Yemen risks failing as a state without aid

LONDON (Reuters) - Yemen risks becoming a failed state unless the international community helps develop its economy to give young people alternatives to a path of Islamist radicalization, its foreign minister said on Tuesday.

Abubakr al-Qirbi made the remarks in an interview with Reuters ahead of a meeting on Wednesday in London where foreign ministers of Western powers, Gulf states, Egypt, Jordan and Turkey will discuss ways to stabilize Yemen.

"The actual fact is that the economic problem is the major cause of all the ills Yemen is facing now," Qirbi said.

"I hope it (Yemen) will not become a failed state, there is a risk of course, but I think a component is how much the Yemenis will rise up to the challenges and really move away from political squabbling," Qirbi said when asked whether the country has reached that level of danger.

He said the meeting will mobilize international support and identify what needs to be done to address poverty, development and unemployment and provide Yemen with means to counter radicalization "which is leading to extremism and terrorism."

Alarm was raised that Yemen, located on one of the world's busiest shipping lanes, was turning into an al Qaeda recruiting ground after a Yemen-based wing said it was behind a December 25 attempt to blow up a U.S.-bound plane with 300 people on board.

Yemen declared war on al Qaeda under pressure from Washington and Saudi Arabia, its oil producing neighbor and its main aid backer along with the United States. Both countries fear al Qaeda could exploit the chaos in Yemen to turn it into a launch pad for further attacks.

"Yemen has a serious economic problem, it has a serious poverty problem, it has a serious challenge of unemployment among its young people," Qirbi said.

"All this constitutes a breeding ground for radicalization and therefore if Yemen does not get the economic support, the development support, radicalization will be a serious challenge."

'A TRULY POOR COUNTRY'

Forty two percent of Yemen's 23 million population live on less than $2 a day. Qirbi said unemployment stood at 30 percent and 65 percent of the country's population was under 25.

"Yemen is a truly poor country. Yemen's only revenue is oil, oil constitutes about 70 percent of revenue. This is now dropping to 50 percent because of the reduction in oil production and oil prices. So Yemen is a country with very limited resources."

He said the Yemeni government was engaged in talks with the World Bank and the International Monetary Fund (IMF) on a rescue plan but would not elaborate.

Qirbi rejected any Western suggestion that the government had allowed al Qaeda to flourish. "Yemen started fighting al Qaeda long before September 11," he said.

Yemen gained a reputation as an al Qaeda haven after the September 11, 2001 attacks in the United States, although militants had already bombed the U.S. Navy warship Cole in the port of Aden in 2000, killing 17 sailors. Two years later an al Qaeda attack damaged a French supertanker in the Gulf of Aden.

Yemenis were one of the largest groups to train in al Qaeda camps in Afghanistan before the Sept 11, 2001 attacks.

Setting al Qaeda aside, there is a long list of long-standing problems that are causing instability in the Arab country including a Muslim Shi'ite revolt in the north, a secessionist movement in the south, water shortages, failing oil income and weak state control.

Qirbi said his government has invited the country's rival factions for dialogue.

"There is a call for dialogue at the end of this month. All grievances, all issues that are important for our reform agenda, for political development for enhancing democratization will be discussed. I stress such issued have to be addressed under two principles -- not to compromise the unity of the country and the Yemeni revolution.

(Editing by Giles Elgood)