29 January 2011 Last updated at 07:26 ET

What next in Yemen?

By Ginny Hill Chatham House

With global news networks broadcasting wall-to-wall coverage of popular uprisings in Arab capitals, there is renewed focus on discontent in Yemen's mountain capital, Sanaa.

Yemen suffers from high population growth, unemployment running at 40%, rising food prices and acute levels of malnutrition.

Yemeni protesters are calling for a more responsive, inclusive government and improved economic conditions but - with oil production falling - the current economic trend is heading downwards.

Public demonstrations across the region are raising the stakes for change in Yemen.

Widespread complaints

President Ali Abdullah Saleh came to power in 1978, first as president of North Yemen and then, after unification with South Yemen in 1990, as leader of the newly united republic.

His ruling party, the General People's Congress, holds a large majority in parliament, representing a "big tent" coalition.

In addition, the president maintains an extensive informal patronage network of tribal leaders, businessmen and clerics.

At the beginning of January, President Saleh proposed a constitutional amendment that would allow him to stand for re-election in the next presidential ballot in two years' time.

However, events in Cairo and Tunisia make that move temporarily untenable and earlier this week, President Saleh made a statement in which he appeared to deny his intention to stand again in 2013.

(He made a similar promise to stand down before the 2006 presidential election, but eventually reversed this position.)

After 30 years in power, he faces widespread complaints of corruption and the concentration of power within his tribal sub-group, the Sanhan clan.

Large areas of the country are already in open revolt against his regime, with a breakaway movement in the south, attacks on the security services by Al-Qaeda in the Arabian Peninsula (AQAP) and a de-facto semi-autonomous area under the control of northern rebels.

Western aid

For years, Western governments have been pressuring President Saleh to initiate political and economic reforms to put the country on a more sustainable footing, but progress has been slow.

President Saleh appeared on television a few days ago, apologising for his mistakes - but his emergency announcement of price controls and salary hikes will only increase the underlying macro-economic pressures.

The Friends of Yemen - an informal contact group of Western and Arab donor countries - are due to meet in March to review aid spending, economic conditions and security assistance.

Western governments - worried about AQAP activity in Yemen and reluctant to deploy their own conventional military forces - are providing money and training to Yemen's elite security and intelligence units.

US special forces have helped to plan "track and kill" operations with the Yemeni military and the US has carried out several cruise missile strikes.

President Saleh's son, Ahmed Ali, and three nephews command these elite security and intelligence units.

The president denies he intends to hand power to his son, but many Yemenis still believe he favours an eventual transfer of power within his family.

Opposition empowered?

For months, Yemen's opposition parties have been locked in a fraught stand-off with the ruling party over preparations for the next round of parliamentary elections, scheduled for April this year.

Events in Tunisia and Cairo have empowered the opposition but their exact compromise points are still unclear and speculation is rife that the vote will have to be delayed.

The European Union is calling for the ruling party and the opposition to reach an agreement that will enable the ballot to take place.

Businessman Hamid al-Ahmar is an active figure within Yemen's main opposition party, Islah - a conservative, religious movement that calls for reform in accordance with Islamic principles.

Hamid's late father, Sheikh Abdullah, played a key role in foundation of the modern Yemeni republic.

Hamid's eldest brother, Sadek, is now head of Yemen's most powerful tribal power bloc, the Hashid confederation.

Yemenis will be watching with interest to see how Hamid al-Ahmar decides to respond to this week's peaceful street demonstrations, and whether President Saleh is ready to cut a power-sharing deal with the opposition coalition as a way of diffusing rising social and political tensions and establishing a more responsive system of government.

The progress of anti-government protests in Egypt is likely to play into both men's calculations.

Ginny Hill runs the Chatham House Yemen Forum