Amid the bloodletting in war-torn Yemen, the Arab world's poorest state is facing a rapidly mounting humanitarian crisis from hunger, poverty and dwindling resources, aid officials warn.

Oil production is slumping and even the water's running out. At current rates, Sanaa, the country's ancient capital with a population of 2 million, looks like being dry by 2025, the first metropolis in the world to run out of water.

By all accounts, Yemen is facing economic collapse, a crisis that is probably more dangerous that al-Qaida's growing power or the escalating secret war against the jihadists being waged by U.S. President Barack Obama and could act in al-Qaida's favor.

"Unless urgent humanitarian action is taken, Yemen will be plunged into a hunger crisis of catastrophic proportions," declared Jerry Farrell, Save the Children's country director for Yemen.

Much of the problem can be laid at the door of longtime President Ali Abdullah Saleh, whose 33-year rule was notorious for its culture of corruption and inept governance.

He failed to build infrastructures that would have averted the coming calamity and it was possibly for this as much as his repression of Yemen's 23 million people that the country now faces a humanitarian crisis.

Saleh, backed by the Americans for years, was forced to step down in February as Yemen was wracked by a pro-democracy revolution.

That made him the fourth Arab dictator brought down by the so-called Arab Spring in a year.

Saleh's successor, his former deputy Abdu Rabbo Mansour Hadi, is focused on trying to crush al-Qaida's growing strength in southern Yemen.

But aid workers and analysts say the greater danger to the country probably lies in the emerging economic and social crisis and Hadi may not be up to the task.

Yemen's oil reserves, pegged at 4 billion barrels in the 1990s, a meager total by Middle East standards, are dwindling rapidly.

That's critical because 75 percent of state revenue and 90 percent of exports come from oil.

Dominic Moran, the Arab World Project Coordinator for Greenpeace, says it's possible to trace a link between the growing intensity of the current conflict in southern Yemen and the crippling drought of 2008-09.

The U.S. National Intelligence Council noted in a report a few weeks ago that "water problems -- when combined with poverty, social tensions, environmental degradation, ineffectual leadership and weak political institutions -- contribute to social disruptions that can result in state failure."

Mark Janssen of the Federation of American Scientists observed: "This is particularly true in Yemen, which, perhaps more than any other state, sits at the nexus of water and national security …

"Water insecurity may indeed adversely affect U.S. national security in the future, but certain U.S. national security operations can also contribute to water insecurity today."

Growing water scarcity, with highland aquifers shrinking by 10-20 feet a year, is threatening agriculture in Yemen whose population, the World Bank says, is exploding at an estimated 8 percent a year.

The water problem, obscured by the fighting and al-Qaida's rise, is worsened because Yemenis use 40 percent of their available water to grow qat, a mildly narcotic plant that's the country's largest cash crop and highly prized across the Arabian Peninsula.

That's far more than they allocate to grow food.

"It's no coincidence that these areas are now outside government control," the Middle East Research and Information Project observed.

A report by the U.S. firm McKinsey and Company for the Sanaa government said that worsening water shortages could cost Yemen 750,000 jobs and slash incomes by as much as 25 percent over the next decade.

Water shortages are already causing a major demographic shift from the countryside to the cities, heightening the social crisis.

Unlike the oil-rich Gulf states, Yemen cannot afford expensive desalination plants to overcome its water shortage.

The World Food Program says one-fifth of the population, around 5 million people, is in need of emergency food aid.

The United Nations has warned that 500,000 children may die in 2012 from malnutrition or famine, with around 750,000 children under five malnourished.

Rising food and fuel prices, drought, the global economic meltdown, political instability and years of bloodletting all contributed to the crisis.

"For years the deteriorating crisis has been ignored," lamented Joy Singhal of Oxfam's team in Yemen. "Now the country's at breaking point."