Economic

Yemen Review section August 15, 2023 18:57 MIN June and July 2023 Saudi Arabia Announces US$1.2 Billion in New Financial Support Long-waited financial support for the government finally materialized after it reached a dire fiscal situation in June and July. On August 1, Saudi Arabia announced it would support the internationally recognized government with a US$1.2 billion grant to finance the public budget and prop up the value of the Yemeni rial. Saudi Ambassador to Yemen Mohammed al-Jaber stated that the first batch of new funds would be released for use on August 2. The next day, the Central Bank of Yemen in Aden (CBY-Aden) announced that Saudi Arabia had deposited 1 billion Saudi Riyals (nearly US$267 million) into its account. High-ranking government officials, including the CBY governor Ahmed Ghaleb and the Minister of Finance Salem bin Breik, said that funds… Continue reading Main Publications August 4, 2023 19:23 MIN Two Birds With One Stone: Using Aid Transfers to Support Stable Commodity Prices in Yemen By Alex Harper, and Wadhah Al-Awlaqi During the conflict in Yemen, the government-run Central Bank of Yemen in Aden (CBY-Aden), and other government-aligned economic stakeholders have argued for a policy that would rationalize humanitarian and broader aid transfers to support the provision of foreign exchange (FX) to critical commodity importers. This could benefit the economy at large and specifically support the stabilization of food prices, a major driver of food insecurity. Such proposals have aimed to solve challenges resulting from the competing economic and monetary policies adopted by the parties to the conflict. However, the CBY-Aden is currently unable to effectively regulate Yemen’s financial institutions to utilize aid funds for import financing and currency stabilization. Aid actors have also been reluctant to engage with past such… Continue reading Analysis July 11, 2023 09:18 MIN The Presidential Council’s Year of Failure By Maysaa Shuja Al-Deen The May announcement by Aiderous al-Zubaidi, head of the Southern Transitional Council (STC), that two fellow members from the Presidential Leadership Council (PLC) will join the STC, was the final nail in the coffin for the council. The PLC’s eight-member body has been divided since its unnatural creation in April 2022, but this latest disruption to the delicate balance of power — three members now sharing STC interests — signals a rift the council cannot recover from. The relationship between the STC and PLC has devolved into an unchecked rivalry, as the former calls for an independent southern state in a direct challenge to the latter’s authority. In just over a year, Yemen’s top executive political body has become paralyzed… Continue reading News May 17, 2023 06:18 MIN Sana’a Center Briefs the Security Council for the Second Time By Yasmeen al-Eryani PRESS RELEASE – Wednesday, May 17, 2023 New York – Yasmeen al-Eryani, the Co-Executive Director for Knowledge Production at the Sana'a Center, briefed the UN Security Council today, focusing on the ongoing negotiations, transitional justice, women’s rights, economic insecurity, and ecological justice in Yemen. In her address, Al-Eryani said that the ongoing talks between Saudi Arabia and the Houthi movement are important, but the interests of the country and its people as a whole must be considered, emphasizing that all talks must be coordinated under the UN umbrella and engage local peace efforts. “Yemenis are fully capable of rebuilding their country and shaping its future," said Al-Eryani, but “there is a shared international responsibility to steer Yemen out of its… Continue reading Publications April 14, 2023 02:41 MIN March 2023 Back Yemen’s Private Sector to Promote Economy Recovery By Abdulwahab Alkebsi In light of ongoing negotiations between Saudi Arabia and the Houthi movement and reports of progress toward a permanent ceasefire, the need for a comprehensive and integrated approach to peace and reconstruction in Yemen is more urgent than ever. Any political solution must be paired with a robust economic strategy in order to tackle underlying economic and social issues, and prevent a surface-level fix to the conflict. Here, Yemen’s private sector can play a crucial role. The Center for International Private Enterprise (CIPE), a Washington-based organization where I serve as Managing Director for Programs, sees the Yemeni private sector as a key driver of economic growth, poverty reduction, and the promotion of social stability in a post-conflict Yemen. The need… Continue reading Publications April 14, 2023 15:46 MIN March 2023 Qat in Wartime: Yemen’s Resilient National Habit By Laura Kasinof Early one summer morning, Mohammed stood among his grove of qat trees in a village south of the capital Sana’a in Sanhan district. Two local men, who work as Mohammed’s mubazigheen (pickers), were busy harvesting qat, plucking leaves, and placing them in plastic shopping bags. Every so often, Mohammed would step in to help, hiking up his crisp white thobe to reach the highest branches. The war has made Mohammed’s small qat farm, around 2,640 square meters (.65 acres), less profitable than it once had been. The 45-year-old said he makes around US$33 a day from qat in the summer, when the harvest is plentiful due to the rainy season. But this figure does not include his expenses, and Mohammed… Continue reading Yemen Review section April 14, 2023 12:24 MIN