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Yemen matters, and sadly for mostly the wrong reasons.

With power slipping slowly away from President Ali Abdullah Saleh and armed clashes killing dozens of people since Monday, there are fears the country could disintegrate into a series of inter-tribal conflicts with repercussions throughout the region.

Yemen is already home to al-Qaeda in the Arabian Peninsula (AQAP), a small but dangerous group that tried to blow up a US airliner over Detroit and which sent bombs on cargo planes bound for the US last year.

Until this spring, AQAP had been coming under mounting pressure from the government's counter-terrorism forces, backed and trained by the US and Britain, and air strikes by US unmanned aerial drones.

But with President Saleh having to battle for his own survival, the pressure is partly off al-Qaeda, which has been re-arming itself in the chaos.

Yemen's Gulf neighbours, the six Arab Gulf states that make up the Gulf Co-operation Council (GCC), are deeply worried by the deteriorating crisis.

They fear the country's weak economy could collapse altogether which, coupled with an upsurge in fighting, could trigger a wave of refugees across the borders into Saudi Arabia and Oman.

The GCC, encouraged by Britain and the US, has made repeated attempts to get President Saleh to sign a handover deal that would see him step down in exchange for immunity from prosecution by the unity government that succeeds him. So far he has refused.

Yemen is beset with problems that go far beyond the leadership crisis or al-Qaeda.

The poorest country in the Arab world, its oil reserves are shrinking, and so is the capital's water table, prompting fears it could be the first world capital to run out of water.

Southern Yemen, which tried unsuccessfully to break away from the more powerful north in 1994, has an active separatist movement.

A long-running Shia insurrection in the far north has dragged in Saudi forces and, according to Yemen, has also led to meddling by Iran.

Unemployment is high, there are too many guns in private hands, and much of the adult population wastes precious income and most of their afternoons chewing the narcotic qat leaf. On top of this, Yemen is finding itself supporting thousands of Somali refugees.

International sympathy and attention focused briefly on Yemen during the London conference of January 2010, but much of the promised billions of dollars in aid has yet to reach the people who need it most.

The Arab world and the West would like to see a broad-based unity government take over followed by a reinvigoration of the economy, but there does not appear to be a Plan B for President Saleh refusing to hand over power.