weighted score 2.2 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Yemen
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Yemen as a sourcing destination.
Labour cost competitiveness
8
Nominal wages extremely low — but reflects economic collapse, not cost competitiveness. No functional labour market. 22 million need humanitarian aid.
Supply base depth
1
No manufacturing capacity. Pre-war industrial base destroyed. No supplier ecosystems, no quality infrastructure, no commercial supply base of any kind.
Logistics & infrastructure
2
Ports severely damaged. National electricity grid non-functional. Roads damaged by conflict. Dual governance creates impossible logistics coordination.
Workforce skills
2
Education infrastructure collapsed. Skilled workforce emigrated. 2.2 million malnourished children. No technical training capacity.
Scalability
3
No production capacity to scale. Any future recovery would start from near-zero base. Conflict must end before any economic rebuilding is possible.
Ease of doing business
1
Failed state with two rival governments. No unified legal framework. Banking system impaired. Contract enforcement impossible. Sanctions compliance required for all transactions.
Trade access & tariffs
2
EU EBA eligible (duty-free) but theoretical — no commercial exports. Sanctions on Houthi entities complicate all transactions.
Sustainability baseline
1
No environmental regulation. No ESG reporting infrastructure. Conflict-driven environmental destruction. Water crisis. No sustainability baseline measurable.
Innovation & IP
1
Zero innovation capacity. No R&D. No patent activity. Research institutions non-functional. Complete brain drain.
Quality standards
1
No functioning standards body. No accredited laboratories. No quality certification possible. International standards cannot be implemented or verified.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Labour cost
- Nominal wages are extremely low but this is a reflection of economic collapse, not cost competitiveness. The economy has contracted approximately 50% since 2015. There is no functional labour market in the conventional sense.
- Workforce availability
- Population of approximately 34 million, but 22 million need humanitarian aid and 18.3 million are food insecure. The workforce is focused on survival, not productive economic activity.
- Skills base
- Education and training infrastructure has collapsed. Skilled workers have emigrated where possible. No technical workforce available for manufacturing or services.
- Cost-benefit assessment
- Yemen scores 8 on labour cost competitiveness (low cost) but this is meaningless in sourcing terms — the country has no functional economy, no supply base, and no commercial infrastructure.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Manufacturing capacity
- Effectively zero. Pre-war manufacturing was minimal and has been destroyed by a decade of conflict. No industrial clusters, no supplier ecosystems, no quality management infrastructure.
- Port infrastructure
- Hodeidah (Houthi-controlled) and Aden (PLC-controlled) operate at severely reduced capacity. Conflict damage, equipment degradation, and dual governance create impossible logistics conditions.
- Energy supply
- National electricity grid non-functional in most areas. Generator-dependent power supply where available. No reliable energy infrastructure for any economic activity.
- Telecommunications
- Mobile network coverage reduced. Internet infrastructure degraded. Basic communications are unreliable in many areas.
Trade Access & Business Environment
Trade Access & Business Environment
- EU trade access
- EU EBA eligible (duty-free, quota-free) as an LDC. But this preference is theoretical — Yemen has effectively nothing to export in commercial quantities.
- Sanctions environment
- US, EU, and UN sanctions on Houthi-affiliated entities create compliance barriers for any transaction. OFAC SDGT designation of Ansar Allah (January 2024) means comprehensive screening required.
- Banking system
- Severely impaired. Two parallel central banks (Sanaa and Aden). Currency has collapsed. International banking relationships are extremely limited. Trade finance effectively unavailable.
- Regulatory environment
- Two rival governments issue conflicting regulations. No unified legal framework. Property rights non-enforceable. Contract enforcement impossible.
Innovation, IP & Quality
Innovation, IP & Quality
- Innovation capacity
- Zero. Research institutions non-functional. No patent activity. No R&D investment. Brain drain has removed skilled professionals.
- Quality infrastructure
- No functioning standards body. No accredited testing laboratories. No quality certification infrastructure. International quality standards cannot be implemented or verified.
- IP protection
- IP protection regime non-existent in practice. No functioning judiciary to enforce IP rights. Dual governance creates fundamental legal uncertainty.
- Overall assessment
- Yemen is not a sourcing destination by any measure. Its inclusion in the attractiveness index is for completeness and to provide context for the geopolitical risk it poses to global supply chains through Red Sea disruption.