March 2023 Saudi-Houthi Talks Move Forward After weeks of little movement, the bilateral Saudi-Houthi talks appear to be headed toward agreement on a comprehensive ceasefire, though resolution of longstanding issues remains elusive. At month’s end, Saudi Arabia organized a meeting in Riyadh, framed officially as Presidential Leadership Council (PLC) President Rashad Al-Alimi summoning the leading figures of his government. After the Saudis met individually with each PLC member to discuss the recent talks in Oman, they reportedly agreed in principle to an initiative presented by Saudi Ambassador Mohammed al-Jaber. The proposal to the Houthis described a three-stage process for PLC-Houthi talks, to take place over two years. During the first six months, confidence-building measures would be taken, including the payment of salaries to civil servants to… Continue reading Yemen Review section March 10, 2023 05:07 MIN January-February 2023 Book Review – Yemen: Poverty and Conflict By Ned Whalley Yemen: Poverty and Conflict, by Helen Lackner, Routledge, 2022, 184 pp., $48.95 (paperback), ISBN 9780367180508, $170.00 (hardcover), ISBN 9780367180492. An explosion of writing accompanies a war. Conflict journalism typically focuses on immediate outcomes of the fighting, humanitarian publications highlight the terrible human cost, and political and diplomatic observers proffer opinions on various strategic implications. But there is often a temporal gap in English-language literature between descriptions of contemporary violence and the most recent available histories of the belligerents. This is perhaps unavoidable. Comprehensive histories take time to research. Government archives and accurate data, and the trends that can be ascertained from them, are not available right away. Any modern history concludes the day the author finishes writing. They cannot know… Continue reading Yemen Review section March 9, 2023 08:11 MIN January-February 2023 Govt Receives New Financial Support By Wadhah Al-Awlaqi On February 21, Saudi Arabia agreed to supply the Central Bank of Yemen (CBY) in Aden with a US$1 billion deposit to prop up Yemen’s faltering economy and support the value of the rial in government-held areas. The aid will not be deposited directly with the CBY-Aden, but rather handled through the Arab Monetary Fund (AMF) as part of the AMF agreement announced in November. Access to the new money is expected to be granted soon given the progress the government has made to implement reforms demanded by Saudi Arabia, but the inflexible structure of the support could limit the central bank’s capacity to auction foreign currency to stabilize the rial and finance the import of basic commodities. The timing… Continue reading Analysis March 2, 2023 19:29 MIN Bridging the Divide: Mitigating the Impacts of the CBY Schism on Yemen’s Banking Sector By Wadhah Al-Awlaqi The September 2016 rupture of the Central Bank of Yemen (CBY) into rival branches associated with the main warring parties has severely undermined the country’s banking sector. The most fundamental issues affecting Yemeni banks are the differing currency systems that have emerged between areas controlled by the internationally recognized government and Houthi authorities, and the associated competing centers of financial sector regulation, which have adopted increasingly coercive measures in their attempts to assert exclusive authority. The banking sector liquidity crisis, which emerged prior to the central bank schism, has only been compounded and complicated since. This policy brief was produced as part of the Yemen International Forum (YIF) 2022 and will offer an overview of the evolving challenges facing the… Continue reading Analysis February 28, 2023 34:17 MIN Leadership from Iran: How Al-Qaeda in Yemen Fell Under the Sway of Saif al-Adel By Hussam Radman, and Assim al-Sabri When Al-Qaeda leader Ayman al-Zawahiri was killed by a US drone strike in Afghanistan last July it had only limited impact for the group’s Middle East branches in North Africa, Yemen, and Somalia. This was in part a result of the internal cohesion created by organizational policies introduced since 2011 that gave regional branches significant autonomy. But it also spoke to Al-Zawahiri’s reduced importance as a leader in recent years as he took on more of a symbolic role as the successor to Osama bin Laden who had obtained the allegiance of Al-Qaeda’s central Shura council. One of the key reasons why leadership on all the key fronts – security, organizational, and financial – shifted away from Al-Zawahiri was the… Continue reading The Yemen Review February 20, 2023 27:56 MIN Yemen Annual Review 2022 By Sana’a Center Staff The past year has been one of extreme consequence for Yemen. The war has entered a new phase of low-level violence and economic warfare. Casualties are down since a truce was signed in April, and have remained relatively low even after its acrimonious expiration in October. The internationally recognized government has sworn in a new executive body, but it has been unable to bridge internal rifts or reverse the territorial and economic decline of recent years. The United Arab Emirates has fully re-engaged in Yemen through a variety of proxy groups, most importantly the secessionist Southern Transitional Council (STC), which holds sway across much of southern Yemen. Saudi Arabia is pursuing talks of its own with the Houthis, though its… Continue reading