,000 mainstream articles worldwide in 2008 -- hardly good press. Yes, violence has dropped off dramatically in recent months, but the 314 U.S. military and at least 9,000 mostly civilian Iraqi casualties during the same period strongly suggest that Iraq will remain on travel-warning lists for years to come.

Some 7,500 miles away from Baghdad, all of that sounds rather familiar. Just a few years ago, promoting tourism in turbulent Colombia looked like a lost cause. A guerrilla war pitting the Colombian government against leftist rebel groups had spread from the countryside to the cities during the last decade. Kidnappings were commonplace --motivated either by politics or ransom. Violence caused at least 3 million people to flee their homes. And fueling it all was a booming illicit coca industry that supplied demand in the United States and Europe. Tourism starting falling after 1980 -- shrinking by half to about 570,000 visitors by 2002.

Yet today, the view from the South American country has dramatically improved -- and not just for tourists. Bustling restaurants and bars are packed with visitors, locals, and good cuisine. The night lights of Bogot's commercial district shine as bright as the sun that heats up the country's teeming beaches. And although pockets of violence do remain, the security situation in cities and national parks is comparable to that of most countries in the region. The economy churned out a robust growth rate of 7.5 percent in 2007 and 4 percent in 2008. The Ministry of Commerce, Tourism and Industry says it hopes to welcome 4 million annual visitors by 2010.

Iraq, take note. For weak and vulnerable economies, tourism is one of the quickest ways to bring in hard foreign currency. Foreign visitors are [like] an export, explains Geoffrey Lipman, assistant secretary-general of the United Nations' World Tourism Organization (UNWTO). And you don't have to build up the distribution. If you can attract people in, they attract money and spending. Hotels, restaurants, and services hold great potential for employment, and spillover industry booms, especially with tourism growing at a lightning rate. The latest figures available from the UNWTO show tourism in the Middle East expanding 11 percent a year -- the fastest growth of any world region. And, you build an impression of the country; you build the brand, Lipman says. For a country emerging from conflict, there is hardly a more highly sought prize.

The first lesson of Colombia's success is that attracting tourism -- and fixing your country's image -- is not a question of mere aesthetic change. Countries get the image they deserve, says Simon Anholt, editor of Place Branding and Public Diplomacy and a consultant who advises image-poor countries on how to improve their reputations. Tourists are not fooled by public relations campaigns; they will come only when security and stability are the norm. Countries ring me up and say, We have a crap image; can you fix it?' And I say, Well, is it because you have a crap country?' They're shocked, but it's true. Otherwise, you're doing propaganda.

Tourism in Colombia has grown hand in hand with security, economic prosperity, and political change. At the export promotion office in Bogot, that point resonates. Six years ago, security was one of businesses' top concerns, remembers Juan Carlos Gonzlez, vice president of foreign investment. Now, the concerns are the exchange rate, the inflation rate -- things you would worry about in any country.

Colombia is still dogged by occasional travel warnings; the U.S. State Department's latest such report cautioned citizens just this past fall. But kidnappings have gone down. Intercity roads are safely traversable, now lined with restaurants and fruit stands with tropical fare. Drug trafficking is less brazenly violent and operates outside major thoroughfares. Much of this improvement has been thanks to government policy; the administration of President lvaro Uribe has made security a priority, placing a state military presence throughout the country. Now, the country's tourism office is not exaggerating too baldly when its materials proclaim, "The only risk is wanting to stay."

Colombia has also followed the second lesson of tourist promotion well: Know your strengths (and weaknesses) and start with what works. From the beginning, Colombia had reasonable expectations, focusing on niches that didn't need much help. When tourism promotion began several years ago, the government surveyed the country's 32 departments (provinces) to find the strongest destinations and the most-promising markets. It was easy to observe the strengths: Natural resources are obvious and abundant. The government's first picks -- cities like the coastal ports of Cartagena and Santa Marta -- were laced with exquisite landscapes, tropical forests, and Spanish colonial architecture. Success in those few places led Colombia to think bigger. We used to believe firmly in sun and beach, says Laura Cahnspeyer, an officer for tourism promotion, but now we realize that tourists today are looking for something [more]. ... We want a tourist that comes to Colombia not for the beach but for the country.

