Question

What are the possible consequences for Yemen in terms of it being labeled a failed state?

Answer 1

Yemen is labeled as failed state.There are many reasons for labeling it as failed state.The state is facing severe indigence due to which people of that state are still poor and able to improve their lifestyle.There was a time where the state faced  shortage of vegetables,fruits and other foods.This is due to high concentration on remaining sectors. Production of industrial products was given high importance which left farming sector behind and shortage occurred. This caused rise in price of vegetables and cereals leading to inflation.Another reason for being called as failed state is shortage of water and slow economic growth.These are main reasons for being labeled as a failed state.New consequences might arise for being labeled as failed state.Companies of other countries might not start their branch in Yemen since there is water shortage and even cost of production might be high as there is inflation in Yemen.The consequence of poor economy tends to continue.Another consequence which Yemen might face for being labeled as failed state is no foreign investment.Investors from foreign countries might find it risky to invest in the companies present in Yemen state as they are scared of getting low returns on stocks,shares,etc.Expenses of Yemen is higher than the income of the state.This might increase the consequence of higher loans and debts of the state.Poor budget analysis and low production might cause inflation.This leads to rise in cost of goods and services in Yemen,which further makes people to lead a poor lifestyle.Hence,these are the possible consequences for Yemen in terms of being labeled as failed state.