Yemen

BMI is concerned about the worsening ties between Sana'a and Washington. Yemen was prompted on 5 December to deny reports that an al-Qaeda fighter convicted of taking part in the bombing of the USS Cole had been freed from jail for a second time, which led to the US suspending a US$20.6mn aid package. The Saleh government is showing signs of soft-pedalling on the al-Qaeda issue, which would lead to a weakening of US military and economic support, in order to pursue domestic political aims. This will provide an added political risk factor in Q1.

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