Yemen faces a complex and dangerous mix of security problems. Its fiercely independent tribes have long been considered an important breeding ground for al-Qaeda Islamic extremists and North Yemen is the ancestral homeland of Osama Bin Laden. The threat from al-Qaeda has intensified over the last year, with the September 2008 suicide bomb attack on the US embassy in Sanaa, which killed 17 people, underlining the organisation's current capabilities. A separate Shiite rebellion has dominated the northwest with alleged support from Iran - a ceasefire was implemented in mid-2007 but fighting flared up again in the first half of 2008. To add to these challenges, the second half of 2008 saw an increase of privacy in the Gulf of Aden. Although primarily the work of Somali clans, the threat to shipping from piracy affected Yemen. Separately, there are still tensions between the North and South that can be traced back to the brief civil war of 1994. Tribesmen also seek to resolve a variety of local disputes over water, land, roads and electricity supplies among other things by kidnapping foreign tourists and negotiating for the their release. In addition there is a large supply of weaponry in the country and scant regard for central authority. While all this could be described as a security nightmare, the country in other respects has certain strengths. Since 9/11, Yemen has become a close ally in the US government's 'war on terror' and although subject to authoritarian rule, in some respects Yemen offers greater political freedoms than many other Arab governments. A key figure in Yemen's balancing act is of course President Ali Abdullah Saleh. His grip on power has seemed as tight as ever, however, there is an emerging challenge from the opposition parties in the run-up to the April 2009 parliamentary elections. Yemen now enjoys relatively stable relations with its neighbours following a decade of tensions over several bilateral territorial disputes, primarily with Saudi Arabia, and Riyadh is now supportive of the presidency in Sana'a. However, some security challenges are presented by internal instability in the postunification period. The military remains a favoured recipient of government investment and procurements for all three branches of the armed forces continue despite overwhelming budget constraints and a lack of trained personnel to use the equipment. It is likely that Yemen will maintain its military strength and seek to further modernise specific sectors of its military to respond to new or existing terrorist threats. Yemen is completely dependent upon foreign procurements, as it enjoys no indigenous defence industry. Yemen's total reliance on the procurement of foreign produced arms forces the government to depend on a brisk arms trade, although not so brisk as some of its neighbours. Historically, Yemen has acquired Russian and ex-Soviet bloc states for military equipment but recent signs suggest that Sana'a is seeking to diversify. The September 2004 lifting of a US arms embargo on Yemen has allowed entry for US firms into the Yemeni market, however, given budgetary restrictions, procurements have not yet taken place. Sana'a is stable for the time being but is under immense financial restraints. Oil production only began in Yemen in the 1990s and, while average incomes rose as a result, the industry only employs a small percentage of the workforce and has not succeeded in generating substantial wealth. However, Yemen maintains a high level of military expenditure relative to GDP. In 2005, Yemen spent approximately 7.5% of its GDP on the military. This trend is unlikely to change.
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