Resource curse contagion in the case of Yemen. (September 2016)

• Record Type: Journal Article
• Authors: Ansari, Dawud
• Is Part Of: Resources policy. Volume 49(2016)
• Page Start: 444
• Page End: 454
• Publication Date: 2016-09
• Subjects: Resource curse -- Yemen -- Oil curse -- Patronage -- Remittances -- Development; Mines and mineral resources -- Periodicals; Ressources minérales -- Périodiques; Ressources naturelles -- Gestion -- Périodiques; Environnement -- Politique gouvernementale -- Périodiques; 333.8
• DOI: 10.1016/j.resourpol.2016.08.001
• Languages: English
• ISSNs: 0301-4207

Abstract

Abstract: This study analyses the economic developments in Yemen from the 1970s to today in the context of the resource curse hypothesis. After a brief survey of the resource curse literature, using empirical data, historical accounts, and political (economic) analyses, I confirm that post-reunification Yemen suffers from an intense oil curse. The curse is evidenced by low genuine savings rates, oil-dependency, a stagnating economy, and institutional failure. However, this study finds that the institutional failure which caused this is itself a product of the resource-curse-like developments following migrant worker remittances from Saudi Arabia in the 1970s and 1980s. Moreover, the current instability in Yemen has its origins in rent-seeking defections in the corrupt governing patronage network due to sudden anticipations of oil exhaustion. The analysis suggests that worker migration is able to transmit resource curse symptoms to other economies, which makes them also more vulnerable to future resource curse triggers, and that declining resource reserves increase political instability of countries with strong patronage networks. Highlights: Empirical analysis of the resource curse in Yemen 1970–2015. Workers' remittances from Saudi Arabia transmitted curse symptoms in the 1970s Yemen has been governed by a patronage network resulting from the remittance curse. Post-reunification Yemen suffers from oil-dependency and a stagnating economy. State failure as a result of diminishing oil revenues.