Arabia Watches Warily as Yemen Marches Toward Democracy : Mideast: Its freewheeling policies have sent shock waves through the region. The West also is concerned.

There was little to prepare this land of volcanic peaks and sand-swept villages, once the arid domain of the Queen of Sheba, to lead Arabia on the road to democracy.

The narrow streets are still filled with men who thrust curved daggers in their belts. The tribes of the north even now wage occasional conquests from hill to rocky hill. Ancient dhows still call on the busy seaport of Aden. And politics and business, in the manner of eras past, unfold in closed rooms as tobacco is puffed in narghiles and sweet tea is sipped.

But the end of the Cold War has left traces even here in the remote reaches of the Arabian Peninsula. And in a desert mirror of the unification of Germany, the newly put-together Yemen has become the most vigorous democratic experiment in a land of sultans, emirs and kings who have for centuries resisted the ballot box.

Upcoming parliamentary elections in the fall--Yemen’s first since the free-market north merged with the Marxist south in 1990 and a new constitution allowed political parties, free speech and a free press--have sent shock waves throughout the Persian Gulf. Conservative monarchies in the region fear that Yemen’s new, freewheeling politics could unleash an unstoppable tide toward multi-party politics.

The alarm bells have extended throughout the Middle East and beyond to the West.

There have been protests from Arab embassies, and the United States and Britain both have drastically reduced aid to Yemen to display displeasure over its friendly relations with Iraq (which began with Yemen’s 1990 U.N. Security Council vote opposing the use of force against Baghdad) and reports that it is harboring a training camp for militant Islamic fundamentalists.

But Yemen, a tiny country that defiantly threatened to shoot down American planes that strayed too close to its shores during the Persian Gulf War, has used its alienation from its neighbors to launch a political and economic development program that could make it a self-sufficient oil exporter, the most populous nation on the peninsula and potentially one of the most influential.

“Since the Gulf War, we have been cut off, but sometimes things that are bad turn out to be good,” President Ali Abdullah Saleh said last week. “Such a situation pushed us to depend on ourselves. In the last two years, we have been able to speed up our exploration of oil, for example. We still need investment for this, of course, but we are aspiring now to exploit our own resources. We still appreciate the previous support from our Gulf brothers, but we are not going to continue to beg.”

Unification of the two feuding Yemens in May, 1990, smoothed the way for new oil exploration along its borders. Analysts now predict Yemen could export 600,000 barrels a day in three to four years, putting it in the league of neighboring Oman, a minor-league Persian Gulf producer. Yemen also soon may be able to exploit its substantial gas reserves.

The prospect reportedly has alarmed neighboring Saudi Arabia. The Saudis worked vigorously to impede the Yemeni unification that left a populous democracy on its borders; they now appear to be seeking to slow development of Yemen’s fledgling oil industry.

Renewing age-old border conflicts with its southern neighbor, Saudi Arabia in recent weeks notified three major oil companies exploring in Yemen that their tracts are in Saudi-claimed territory. The new border disputes have reportedly halted some exploration in the Red Sea.

Last week, Riyadh shocked Sana with a letter to the Yemeni government, from Prince Bandar ibn Sultan, Saudi Arabia’s ambassador to the United States, extending Saudi land claims deep into the heart of Yemen; the territorial claims extended as far south as the Hunt Oil concession in Marib. That is the site of the home of the Queen of Sheba, one of the Seven Wonders of the Ancient World, and turf that Yemenis hold dear.

The Saudis’ land claims followed their effective expulsion of 850,000 Yemeni workers during the Gulf crisis. That action, coupled with similar moves in other Gulf countries, cost Yemen up to $1.1 billion in lost remittances. It left its economy, at least until oil production picks up, in ruins. Unemployment now stands at 27%; there are 700,000 Yemenis out of work; inflation is approaching 60%.

Yemeni officials and analysts say that Saudi Arabia’s real worry, more than a year after the Gulf War’s end, is not solely focused, say, on any Sana-Baghdad ties.

Instead, the Saudis’ chief concern can be found, for example, in underground cassettes of Yemen’s vigorous parliamentary debates and its opposition party newspapers; both have begun circulating in Jidda and Riyadh, where Saudi King Fahd, like most other Gulf monarchs, has resisted calls for multi-party elections and has declared that democracy is not compatible with Islam.

“Everybody knows our neighbors in the Gulf, especially Saudi Arabia, are not happy with our system. They don’t want rulers to be accountable to the people, they don’t want a strong parliament, they don’t want a free press,” said Abdulaziz Saqqaf, a Harvard-educated finance professor at Sana University and editor of the English-language Yemen Times.

“All these new values that we are experimenting with are taboo in the Gulf states, and they see us as being the spring that will disturb the stagnant equilibrium they have in their societies,” he said. “So they see it as in their interest to terminate our experiment.”

Yemeni officials believe that the Saudis have channeled substantial financial support to a muscular new Islamic party, the Islah. It has linked the old tribal chieftains of the north to Islamic fundamentalists of the Muslim Brotherhood. That has created the only significant challenge to the former ruling parties of the north and south, which are jointly governing the country in the transitional period before November’s elections.

The religious elements in Yemen already have made their influence felt, especially in the formerly Marxist and secular south. There, laws prohibiting polygamy and the marriage of very young girls were taken off the books after unity, along with laws guaranteeing equal job opportunities for women and protection for them during divorce proceedings.

