Recent unrest in Yemen indicates that the Gulf state—for decades the region’s poorest—may be in slow-motion collapse. On April 6, 2008, an Al Qaeda bombing shook the capital city of Sanaa, capping a spree of political violence that killed 21 people. Riots have flared in response to stagnant economic conditions and rising food prices. The most dismal omen came in March, when the state’s oil ministry admitted that oil production has fallen considerably and will continue to drop. Indeed, while the current violence affects Yemen’s political stability, it is economic security which, in the long run, is most endangered. Though Yemen’s current instability is worrying, only more trouble lies ahead for the nation.

Al Qaeda in Yemen (AQIY) is the most prominent of the recent threats to Yemen’s stability, mounting a recent surge in anti-government propaganda and violence. A new generation of jihadis, battle-tested in Iraq and virulently anti-American, have rejected the conservatism of AQIY’s old guard and criticized the Yemeni government for cooperating with the United States. Since mid-2007, Al Qaeda has supplemented its propaganda with a series of attacks on military compounds and tourist convoys. In April 2008, those attacks increased in severity.

A second destabilizing factor includes the renewal of the four year-old Houthi rebellion of Zaydi Shi’a in northern Yemen. The rebellion began in 2004 under Zaydi leader Badr al-Din al-Houthi and was revived, several years after al-Houthi’s death, by his brother Abd al-Malik. According to experts, the Houthis aim to overthrow President Ali Abdullah Saleh’s government and restore the Shia imamate that was toppled in 1962. The Houthis maintain that their real objection to the Sanaa government stems from its partnership with the United States. Regardless of their intentions, the Houthis are responsible for four years of on-and-off guerrilla violence and have been accused of terrorist attacks.

The third indicator of the country’s weakness is the long-term rift between North and South Yemen. Riots have threatened the precarious unity of the two regions, which were only joined in 1990 after a 30 year separation. Residents of the former South Yemen accuse Saleh, president of North Yemen before 1990, of favoring the North through government patronage and employment. Southerners have also recently protested against Sanaa’s treatment of soldiers who fought against the North in the 1994 civil war. This unrest prompted Saleh to deploy troops and tanks to South Yemen, further exacerbating the violence.

Solutions to these conflicts are more elusive than they might seem. In 2001, for example, Saleh parlayed Yemen’s strategic importance in the war on terrorism into promises of US economic and military aid. After gaining US support, Yemen cracked down on domestic militancy by casting a wide net and rounding up militants and dissidents it deemed to be terrorists. By 2002 the threat of Al Qaeda in Yemen seemed to recede. However, Saleh’s US ties themselves spawned a new wave of violence from Sunni and Shia alike. Moreover, Saleh’s counterterrorism initiative is dependent on the willingness of tribal leaders to cooperate with the government. More than once, terrorist suspects have escaped prison to seek asylum with their tribes; Saleh, not having the power or the desire to force their capture, has let them go.

Still, Saleh retains some power, and with Gulf states and the United States unwilling to see Yemen descend into chaos, help may be forthcoming. US President George W. Bush affirmed his concern for Yemen’s stability in April of this year, and if violence persists, an increase in aid is likely. Meanwhile, Sunni Gulf states have been particularly alarmed by the resurgent militancy of the Houthis, who, some allege, are funded by Iran. States such as Qatar have been proactive in mediating diplomatic talks between the Houthis and Yemen.

But even supposing Saleh is able to gain the upper hand in the fight against Al Qaeda and the Houthis—as he has done in previous years—the situation would improve only by a small degree before growing worse. No matter how much assistance it receives, the government’s authority is limited by its weak military and economic power. The 1994 civil war and recent protests over the army demonstrated the fragility of military power. The real danger, however, lies in the country’s economy. Yemen has long been one of the Middle East’s poorest countries. 45 percent of Yemenis live on less than US$2 a day, and unemployment is at nearly 40 percent. Yemen’s economic future is dependent upon two vital commodities—oil and water. Its meager standard of living is only made possible by the flow of nationalized oil revenue, which accounts for as much as 70 percent of GDP. Even worse, this lifeline may itself be short-lived. Oil production decreased 27 percent from 2002 to 2007, as the most accessible oil fields were exhausted. Future production will rely on more expensive extraction techniques, and oil companies are not optimistic about the future.

The country also faces an impending water crisis. Only 20 percent of rural Yemenis have access to safe drinking water. Groundwater is being depleted five times as fast as it is being restored. Within 20 years, Sanaa will not have enough water for its growing population, 40 percent of which might have to relocate. The government has done little to address the crisis, but population growth and the transition to a more water-heavy diet have made water shortages practically inevitable.

Political stability in Yemen will depend on the government’s ability to quell rebellions and reduce violence. This is a difficult challenge, but it is one that Saleh has faced in the past. Having helped unify Yemen in 1990, end a civil war in 1994, and put down the Houthi rebellion for the first time in 2004, Saleh has a legacy of crude but effective leadership. However, the other crucial component of stability, and the most threatened one, is economic. Yemen’s crumbling economy has prevented the government from offering the extensive public-sector job opportunities that can satisfy its people. Diminishing water supplies have provoked inter-tribal warfare over water rights. The main cause of riots throughout Yemen has not been North-South tensions, nor Sunni oppression, but the price of food. The festering violence in Yemen reflects a real lack of state power—power which will inevitably diminish as the realities of demographics and natural resources set in. Saleh cannot guarantee Yemen long-term security without addressing these realities.