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The Yemen Review – October 2018

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Executive Summary:

In October, the United Nations warned that Yemen could become the worst famine the world has seen in a century, with some 14 million people – half the population – facing starvation. This crisis is primarily due to the collapsing value of the Yemeni rial: Yemen is overwhelmingly dependent on imports to feed itself and the rial’s depreciation has thus made foodstuffs vastly more expensive.

The murder of Saudi journalist and Washington Post columnist Jamal Khashoggi at the Saudi consulate in Istanbul grabbed world headlines throughout the month. This in turn focused world attention on Riyadh’s role in the Yemen war, led the United States and the United Kingdom to call for a ceasefire, and prompted many Western governments to reconsider weapons sales to Saudi Arabia.

Following a build-up of anti-Houthi forces towards the end of October on the outskirts of the Houthi-held Red Sea city of Hudaydah – a crucial entry point of commercial and humanitarian goods for Yemen’s largest population centers – the battle for the city reignited in earnest at the beginning of November.

Yemeni President Abdo Rabbu Mansour Hadi fired Prime Minister Ahmed bin Dagher on October 15 and launched an investigation against him for corruption and negligence. Bin Dagher had held the post since the spring of 2016 and was replaced by Maeen Abdelmalek Saeed, who was until then the Minister of Public Works and Roads.

A report from Buzzfeed News documented how the United Arab Emirates had paid US mercenaries to assassinate its political opponents in Yemen, primarily individuals associated with the Islah party in the southern Yemeni city of Aden.

The internationally recognized Yemeni government’s Economic Committee implemented new fuel import regulations, which would disqualify many Houthi-affiliated traders from importing fuel. The Houthi authorities in Sana’a subsequently threatened the senior staff of Yemen’s commercial banks – almost all of which are headquartered in Sana’a – with imprisonment if they complied with the Economic Committee’s decrees. These developments – along with the Houthi authorities appointing new senior staff to the Sana’a-based branch of the central bank – have likely escalated the war’s economic and financial ramifications for the Yemeni population.

Cyclone Luban made landfall in Yemen’s eastern Mahra governorate (picture above), with the UN estimating that 2,200 families were displaced by the storm.

Meanwhile, the Islah party continued to consolidate political and military control in Taiz City, a development that began in August and one that threatens to complicate future conflict resolution efforts.

The Sana’a Center Editorial

Islah’s Political and Military Ascent in Taiz

Since August 2018, the Yemeni Congregation for Reform, otherwise known as the Islah party, has taken major steps towards consolidating political and military power in Taiz City. Islah officially supports the internationally-recognized Yemeni government of President Abdo Rabbu Mansour Hadi; however, the party’s increasing capacity to act independently in Taiz represents a further erosion of the state’s purview within areas the government supposedly controls. Islah’s rise in Taiz, if solidified, is likely to complicate United Nations-led efforts to secure a peace agreement between the Houthi leadership and the internationally-recognized Yemeni government. It also threatens potential post-conflict efforts to stabilize the country’s political and security environments and establish effective state sovereignty.

With the escalation of the ongoing conflict in March 2015, Taiz City and the wider governorate have been an epicenter of violence, with Houthi fighters continually clashing with various anti-Houthi forces. Within the anti-Houthi coalition in Taiz City, Islah-affiliated forces and the Salafi-oriented Abu al-Abbas Brigades have also had long-running tensions and periodic clashes. Among the former’s most prominent backers are Yemeni Vice President Ali Mohsen al-Ahmar and President Hadi’s chief of staff Abdulla al-Alimi; while the Abu al-Abbas Brigades are supported by the United Arab Emirates (UAE).

On August 8, 2018, intense clashes between Islah-affiliated groups and the Abu al-Abbas Brigades erupted, prompting President Hadi to hold an emergency meeting with Governor of Taiz Amin Mahmoud. Following this, Hadi announced the creation of a presidential committee to end the violence. The presidential committee, however, was dominated by Islah figures. Most prominent among these, and the committee chair is Abdu Farhan Salem, commonly referred to as “Salem.” He is arguably the most important Islah-affiliated military official in Taiz, as an advisor to the commander of the Taiz Military Axis, Khaled Fadl – also an Islah figure.

The presidential committee brokered a deal in which both the Abu al-Abbas Brigades and Islah-affiliated national army units and militias agreed to withdraw from positions within Taiz City. On August 18, the committee reported that all positions had been handed over to the Presidential Guard. However, by month’s end it was clear that while Abu al-Abbas’ forces had withdrawn, Islah-affiliated forces remained.

In September, Governor Mahmoud publicly thanked the presidential committee for its efforts before asking that it be dissolved, having seemingly fulfilled its mandate. The committee refused, insisting that, having been established through a presidential decree, another presidential decree was required for it to be dissolved. To date, President Hadi has not issued such a decree.

