Yemen is suffering from ongoing political instability, armed insurgencies and both criminal and jihadi activities within its borders. Although some progress has recently been achieved in Yemen’s National Reconciliation Conference, very significant hurdles remain, including the desire of many in the South to form an independent state. We believe that a general election, scheduled to take place in February 2014, will not be held until Q214 at the earliest. Overall, the future of Yemen is of great importance for the Middle East. Yemen’s position next to Saudi Arabia means the kingdom is greatly concerned with instability spreading to its own territory. In addition, Yemen has emerged as a safe haven for al-Qaeda in the Arabian Peninsula, which has masterminded several failed terror attacks against the West. Furthermore, as Yemen borders the Red Sea and Gulf of Aden, any chaos in the country could boost piracy in these waters, which has already surged as a result of lawlessness in nearby Somalia.