This analytical report reviews higher education in Yemen, specifically at Yemen's national university, the University of Sana'a. It finds that university enrollment has been increasing very rapidly from 17,000 students in 1987 to a projected enrollment of 79,000 students by 2000. This explosive growth has resulted in overcrowded classrooms, insufficient staff resources, deteriorating physical plant and equipment, inadequate educational materials and equipment, and a low level of absorption of graduates into the labor force. The report urges the government to develop policies which consider the country's medium- and long-term needs and result in strategies that will make higher education a more effective investment to serve the needs of the country and protect its resources. Following an introduction, which reviews the university's founding in 1970, the next three sections describe the university, detail the university's structure and organization, and review its development. The next section identifies issues related to low internal efficiency and quality and to external efficiency, as measured by employment surpluses and shortages. A brief section on policy and institutional measures is followed by a section suggesting goals and strategies in the areas of performance and quality, efficiency, equity, and resources. Annexes and appendices provide data tables and additional detail. (Contains 16 references.) (DB)