In the meantime, Islah affiliates have leveraged the committee’s apparent authority to assert control over the official security apparatuses in Taiz that had technically been under the governor’s jurisdiction. Within these institutions, Islah has dismissed officials considered unloyal to it while promoting Islah affiliates. The committee has also facilitated the withdrawal of other anti-Houthi forces from areas around Taiz, in place of whom Islah-affiliated forces have moved in. Aiding Islah’s expanding clout in Taiz are the group’s strong grassroots support, local business ties, and loyalists in senior military positions. Currently, the largest anti-Houthi force unaffiliated with Islah still present in Taiz City is the Yemeni army’s 35th Armoured Brigade, which has worked closely with the Abu al-Abbas Brigades and is backed by the UAE.

Islah’s rapid ascent is allowing it, a non-state actor, to increasingly consolidate its authority in Taiz and be able to assert its own control independently from the internationally-recognized Yemeni government. Meanwhile, it also appears that Islah is coordinating efforts to have the current governor replaced with someone more amenable to the party.

The creation of another statelette within Yemen, however, is not inevitable. There are practical steps that local, regional and international stakeholders can take to head off this potential scenario. First, President Hadi must issue a decree officially disbanding the presidential committee. Second, he can order the removal of officers from Taiz’ military and security apparatuses who were appointed based on their political affiliations. Third, he can institute measures to increase the professional standards within, and decrease the ideological character of, the security forces in Taiz.

President Hadi should also help support the current governor’s legitimacy through greater financial support and ensuring that all civil servants in Taiz receive their salaries on a regular basis. While the consistency of public sector salary payments has improved relative to 2017, still not all civil servants are regularly receiving their salaries.

Saudi Arabia is the best-placed actor to compel Islah to follow the Yemeni government’s lead. This is due to the longstanding relationship between Saudi decision-makers and Islah, and the fact that many Islah leaders reside in or regularly travel to Riyadh.

UN Special Envoy for Yemen Martin Griffiths should be particularly interested in recent developments in Taiz, given how the governorate represents another power center where non-state actors are competing for influence. Ignoring Taiz could complicate his conflict mediation efforts between the main warring parties. He has recourse: Griffiths’ staff can communicate clearly with senior Islah figures, and other parties, that if their members are noncompliant and act as peace spoilers, their leadership will be placed on the UN 2140 Sanctions List.

General conflict de-escalation efforts in Taiz should also focus on opening the Sana’a Road. This thoroughfare is a key access route through the al-Hawban area, located northeast of Taiz city, and is currently a frontline between Yemeni government and Houthi forces. It connects Taiz with the cities of Ibb and Sana’a and opening it would dramatically reduce the time and expense it currently takes to transport people and goods to and from Taiz. An open Sana’a Road would thus increase humanitarian access to the population and reduce the cost of commercial goods.

Houthi forces are facing considerable pressure along various frontline areas around Taiz City, including: Haifan (east of Taiz City); al-Burj and al-Kadha (west of the city); al-Salal hill (to the northeast) and al-Qabbaytah and Karish (on Taiz’s southeastern border with Lahj governorate). Mediation efforts could thus involve de-escalation efforts along these frontlines in exchange for a ceasefire in al-Hawban and the reopening of Sana’a Road. Such would represent a major step towards ending the Houthi siege on government-held areas of Taiz City, and dramatically improve the dire situation facing the civilian population.

Demonstrations against the economic situation in the country and the collapsing value of the Yemeni rial erupted in Taiz on October 2, with protesters rallying under the slogan “The Revolution of the Hungry.”

International Developments

Khashoggi Murder Focuses World Attention on Saudi Campaign in Yemen

On October 2, Saudi journalist and Washington Post columnist Jamal Khashoggi entered the Saudi consulate in Istanbul, apparently seeking documents related to his upcoming marriage. He was not seen alive again in public. While Saudi authorities initially claimed he had left the consulate later that day, Turkish officials soon asserted that Khashoggi had been killed by a 15-man hit squad that had flown in by private jet from Saudi Arabia. This group apparently included individuals who were part of the personal security entourage of Crown Prince Mohammed bin Salman.

Turkish authorities released video surveillance footage showing Khashoggi entering the consulate and members of the hit squad landing in Istanbul and also entering the consulate. This led to intensifying international pressure on Riyadh to explain the journalist’s disappearance. After putting forth various narratives throughout October trying to explain the event, by month’s end Riyadh had admitted that Khashoggi was killed at its consulate in a “premeditated” manner. Saudi officials further stated that they would hold accountable those responsible and arrested 18 people. Istanbul’s chief prosecutor stated at the end of October that Khashoggi had been killed and dismembered shortly after he had entered the Saudi consulate.

