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N Yemen produces grain, fruits, vegetables, khat (a stimulant-containing shrub), cotton, coffee, and livestock but is dependent on imports for most of its essential needs. Terraced agriculture, dating from ancient times, is still practiced. S Yemen is one of the poorest areas of the Arabian peninsula. The climate is arid, and only a fraction of the land is arable. Pastoralism is prevalent in the south, and the greatest amount of industry is located in Aden. Manufacturing, including food processing and the production of cotton textiles, leather goods, cement, and aluminum products, has increased but provides little real revenue. The country produces and refines petroleum, and oil export revenues have boosted the economy since the late 1980s. Yemen's GDP is also supplemented by remittances from Yemenis working abroad and by large amounts of foreign aid. One of the principal reasons for Southern Yemen's merger with (Northern) Yemen in 1990 was the steady decline of its economy and the loss of Soviet political and economic support.
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