With the product primed -- through security and careful study -- Colombia started getting the word out. Three years ago, the country launched a branding campaign, Colombia is passion, meant to draw attention to the country's strengths and reforms. Sure, we have beautiful landscapes, but [focus groups] always talked about the people in Colombia, says Julio Galviz, in charge of media for the Imagen Pas group running the campaign. The country's strategic approach has paid off; in 2007, tourist numbers finally reached their previous 1980s level after years of decline.

Now reaping the benefits of increasing tourism, Colombia is consolidating the gains --and using tourism itself as a means to stabilization. In rural areas where national forests run close to coca-growing land, farmers are finding new employment as guides and park employees. Coca farmers just outside the Caribbean town of Santa Marta can find work selling mangoes, papayas, and watermelons to tourists -- dripping with lime juice and sprinkled with salt. They drive the white-and-blue-painted buses that ship tourists up difficultly steep roads, and they lead the professional touring companies that arrange for hours-long beach visits to blue-watered coasts only accessible by fishing boat.

Of course, there are skeptics who don't believe things to be so cheery. Anholt, who first coined the phrase country branding, claims he still imagines drug violence when he hears the word Colombia, no matter how many passionate advertisements he sees. But it is hard to disregard the statistics -- and the noticeable mood change.

All this leaves a clear to-do list for Iraq: First target security; then learn your strengths and plan how best to use them.

It's anyone's guess whether the security situation will continue to improve. But in other areas, Iraq is not as far behind as it might seem. Investors like the ones who visited Najaf and Karbala have poured optimism -- and cash -- into the industry. Of the $2 billion of non-oil foreign investment that was approved by the Iraqi government last year, $600 million went toward the tourism industry -- funding parks, hotels, and other services. Much of the investment falls in Najaf and Karbala, already home to the most promising Iraqi tourism industry: religious pilgrimages. On the religious tourism side, Iraq has already been experiencing some growth says a U.S. Embassy official in Baghdad. Shiite pilgrims mainly from Iran and also other parts of Iraq come to the holy cities. That route -- from rival Iran into Iraq -- was prohibited under Saddam Hussein. But despite today's relative chaos, long-denied pilgrims are eager to visit Iraq's shrines.

After religious destinations, archaeological sites hold the greatest promise. Mesopotamian historical sites are abundant throughout Iraq, but preserving them will be a full-time job. In addition to the damage from the war, curators and archaeologists will need to clean up from decades of previous neglect. Says 1st Lt. Samuel Logan, who works with Commander Shanley as part of the U.S. military team, Back in the 1980s before the Iran-Iraq war, the country was a tourist destination already. But it was not really done properly; for example, you would have a replica wall built right on top of ruins and the weight was damaging the actual ruins. The Iraqi National Museum, famously looted during the invasion, only reopened to staff in 2007; certain rooms are still untraversable. Today, Iraqi curators are learning how to refurbish the mess.

Meanwhile reconstruction could get the ball rolling. Today, there are 715 hotels in the country, with just a 22 percent occupancy rate. But as rooms are updated and new luxury accommodations built, the businessmen and diplomats attending to their work will become their own booming industry. There is talk of building a Gulf-style resort just outside Baghdad, as well as a number of five-star hotels within the city itself.

And then there is Kurdistan, where Hagob Serob Yacob, an official with the Kurdistan Regional Government's Ministry of Tourism, wrote via e-mail that he is certain the number of tourists are getting increased both from abroad and inside the country compared with 2006. Relatively safe Kurdistan already has free travel guides available online for at least three local governments. Restaurants, hotels, and attractions are also listed on the region's Web site,, for all would-be tourists to see. [We have seen] great support of the government for the tourism sector, and the big projects which are being implemented confirm what I am saying, Yacob wrote.

To be sure, Iraq's rehabilitation won't happen overnight. It will take years of global amnesia to improve Iraq's reputation, which is much worse than Colombia's ever was.

Anholt, the country consultant, says that if he was rung up by Iraq, I would say forget it. If you're a country at war and you're getting gigantic amounts of bad media, basically you are stuck. That's billions and billions of dollars in negative publicity; how can you fight against that?

But if tourism does indeed become part of Iraq's plan to bounce back, the country would do well to study Colombia carefully. Says Lipman, of the United Nations, In Iraq, they know that one day things will become relatively normal, and they're preparing for that. So don't buy your tickets yet, but start watching the fares.