US, UK Call for a Ceasefire in Yemen

In separate statements made on October 30, Secretary of Defense Jim Mattis and Secretary of State Mike Pompeo called for a ceasefire in Yemen within 30 days and urged all parties to participate in UN-brokered peace talks to bring an end to the conflict. In his strongest words yet on the subject, Pompeo said that the Houthis must cease long range drone and missile attacks on Saudi Arabia and the United Arab Emirates (UAE), after which the Saudi-led military coalition must halt airstrikes in populated areas. Mattis said that peace talks based on a ceasefire, a Houthi pullback from the Saudi border and the cessation of airstrikes should begin “within 30 days.”

While Mattis said that the two should not be considered as connected in terms of policy, the death of journalist Khashoggi at the Saudi consulate in Istanbul dramatically raised the profile of Yemen’s war in the US throughout October and prompted renewed calls for the US to reconsider its support for the Saudi-led military coalition. US officials, speaking off the record, said that Khashoggi’s death had altered the cost-benefit analysis in US-Saudi relations, with the Trump administration having “reached the maximum weight of what they’re willing to bear.”

On October 31, United Kingdom foreign secretary Jeremy Hunt reiterated the call for a ceasefire within a month. The same day, UN Special Envoy for Yemen Martin Griffiths said he was “committed to bring the Yemeni parties to the negotiations table within a month.” The following week, however, he retracted this commitment and said instead that he was aiming to bring the warring parties back to the table by the end of 2018.

US Legislators Call for Restrictions on Arms Sales to Riyadh

After the Senate Foreign Relations Committee triggered an investigation on October 10 into Khashoggi’s disappearance, Sen. Rand Paul (R-KY) introduced a bill that would cut off military aid to Saudi Arabia until the journalist was found “alive and free.” A group of bipartisan lawmakers then filed another, broader bill that, in addition to prohibiting arms sales, would also end any “security assistance” to Saudi Arabia, including intelligence and training support.

On October 19, Congressmen Ted Lieu (D-CA) and Jim McGovern (D-MA) introduced separate legislation that would increase congressional oversight of all US arms sales. The Arms Sale Oversight Act would allow any House member to force a debate on the floor in the event that the House Foreign Affairs Committee does not debate a weapons deal. In a tweet, Lieu specified exports to Saudi Arabia as in need of greater scrutiny – oversight that the congressman had been advocating for some time.

In response, President Donald Trump told reporters on October 20 that it would not be “helpful” to cancel arms exports to Saudi Arabia. He cited jobs and revenues tied up in US$110 billion worth of military contracts as part of wider bilateral agreements worth US$450 billion. This claim drew wide media attention, with Vox, Politifact, The Hill, and CNN, amongst others, disputing the figures and challenging Trump’s argument to continue arms sales based on domestic economic interest. Behind the scenes efforts to save existing deals took place in the wake of the Khashoggi affair, with the Aerospace Industry Association urging leading defence contractors to lobby government figures, and provide talking points when dealing with the media.

Also in the US, on October 8, Sens. Elizabeth Warren (D-MA) and Ro Khanna (D-CA) wrote a letter to Secretary of State Mike Pompeo challenging his September certification that the Saudi-led military coalition was taking measures to reduce civilian casualties in its operations in Yemen. An amendment to a defence spending bill passed in August made continued US support for the coalition conditional upon Pompeo’s certification (for details see The Yemen Review – September 2018). The senators said that the UAE and Saudi Arabia had failed to implement US recommendations and that statistics on civilian deaths from coalition airstrikes demonstrated that sufficient action had not been taken. They added that Pompeo’s certification memorandum indicated that the coalition had, at times, violated US laws regulating arms sales.

Western Nations Reconsider Arms Sales to Saudi Arabia

Numerous heads of state and legislators from Western countries responded to Khashoggi’s killing last month. On October 21, German Chancellor Angela Merkel said that Germany would no longer approve arms sales to Saudi Arabia as long as investigations on the case were ongoing. According to spokesman Steffen Seibert, the German government had not yet decided how to deal with arms sales that had already been approved prior to Merkel’s announcement. A day later on the public television broadcaster ZDF, German Economy Minister Peter Altmaier demanded a common European stance towards Saudi Arabia, noting that sanctions would only be effective if jointly implemented. To note, in its coalition agreement of March 2018, the new German government had agreed to no longer approve arms sales to states participating in the Yemen conflict. Nevertheless, FAZ reported on October 1 that, since taking office in March, the new German government had approved arms exports worth €254 million and €21.8 million to Saudi Arabia and other members of the Saudi-led military coalition, respectively.

