It often takes a crisis to rivet our collective attention on problems such as those facing Yemen, a society that seems to be perpetually on the verge of collapse. While it is difficult to tease apart fact and fiction when dealing with Arabia Felix, Yemen has real problems that need attention from key international players, especially the United States and Saudi Arabia.

Over the past six months, the tone in international media coverage of Yemen has become increasingly apocalyptic. On the security front, the resurgence of al-Qaeda in Yemen has been well documented via a spate of brazen attacks, leading security experts to warn that the new generation of Yemeni militants will be more lethal than its predecessors. The failed state narrative, in which Yemen devolves into something resembling Somalia or Afghanistan, has also spread. Yemeni ministers, foreign aid workers, and journalists routinely predict an imminent demise, as food prices skyrocket, drought hurts harvests, the long-running al-Houthi rebellion in the north drags on, and riots erupt in the south over unresolved grievances stemming from the 1990 reunification of the country.

At the same time scholars (as opposed to journalists and other visitors) reflexively repudiate the idea that Yemen is on the brink of disaster, asserting that President Ali Abdullah Saleh operates in an environment of controlled chaos. Instability, critics allege, is manufactured to garner international sympathy - and external financing.

The old formula for power that made the controlled chaos scenario viable, however, may be changing. The December 2007 death of Sheikh Abdallah Hussein al-Ahmar, a key power-broker and interlocutor between Saleh and the tribal wing of the opposition Islah party, leaves a political void that Yemeni Salafis may attempt to fill. The 2009 parliamentary elections will be a key test in this regard. Presidential succession also clouds Yemen’s future. Saleh’s term ends in 2013, and the line of possible successors is growing, particularly from within his own extended family. Among the leading contenders are his son Ahmed and Saleh’s half-brother, Brigadier General Ali Mohsen al-Ahmar, the Commander of the Northwestern Military Flank and an alleged Salafi sympathizer.

Civil society activists and international observers point to signs that the twin pressures of insecurity and economic stagnation have overwhelmed the authorities and led to curtailment of political freedoms. In June, a state security court sentenced noted independent journalist Abdulkarim al-Khaiwani to six years in prison on a charge of collaborating with al-Houthi insurgents. Observers believe that the regime targeted al-Khaiwani for his investigative reporting on the revolt. While in prison, he received an award from Amnesty International for his work. 

Yemen’s systemic challenges certainly are real and must be taken seriously. Oil production is dropping rapidly and, despite the government’s insistence that new fields will be discovered, many promising areas already have been explored. Yemen also has one of the greatest water shortages worldwide. To keep pace with population growth, Yemen requires a massive infusion of cash and energy to finance and fuel several costly desalination plants.

And yet, something more than mere alarmism about Yemen’s predicament is needed. Unfortunately, the key international players—the United States, Saudi Arabia, and other Gulf Cooperation Council (GCC) countries—have been unable to formulate a collective long term strategy to save Yemen from itself. There seems to be no real consensus among the outside powers about whether Yemen faces a heightened risk of instability now and what the consequences of such instability would be.

An ongoing misunderstanding between Yemen and the United States about counter terrorism efforts is a major problem. For nearly a year, U.S. relations with Yemen have been deadlocked over the fate of Jamal al-Badawi, a ringleader in the 2000 USS Cole bombing who was released from prison after swearing allegiance to Saleh and pledging to cooperate against al-Qaeda. Critics charge that the government is protecting Badawi, among others, despite repeated U.S. demands for his extradition. Yemen refuses to cave in to U.S. pressure, citing a constitutional ban (Article 44) on extraditing Yemeni citizens to foreign entities, while insisting that the nearly one hundred Yemeni prisoners detained in Guantanamo Bay, Cuba be returned to Yemen for “reintegration.” U.S. policymakers not only resent Yemen’s obstinacy, but feel a visceral sense of injustice knowing that operatives such as Badawi remain at large. For his part, in a June 2008 New York Times interview, the Yemeni president called the United States “arrogant” for demanding that he sever ties with known al-Qaeda supporters.

The Badawi stalemate, coupled with growing U.S. concern about security and political conditions in Yemen, has gone well beyond a war of words to put the entire bilateral relationship into the deep freeze. The Millennium Challenge Corporation’s $20.6 million threshold program—which was to help Yemen meet standards required for a much larger package of economic development assistance—is suspended. Rocket attacks in spring 2008 on or near compounds where U.S. officials lived, caused the U.S. Embassy in Sana’a to evacuate all non-essential personnel. And after al-Khaiwani was sentenced, the U.S. Department of State publicly rebuked the regime, stating that his imprisonment “points to a distressing trend in Yemen of intimidation and prosecution.” For the United States, it continues to be difficult to craft an overall policy approach toward Yemen that disaggregates security issues from humanitarian and democratization concerns.

When it comes to Saudi Arabia and the GCC, Yemeni officials use the specter of Iranian meddling in the al-Houthi conflict to seek support from their Saudi neighbors, who are alarmed by a Shi’i insurgency on their borders. Although the Saudis have increased both their political and financial support for Yemen in recent years, the rest of the GCC has not been as forthcoming, feeling no real sense of urgency to accelerate Yemen’s bid for GCC membership. Furthermore, it is doubtful that the conditionality attached to Saudi and GCC money will mirror U.S. and Western reform priorities.

The tipping point for Yemeni stability may be approaching, although it also is quite possible that in the years ahead Yemen will muddle through as a ward of Saudi Arabia and the GCC. Either way, who is paying attention? Until its problems spread, a sustainable policy toward Yemen will continue to be caught between crisis and complacency.

Jeremy M. Sharp is a specialist in Middle Eastern Affairs at the Congressional Research Service. The views expressed are the author's and not necessarily those of the Congressional Research Service.