by Brian Whitaker

Originally published in Middle East International,16 October 1998

THERE WERE celebrations in Yemen last week on the news that an international court had ordered the return of Red Sea islands seized by Eritrea. At least 12 people died and more than 200 Yemenis were taken prisoner in December 1995 when Eritrean forces occupied Greater Hanish, one of three main islands in an archipelago almost midway between the two states and alongside one of the world's busiest shipping lanes.

Since the British occupation of Aden, the islands had generally been regarded as part of Yemen. Greater Hanish was inhabited only by a few Yemeni fishermen, apart from a short period when Yemen allowed Eritrean guerrillas to use it as a base for their liberation struggle.

Later a German company, under Yemeni auspices, began building a hotel and scuba diving centre there. The Yemenis then sent a force of 200 men, ostensibly to guard the construction site. Eritrea, meanwhile, signed a $28.5 million oil and gas exploration deal with an American company Eritrea for an area of the Red Sea close to the disputed islands.

The Eritrean attack both surprised and humiliated Yemen, coming only a few hours after the President Issayas Afewerki had sent a friendly note to his Yemeni counterpart, Ali Abdullah Salih. Among numerous officers taken prisoner on the island (but later released) was the Brigadier-General commanding the Yemeni army's western flank, together with three colonels, five majors, eight captains and 11 lieutenants.

After prolonged diplomatic wrangling - and mediation efforts involving Ethiopia, Egypt, the United Nations and France - both sides agreed to submit their territorial claims to the Court of Arbitration at The Hague. A panel of five judges has been holding deliberations in London.

At a cursory glance, the text of the tribunal's ruling, issued on October 9, appears more even-handed than it actually is. Three paragraphs award territory to Eritrea, two award territory to Yemen, and one deals with fishing rights.

But the tribunal has actually reviewed ownership of more than 40 islands and islets that might conceivably be disputed by the two countries. Sovereignty of the Zuqar-Hunaish group - the subject of the 1995 conflict - has unquestionably been awarded to Yemen. Eritrea has sovereignty over a few smaller islands and rocks to the south-west.

However, the tribunal has not apportioned fishing rights. It says that regardless of sovereignty, the "traditional fishing regime" in the area should remain, with "free access and enjoyment for the fishermen of both Eritrea and Yemen." A decision on maritime borders will be made later.

Both sides have said they accept the ruling and have 90 days to comply.

King Fahd of Saudi Arabi sent Yemen his congratulations and Crown Prince Abdullah phoned President Salih to praise "the spirit of wisdom and the peaceful approach adopted by the two neighbours".

This is a coded reference to Yemen's other - more important - border dispute, with the Saudis. Yemen wants to refer that to an international tribunal, too, but the Saudis reject arbitration, partly because they are seeking to amend parts of the border defined by the 1934 Treaty of Ta'if.

Meanwhile, as Yemen's economic problems continue, the World Bank has recommended cutting the number of government employees from 400,000 to 200,000 by the year 2003 in a move to reduce public sector spending.

Although the bank has allocated $25 million for projects to create alternative jobs, the move is likely to be problematic. Aside from its bureaucratic needs, Yemen requires a large civil service to keep down unemployment and, in some cases, maintain political stability through patronage. President Salih has already called for a freeze on new public sector appointments and promotions.

The government recently postponed another controversial move which would have cut the subsidy on diesel fuel. Currently diesel sells in Yemen for only 50% of the world price, but similar price rises last June caused riots. The increase, which was due in September but is not now expected before the end of the year, will particularly hit farmers, who depend on the fuel for agricultural vehicles and pumping water.