Austria, currently holding the presidency of the Council of the European Union, reiterated the German call, with Austrian Foreign Minister Karin Kneissl, talking to the German Die Welt newspaper on October 26, demanding that the EU jointly halt arms sales to Saudi Arabia. Kneissl said that “the terrible war in Yemen” in particular should induce such common measures.

Other European and Western states, however, were more tentative in their responses. On October 21, the foreign ministers of France, the UK and Berlin released a joint statement in which they demanded further investigation into the case and accountability for the perpetrators of any crime committed.

On October 25, the Élysée Palace said that French President Emmanuel Macron had, in a telephone call the day before with Saudi King Salman bin Abdulaziz, demanded a full investigation into Khashoggi’s death. Macron added that in cooperation with its partners, France would not hesitate to impose sanctions against those found responsible for the killing – a position later reiterated by Minister for Foreign Affairs Jean-Yves Le Drian. On October 26, President Macron called the step to halt arms sales to Saudi Arabia “pure demagogy,” saying that while he understood “the link to Yemen,” there was none between arms sales and the Khashoggi affair. He added that he supported a common European reaction, such as sanctions, “once the facts [have been] established.”

While taking a stronger stance in condemning the killing of Khashoggi, a European Parliament resolution of October 25 largely stayed in line with the French position in calling upon the EU and its member states to “stand ready to impose targeted sanctions […] once the facts have been established.” According to the text, sanctions such as visa bans and asset freezes should be directed against the perpetrators as well as “the masterminds and inciters of this crime.” The resolution also called for an independent international investigation into the case and that EU member states propose to the Human Rights Council in early November that a Special Rapporteur be appointed to investigate human rights in Saudi Arabia.

On October 23, the Spanish parliament voted against a motion that called for a halt in arms sales to Saudi Arabia, following controversial statements and debates on the subject in Spain the preceding month (for more see ‘The Yemen Review – September 2018’).

On October 22, Canada’s opposition left-wing New Democratic Party demanded in parliament that the country end arms exports to Saudi Arabia in light of the kingdom’s military engagement in Yemen and the Khashoggi killing. The next day, Prime Minister Justin Trudeau warned that it would be difficult and costly to cancel a 2014 arms deal with Saudi Arabia, due to the terms of the contract, which is worth up to US$13 billion. On October 25, the prime minister then said the government was reviewing existing export permits of arms deliveries to Saudi Arabia, referring to the Khashoggi killing.

Meanwhile, Arab countries generally expressed support and solidarity with Saudi Arabia, with the exception of Qatar, which called the affair a “wake-up call for everyone.” Yemeni President Abdo Rabbu Mansour Hadi said the “cheap political and media targeting of Saudi Arabia will not deter it from continuing its leading role in the Arab and Islamic worlds.” Meanwhile in Sana’a, Mahdi al-Mashat, president of the Houthi’s Supreme Political Council, defended Saudi Arabia against US threats of sanctions over the journalists’ death, condemning what he called a “humiliating approach” by President Donald Trump.

European Parliament Calls For a Comprehensive EU Strategy on Yemen

On October 4, the European Parliament voted in favor of a resolution calling for an immediate cessation of hostilities in Yemen and the resumption of peace talks led by the UN Special Envoy. The resolution supports confidence-building measures such as the complete reopening of Sana’a International Airport and the payment of civil servants’ salaries in all areas of Yemen. In light of the divergent policies of different EU member states, it calls on the EU’s foreign policy chief Federica Mogherini to develop a comprehensive EU strategy for Yemen.

The resolution repeats a previous call to impose an arms embargo on Saudi Arabia and urges EU member states to refrain from selling military equipment to coalition members. It says that such arms transfers are in violation of common EU rules. The text calls for the belligerent parties to be held accountable for their actions, and for the US to judicially oversee their use of military drones in Yemen.

Other International Developments in Brief:

