Members of the Houthi militia patrol streets near the Yemen’s presidential palace in San’a on Jan. 20, 2015
STR/European Pressphoto Agency

When I first went to Yemen, two decades ago, it struck me as the one place on earth closest to understanding life on another planet. Everything seemed so different, from the architecture to the rough unsettled terrain. It was as culturally beguiling as it was politically troubled.

The outside world often views Yemen from the vantage of terrorism. It has been the unwilling base for Al Qaeda in the Arabian Peninsula since Saudi Arabia’s crackdown forced it out of the kingdom a decade ago. AQAP has become the biggest and boldest al Qaeda franchise since Osama bin Laden’s death. It was invoked by the Kouachi brothers during the Charlie Hebdo attacks in Paris two weeks ago.

A lot of bad boys have ties to Yemen. The bin Laden family was of Yemeni descent. Among those who still live there is Saudi-born Ibrahim al Asiri, a master bomb-maker linked to the plot to blow up a Northwest Airlines flight from Amsterdam to Detroit on Christmas Day 2009. Yemen was the home of American-born Anwar al Awlaki, the AQAP ideologue, until a U.S. drone strike killed him in 2011.

The U.S. has launched more than 115drone strikes against extremists in Yemen since 2002. Many have been killed. Many more still exploit Yemen’s chaos.

But Yemen, which is four times the size of Alabama, is important for other reasons that should be just as important to the outside world. It shouldn’t be written off or seen through a single prism.

Yemen was one of four countries where peaceful demonstrations ousted autocratic leaders in 2011 and 2012. Although the media focuses on the infamous in Yemen, its uprising also produced Nobel Peace Prize winner Tawakol Karman, a young dissident, blogger and mother of three, and hundreds of thousands of others who braved danger and death in their strike at the University Square protest camp.

They had plenty of political grievances. Surrounded by oil-rich sheikhdoms, Yemenis have always also had the hardest economic slog. They live in the poorest of the 22 Arab countries–and don’t have massive oil exports to exploit. Per capita income is less than $200 a month. At least 45% of the 26 million people live below the poverty line.

Life is particularly tough for the young generation that led the uprising. The median age is 18–and unemployment among youth is as high at 40%. Yemenis also have the lowest literacy rate.

Like Libya, Yemen has imploded politically since the uprising against President Ali Abdullah Saleh, the strongman who ruled for 23 years. (He also led North Yemen for another dozen years before the two halves of the country united in 1990).

His successor, President Abdu Rabbu Mansour Hadi, has been unable to enforce the consensus on a new power-sharing formula that emerged from the U.N.-backed National Dialogue in 2013-14. It calls for Yemen to create a federal system with six regions. But Mr. Hadi’s power has eroded since Houthi rebels of Asarallah, or “Partisans of God,” seized part of the capital, San’a, last September.

Yemen is now riven by many fissures: The old north-south divide still defines politics, with a secessionist movement growing ever louder. Strife among diverse tribes, clans and sects have destabilized large chunks of the country. Mr. Saleh’s loyalists and allies in the Republican Guards have maneuvered on behalf of the former president, perhaps hoping for a comeback of sorts.

On Tuesday, less than a day after negotiations between the government and Houthis over a ceasefire and power-sharing deal broke down, Houthi rebels took over the presidential palace and the headquarters of the country’s presidential guard.

Yemen remains in peril. The government is too fragile to be viable, despite support from the U.S. and Gulf monarchies. Key countries began evaluating Monday whether to withdraw diplomats and their nationals in Yemen.

If the outside world doesn’t come back to vigorously help stem the tide, Yemen may formally crumble into a failed state, with militias seizing more power and full scale war erupting among rival powers on multiple fronts.

The dangers then widen for both Yemenis and the world. Without viable political order, loyal security forces, or rule of law, Yemen could become another Afghanistan—a failed state dominated by warlords and extremists, and with even fewer prospects for the young revolutionaries who just three years ago thought their nightmare had ended.

Today the President resigned!

Robin Wright is a joint fellow at the U.S. Institute of Peace and the Woodrow Wilson International Center for Scholars. She is on Twitter: @wrightr