In general, there is a sense of disillusionment in the south with the idea of unity. Like East Germans, southern Yemenis are undergoing the unraveling of their state-run economy, with its subsidized food prices, free medical care and education. They are still awaiting benefits. Food prices in the south have jumped from 150% to 400% since unification, and salaries have been slow to catch up.

Also, crime has skyrocketed in a region that was controlled until only recently by the iron fist of the Yemeni Socialist Party. Gunfire can be heard nightly in the streets of the former southern capital of Aden; armed bandits have attacked the main highways in both the north and the south; and there have been almost 150 cases in Aden alone this year of vehicle theft--often by armed men stopping and seizing cars.

“People start wondering how come the Socialist Party was able to maintain law and order for a quarter of a century, but in two years of unity all these things have gone,” said Ahmed Hobaishi, a socialist in the transitional National Assembly. “People in the south were looking forward to seeing a free economic situation, but now they are shocked because they realize that having a free economy is not worth it if there is no stability and security.”

Omar Jawi, a leading opposition politician from Aden who is affiliated with neither of the two main parties, observed, “This is a manifestation of unity. We are all the same in fear.”

Jawi was shot last September and a political associate was killed in the beginning of a wave of political killings and assassination attempts, which most recently, in April, left Justice Minister Abdul-Wasi Salam, a Socialist Party member, shot in the eye and the foot as he walked out of his office at midday.

Most, but not all, of the attacks have been directed at Socialist leaders. But in the complicated web of Yemeni politics, fingers have pointed at everyone from Islamic fundamentalists to the General People’s Congress of President Saleh in the north, to a breakaway socialist faction that clashed violently with the socialists in Aden in 1986, and predictably, in a country that tends to blame almost every woe on its northern neighbor, to the Saudis.

Government officials say they have arrested some of those responsible for the attack on the justice minister. But they say other suspects have been shielded by northern tribesmen, historically backed by the Saudis but linked also to Islamic fundamentalists.

The wave of terror continued later in April, when Ali Kassidi, Saudi Arabia’s ambassador to Yemen, was held hostage in his embassy for 19 hours by a gunman demanding $1-million ransom. Yemeni journalists who spoke to him by telephone during his ordeal say the assailant demanded money for a militant Islamic group bent on seizing power from the two ruling parties. The ambassador was finally freed when Yemeni commandos stormed the embassy and threw hot tea in the suspect’s face.

Some Yemenis fear all the trouble may be just the opening act to a drama that could unfold as election season approaches, when Yemen’s two ruling parties vie for power with each other and with what appears to be the most heavily armed Islamic movement in the region.

The problem, analysts say, is that Yemen has achieved unification but not unity--and both former regimes appear disinclined to give up power.

Neither Saleh’s General People’s Congress, which presided over an unpopular military dictatorship in the north, nor the Socialist Party, which drove the economy of the south into the ground, enjoy much popular support. But since few, except the new Islamic party, have much popular support, the November elections look as if they will be a showdown between the two.

Will the Socialist Party, which now represents 50% of the government although it held sway over only South Yemen’s 2 million people before unification, be willing to give up power to the northern party, which governed the north’s 12 million people? And will it be willing to do so given the fact that most of Yemen’s oil wealth is in the south?

One indication of the answer, diplomats and political analysts note, is that the army of the south has not yet merged with the army of the north. That means the Socialists still have a militia to rely on, if the political process fails to give them what they want.

Equally perplexing for pro-democracy activists is whether Saleh and his associates will ever be willing to relinquish their hold on executive power.

The upshot has been a round of power-brokering in recent weeks among leaders of the largest of the 10 political parties. Most analysts predict the result will be quiet agreements in which all parties are guaranteed a share of the new government.

Those who have been involved in the maneuvering say that Saleh is likely to be guaranteed another four-year term; Socialist leader Ali Salim Bidh will get another term as vice president. In exchange for these roles, the men will guarantee to minimize their interference with the new Parliament’s role in real decision-making.

Thus, political analysts say, while the upcoming elections may not be entirely free, they likely will pave the way for free elections later, once Yemen has had a chance to build real civic institutions and the groundwork of a free political system.

Abdul-Karim Iryani, Yemen’s foreign minister, says there is no basis for neighboring regimes to express alarm about such a course: “There is no doubt that a unified Yemen is a greater country than a partitioned Yemen. But in my view Yemen unity has removed one of the hotbeds of conflict in the Arab world.

“The trend, the mode today, is for democracy, a multi-party system,” he said. “This is the language of the age. I’m proud that we are speaking it. I don’t think anybody should be worried. If that worry exists, I think it’s very old-fashioned thinking.”

Democracy in a Land of Sultans

Here is Yemen at a glance. * Population: 12 million

* Language: Arabic

* Global significance: Yemen has launched a political and economic development program that in future years could make Yemen a self-sufficient oil exporter. The most populous nation on the Arabian Peninsula is now potentially one of the most influential.

* What to watch: Upcoming parliamentary elections in the fall are Yemen’s first since the free-market north merged with the Marxist south in 1990. Conservative monarchies fear that Yemen’s new free-wheeling politics could unleash an unstoppable tide toward multi-party politics.

Source: Political Handbook of the World, staff reports