  • October 1: The US announced that it had completed a two-week training of Yemeni Border Guard troops in Riyadh, in a program aimed at countering weapons and weapons-related smuggling. In August, US defense representatives met with Yemen’s Vice President Ali Mohsen al-Ahmar to discuss increasing cooperation and training of counterterrorism forces.
  • October 16: The Élysée Palace announced that the French sailor, Alain Goma, who had been detained by the armed Houthi movement since early June, had been released. It stated that French President Macron thanked the Omani and Saudi authorities for their help in liberating the French citizen, without disclosing any details on how he was freed. According to his family quoted by Le Monde, Alain Goma was flown to Oman.
  • October 17: South Korea’s Justice Ministry denied refugee status to 339 Yemeni asylum seekers, granting them one-year renewable humanitarian permits instead. The ministry rejected 34 others based on criminal charges and postponed the decision on 85 others. More than 500 Yemenis have, via Malaysia, arrived on the South Korean resort island Jeju this year, given its visa-free policy. This policy was, however, recently dropped for Yemenis following anti-refugee protests in South Korea. While the majority of these Yemenis have applied for refugee status, no requests have been granted. Most remain on Jeju island, as they are prohibited from travelling to the South Korean mainland.
  • October 19: US Senator Elizabeth Warren (D-MA) wrote a letter to Attorney General Jeff Sessions, requesting an investigation into claims that the UAE had paid US nationals to assassinate political figures in Yemen (see below ‘UAE Paid US Mercenaries to Assassinate Political Opponents in Yemen’).
  • October 26: The Swedish mission to the UN Security Council (UNSC) hosted a closed breakfast meeting with representatives from the German mission to the UN, UN Women, and the Yemeni Women’s Pact for Peace and Security. Discussions revolved around how Germany, an incoming UNSC member state for 2019, could continue supporting women’s participation in Yemen’s political process at the council when Sweden’s term ends this year.
  • October 26: Sultan Qaboos of Oman received Israeli Prime Minister Benjamin Netanyahu at his palace in Muscat, in a diplomatic visit that likely signals a turning point in relations between Israel and countries in the wider Middle East.
  • October 30: The Elders, a group comprised of high-profile world figures advocating for peace and human rights, released a statement calling on the UNSC – with emphasis on the United Kingdom, the United States and France, as the three major powers backing the Saudi-led military coalition forces – to take urgent action to bring an end to the blockade of Yemen and avert a humanitarian catastrophe.

In Yemen

Military and Security Developments

Anti-Houthi Forces Launch New Offensive on Hudaydah

On November 2, Yemen’s armed forces announced the launch of a new “large-scale offensive” in the Red Sea port city of Hudaydah. Pro-government media reported on November 4 that government forces had taken the eastern, western and southern entrances to the city, gaining full control of the Kilo 16 that links Hudaydah to the Houthi-held capital Sana’a.

Brig. Gen. Abdulrahman Saleh al-Mahrami, one of the top commanders of the UAE-backed Giants Brigades, reported that his forces had reached the town of al-Saleh, 3 kilometers from Hudaydah port and in the vicinity of the Red Sea Mills, home to some of the country’s largest grain-storage silos. Houthi military spokesman Brig. Yahia Sarei denied the reports, calling them a “tactic of misinformation.” Sarei claimed Houthi rockets and artillery fire had destroyed much of their opponent’s military hardware, while Houthi minefields had caused enemy troop casualties. Houthi media reported that more than 50 coalition airstrikes had hit the Kilo 16 area, east of Hudaydah, and Hudaydah airport on November 3.

UAE-backed anti-Houthi forces supported by coalition air power launched an offensive on the strategic port city in June. Frontlines had remained largely static during October, with fighting centered on areas in the south of the governorate. On October 30, Yemeni military officials said 10,000 new troops were due to arrive in Hudaydah ahead of a fresh drive to take the port.

Report Claims UAE Paid US Mercenaries to Assassinate Political Opponents in Yemen

On October 16, Buzzfeed News reported that the UAE had hired former US special forces personnel to assassinate political figures and clerics associated with the Islah party in southern Yemen. The UAE regards Islah as the Yemeni branch of the international Muslim Brotherhood movement, which Abu Dhabi considers a terrorist organization.

Hungarian-Israeli security contractor Abraham Golan, founder of Delaware-based Spear Operations Group, said the UAE had flown his team to Aden and paid them US$1.5 million per month – plus bonuses for successful kills – to assassinate figures whom Emirati officials designated as targets. He said this campaign was “sanctioned by the UAE within the coalition” and Buzzfeed quoted several unidentified sources saying members of the assassination team were given ranks in the Emirati military to provide them with legal cover. Golan claimed that his group was responsible for killing numerous high-profile figures in Yemen, but declined to name any of the targets besides their initial operation.

The Buzzfeed report recounts the details of the group’s first alleged operation in December 2015, in which Golan said he led a team of US mercenaries, backed by former members of the French Foreign Legion, in a botched assassination attempt of Islah leader Anssaf Ali Mayo in Aden. According to Golan’s account, the mercenaries had planned to kill Mayo using an explosive device attached to the doorway of the party’s headquarters in the city; the device did explode, however, Mayo had left shortly beforehand. The Sana’a Center spoke with an Islah member who was at the headquarters that night and confirmed there was an explosion, and that Mayo had left the building shortly beforehand.

