Yemen borders the Arabian Sea, Gulf of Aden, Red Sea, Oman and Saudi Arabia. The country’s northern and southern areas were formally unified as the Republic of Yemen in 1990. Foreign exchange earnings mainly come from exports of oil which is further strengthened with the start of LPG export in 2010. The government’s economic strategy is focused on promoting development of the non-oil sector. In particular, the government plans to strengthen the financial sector, increasing the number of microfinance banks, modernizing the local commercial courts, reducing red tape and updating investment regulation.
North Yemen gained independence from the Ottoman Empire in November 1918, and South Yemen became independent from Britain on November 30, 1967. The Republic of Yemen was established on May 22, 1990, with the merger of North Yemen (the Yemen Arab Republic) and South Yemen (the People’s Democratic Republic of Yemen).
The banking and financial sector like other sectors of the economy has witnessed much improvement during the last ten years. Not only there has been an increase in the number of banking and financial institutions, savings and credits, but also a qualitative improvement has accompanied such growth. Islamic banks based on Islamic Sharia (legislation) were established. Treasury bills and the expansion of banking credit cards and automated teller machines were introduced.
Yemen’s principal natural resources are oil and natural gas as well as agriculturally productive land in the west. Other resources include fish and seafood, rock salt, marble, and minor deposits of coal, gold, lead, nickel, and copper.