Startups and Bitcoins in Yemen

Romans' name of the contemporary Yemen Republic's territory used to be the "Arabia Felix" (Happy Arabia). However, nearly none of Yemen's historical periods can be characterized as being particularly peaceful or prosperous.

Tribal and religion schisms had haunted that more than halve-of-a-million-square-kilometers piece of land stretched alongside the Red Sea for centuries. In fact, prior to the time of its political unification in 1990, Yemen wasn't even on the map. After obtaining its independence from Britain in 1967 one of the present Yemen's parts - the South Yemen - took the side of the Soviet-lead block of countries and then for more than thirty years tried to implement Marxist-Leninist orthodoxy into practice.

That unwise politics had resulted in the destroyed economy and the raging civil war. The South Yemen, which in 1962 was named the Yemen Arab Republic, had obtained its statehood much earlier, in 1918, but then, for almost all of 20th century, has been ravaged by multiple armed conflicts. 22 May 1990 those two neighboring African states launched the 30-months unification process. However, the new civil war has delayed the completion of this project for many years.

Arguably, the source of most conflicts in Yemen may be found in the complex ethnic and political compositions of this country, which is stitched from the multitude of jealously guarded tribal territories and is historically divided to two, Sunni and Shiite Muslims' dominated areas. In 2011 this inflammatory mixture had again exploded. Numerous social unrests had led to the open military clashes between the supporters of Sunni ultra conservative Salafi Muslim faction and the defenders of more moderate Shiite Zaidis group.

This local conflict not only continues but also its has been internationalized and today's Yemen serves as a proxy in the cold war between Saudi Arabia and Iran. Radical organizations like al-Qaeda have exploited the current situation in Yemen to their advantage and rapidly expand their presence on the ground.

All this chaos has converted Yemen into one of the poorest and most dangerous regions in the world which is not suited for high tech entrepreneurship. On the positive side, absence of competition and the growing mobile Internet penetration rate provide daring local founders with an opportunity to launch an e-business aimed at the increasing number of young users in the sectors of e-commerce, education, advertisement and FinTech.

In Yemen crypto-currencies are not regulated by the government, which makes it technically legal to trade crypto and to organize ICOs there. Moreover, Yemen's Central Bank stated that the Saudi-led coalition imposed a ban on flights bringing in newly printed currency notes from Russia which continues to strangle the Yemeni economy. That blockade has created an unique opportunity for wide-spread adaption of digital money in this troubled region of the world.

Business Notes for Startups Founders:

political climate: hostile;
economic climate: hostile;
regions to focus: locally;
industries to focus: e-commerce, alternative energy, education, advertisement, fintech;
major limitations: shrinking economy (GDP growth rate is the negative 10% in 2017), damaged infrastructure, absence of seed and VC capitals, qualified people fleeing the country, wide spread property rights violations, fixed Internet penetration rate under 25%;
stimulus: lower competitions, new markets;
opportunities: to launch a local e-business aimed at the growing number of young users of mobile Internet;
Crypto-currencies and ICOs (outlook): legal (positive).