Following this, Golan said Emirati military officials provided his team with high-end American weaponry, such as C4 explosives, pistols equipped with silencers, and M4 rifles. The Buzzfeed report also notes that the team was “outfitted with motorbikes they could use to scoot through Aden’s traffic and affix magnetized bombs to cars.”

Credit: Ghaidaa Alrashidy, Sana’a Center research

Tensions Escalate Between Islah and UAE-Backed Forces in Hadramawt

Amid protests over security and economic conditions in the administrative region of Hadramawt Valley (Wadi Hadramawt), tensions escalated between UAE-backed groups and Islah-dominated military units. Hadramawt valley’s security committee said on October 9 that it supported the protesters, in defiance of Vice President Ali Mohsen al-Ahmar, whose forces control security in the area and clashed with demonstrators at the beginning of the month, according to reports on pro-separatist news websites.

On October 12, pro-UAE news website Golden News published a report in which Hadramawt Governor Faraj Bahsani accused Islah-affiliated brigades of harbouring “terrorist groups” in Hadramawt valley, and called for the deployment of the Hadrami Elite Forces in the region. Security control in the southeastern governorate is split between Islah-dominated forces loyal to Ali Mohsen in Hadramawt valley, and the UAE-backed Hadrami Elite Forces in the governorate’s coastal region. Bahsani’s comments came after STC spokesman Salim Thabet al-Awlaki declared that Hadramawt valley would be “purged” of Islah-affiliated forces.

Other Military and Security Developments in Brief

Political Developments

President Hadi Sacks Prime Minister Ahmed Bin Dagher

On October 15, President Abdrabbuh Mansour Hadi dismissed Yemeni Prime Minister Ahmed Bin Dagher, citing government “negligence” over the country’s economic crisis and the insufficient response to tropical cyclone Luban (see below ‘Cyclone Luban Hits Mahra’). Hadi added that bin Dagher would be placed under investigation for corruption and failing in his duties as prime minister. Bin Dagher had been in the post since the spring of 2016, when he replaced then-Prime Minister and Vice President Khaled Bahah.

Dagher’s successor, Minister of Public Works and Roads Maeen Abdelmalek Saeed, is Yemen’s fourth prime minister since 2012. He arrived in Aden from Riyadh on October 30. He is generally considered to be more technocratic than political. As minister of public works, Saeed has worked closely with Saudi Arabia on projects in Yemen. Saeed was also vice president of the government’s coordination committee, which oversaw the deposit of US$2 billion Riyadh had granted the Aden-based Central Bank of Yemen (CBY) earlier this year. A Taiz native, Saeed was part of government delegations to previous UN-brokered peace talks with Houthi officials and took over the ministerial portfolio for public works in May 2017. (For more analysis, see ‘What Does the New Head of the Internationally Recognized Government Mean for Yemen?’)

STC Call for Uprising Against the Yemeni Government Fizzles Out

On October 3, the Southern Transitional Council (STC), a UAE-backed secessionist group in southern Yemen, issued a statement saying that it supported a “popular uprising” against the Yemeni government, amid ongoing protests in southern governorates over price hikes and the devaluation of the rial. The STC said “catastrophic” government policies were to blame for the economic crisis and called for the seizure of government institutions “by peaceful means.” The STC’s call for an uprising represented the most serious escalation in Aden since deadly clashes between the separatists and pro-Hadi forces in January 2018, during which the STC had accused the government of corruption and called for its dissolution.

In a response to the statement, the government said it rejected the “Houthi and separatist rebellion, and all terrorist acts.” It also demanded the centralization of military units under state command and a halt to funding for armed groups outside of state control – taken to be a reference to various UAE-backed local security formations operating outside of the formal state military hierarchy in the south. Yemen’s Ministry of Interior added that the member states of the Saudi-led military coalition beared legal responsibility for the security situation in Aden and other government-held areas.

Shortly thereafter, STC leaders met with UN Special Envoy Martin Griffiths in Abu Dhabi, following which their public statements were noticeably more subdued. The STC then called off demonstrations it had slated for October 14, Yemen’s southern independence day. The STC statement cited the economic crisis, saying resources dedicated to the planned protests would instead be used for humanitarian assistance.

Other Political Developments in Brief

Economic Developments

Economic Committee Implements New Fuel Importation Regulations, Houthis Threaten Bankers With Imprisonment if They Comply

Yemen’s financial and economic schism appeared to worsen in October, with the Aden-based and Sana’a-based authorities wrestling for control over import regulations and private sector financial players – particularly commercial banks – being caught between the two. The latest tensions relate to Ministerial Decree 75, which the Government of Yemen issued in September this year and whose aspects regarding fuel imports came into effect on October 9. Implementation of new regulations regarding food imports was postponed until November.

Decree 75 attempts, among other things, to limit fuel importers to only those approved by the Economic Committee, which the Government of Yemen established to help guide and implement its economic policy. The committee includes representatives from the Aden-based CBY and the banking sector, chambers of commerce and industry, and money exchange institutions. Those importers that meet the committee’s criteria are then eligible for import financing from the Aden-based CBY. Adherence to this importer selection is enforced in coordination with the Saudi-led military coalition – which has navy vessels patrolling Yemen’s coastal waters – and the United Nations Verification and Inspection Mechanism for Yemen (UNVIM), which is mandated to inspect all cargo ships headed for Houthi-held ports.

Among the Economic Committee’s criteria for approval are that importers must provide three years worth of bank statements from their operations. Furthermore, importers are required to deal with the banking sector, deposit their daily receipts from fuel sales into their accounts held in commercial banks, refrain from speculation in the currency market without the Aden-based CBY’s consent, and place a one-time deposit in a commercial bank account not less than 100 percent of the average value of the last five imported shipments.

These requirements would, however, disqualify many importers in Houthi-controlled areas. In July 2015, the Houthi authorities eased fuel importation and distribution restrictions in areas they control, opening the market – previously dominated by the state-run Yemen Petroleum Company (YPC) – for private sector actors. While pre-established private firms filled the immediate void left by YPC, in 2016 and 2017 a number of newly established players entered the market and quickly increased their share. This was due to a number of factors, chief among these being that the importers were on good terms with the Houthi authorities and were able to operate outside the commercial banking system, by using money exchange outfits for international financial transactions. In a recent alteration of this policy, the Houthi authorities have, since July 2018, required importers in areas they control to sell fuel directly to the Houthi-run YPC, allowing the Houthis a near monopoly on distribution in northern Yemen and thus the ability to set favorable profit margins.

In response to the Economic Committee’s moves last month, Houthi officials held a meeting with representatives from Yemen’s commercial banks in Sana’a on October 18. Here, the former threatened the bankers with reprisals, including imprisonment of senior staff, if they abided by Aden-based CBY and Economic Committee directives. The Houthi threats are thus likely to impede the committee’s efforts, given that all but one of Yemen’s 17 banks are headquartered in Sana’a, the exception being Yemen National Bank, which has a head office in Aden.

On November 4, the Sana’a-based CBY ordered commercial banks to refrain from using cash to cover letters of credit that are opened for imports, but rather that these letters of credit should be covered only using checks. This is an attempt to prevent the transfer of physical cash liquidity from Houthi-controlled areas to areas controlled by the internationally recognized Yemeni government.

Loopholes in the New Fuel Import Regulations

An example of the new fuel import regime in action came in mid-October, when the UNVIM denied two vessels authorization to dock at Hudaydah while their application to the Economic Committee was still pending. According to Sana’a Center sources, a single importer had arranged deliveries aboard the Al-Mirqab and Sea Heart, which were carrying 7,500 and 27,000 tons of fuel, respectively. The Economic Committee subsequently approved the importer’s application and the ships were permitted to dock.

The Sana’a Center Economic Unit learned that the importer, wary of Houthi reprisals for having interacted with the Economic Committee, had reached an arrangement with the Houthi-run YPC to allow him to proceed with the transaction unobstructed. Such ad hoc agreements, or possibly longer-term partnerships with fuel importers able to meet the Economic Committee’s criteria, proffer a potential avenue through which the Houthi authorities may circumvent the import restrictions of Decree 75.

Bankers: Fuel Imports Primary Cause of Rial Instability

On October 11, the Yemeni Banking Association in Sana’a published the findings of a survey it had sent to Yemeni commercial banks. The survey asking the bankers what they regarded as the factors contributing to the Yemeni rial’s (YR) rapid depreciation in August and September this year. The primary factor the bankers identified, above all others, was the increased demand for foreign currency in the market spurred by importers of fuel derivatives.

Sources: CBY, WFP, Sana’a Center Economic Unit

Yemeni Rial Fluctuates Wildly Throughout October

Since August 2018, the value of the Yemeni rial (YR) has experienced several waves of fluctuation. On October 1 alone, the YR’s value dropped 9 percent relative to the US$. This followed a 54 percent loss of value between July and September this year. In March 2015, when the current conflict intensified, the exchange rate had been YR215 per US$1.

In the first week of last month, the rial started to show signs of recovery, rebounding from YR765 per US$1 at the end of September to YR720 per US$1 by October 7. This was concurrent with the Saudi announcement of a US$200 million grant to the Aden-based CBY to shore up foreign currency reserves and support the rial. This comes in addition to the US$2 billion deposit Riyadh made at the Aden-based CBY earlier this year to allow it to finance imports of essential commodities and support the value of Yemen’s domestic currency. Also likely impacting the YR value, on October 3 global oil prices began a sustained slide.

In the second half of October, the rial entered another phase of depreciation, at its lowest trading in the range of YR730-760 per US$1. As of November 3, the rial had again regained ground to YR700 per US$1, after the Aden-based CBY announced the approval of US$170 million to finance the importation of basic foodstuffs, offering traders a preferential exchange rate of YR585 per US$1. In addition, the recent appreciation in the YR followed the arrival of a long-promised Saudi fuel grant amounting to US$60 million. This is part of a monthly grant Riyadh has allocated to support power plants in areas controlled by the internationally recognized government.

Houthis Appoint Governor for Sana’a-based CBY

In mid-October, the Houthis officially appointed Mohammed al-Sayani as the governor of the Sana’a-based CBY. Al-Sayani had been appointed deputy governor at the CBY in August 2012. Since President Hadi fired the previous CBY governor, Mohamed bin Humam, and officially relocated the CBY headquarters from Sana’a to Aden in September 2016, al-Sayani has been heading operations at the Sana’a-based CBY. His appointment as governor is thus essentially an official recognition of a role he had already been playing.

The Houthi appointment of a central bank governor is symbolic, however, of Houthi attempts to establish an independent monetary authority in areas they control. This, along with the undermining of the Economic Committee and the Aden-based CBY, is strategically important for the Houthis on various fronts, including to prevent the marginalization of Houthi-linked businesses and maintain their respective market share. as well as to allow liquidity to continue to flow through unofficial financial networks – namely money exchangers and the black market. A fully empowered Economic Committee would also help legitimize the Aden-based CBY and the Yemeni government.

The Houthi authorities also made two other notable appointments at the Sana’a-based CBY. The new deputy governor al-Shami had previously worked closely with Mohammed al-Houthi at the Supreme Revolutionary Committee, and in May 2018 had been appointed Undersecretary of the General Authority for Zakat. Youssef Zabara was also appointed Deputy Governor for Banking Supervision Sector.

UN Special Envoy: Economic Crisis the Top Priority in Yemen

On October 4, the UN Special Envoy to Yemen Martin Griffiths said that the plummeting value of the Yemeni rial should be the top international priority regarding Yemen and stressed the need for an emergency plan to help address this crisis. He explained that the plan could be formulated in a collaboration between the World Bank, the International Monetary Fund, UN agencies, Arab Gulf countries, and the internationally-recognized Yemeni government. On October 30, Griffiths stated that confidence-building measures for future negotiations would focus on “enhancing the capacities of the Central Bank of Yemen.”

The Special Envoy has, on multiple occasions in recent months, attempted to arrange meetings in Nairobi between representatives from the Sana’a and Aden-based CBY branches. These efforts aimed to kickstart the process of reunifying the CBY,. However, Griffiths attempts to stage these meetings failed. Moves by both the Economic Committee, the Aden-based CBY, and the Houthi authorities in Sana’a in October have likely increased the difficulty the Special Envoy faces in bringing together the CBY representatives.

In early November, Griffiths staged expert-level consultations in Amman, among which the topics of discussion included Yemen’s economic situation. Given the lack of influential decision makers at the meeting, however, there were little substantive outcomes.

Humanitarian Developments

UN Warns of Worst Famine in a Century

On October 15, the UN warned that Yemen was on the brink of the “worst famine in 100 years.” Lise Grande, the humanitarian coordinator for Yemen, said that mass starvation could engulf the country in the next three months, should fighting continue. Violence continues to impede the passage of aid and essential goods, while the rapid depreciation of the rial has caused fuel and food prices to soar – pushing almost two-thirds of the country’s population into food insecurity.

Source: WFP and Sana’a Center Economic Unit Survey for October 2018

In a briefing to the UN Security Council on October 23, Mark Lowcock, the UN’s humanitarian coordinator, said that his September estimate of the number of Yemenis facing pre-famine conditions was incorrect, adjusting the number from 11 to 14 million – half the country’s population. Lowcock added that the risk of famine was currently greater than at any other point in Yemen’s war, owing chiefly to fighting around Hudaydah and the economic crisis. He slammed government regulations on imports of essential commodities, saying that vessels carrying much-needed fuel had been refused entry in the days preceding, and cautioned against the extension of the regulations to food imports scheduled for November (see above ‘Economic Committee Implements New Fuel Importation Regulations’). In addition to a humanitarian ceasefire, Lowcock recommended a swift injection of foreign currency into Yemen’s economy to buttress the plunging rial. (For more on the connection between famine and the collapsing currency, see “Famine at Hand Without a Reunified Central Bank to Protect the Yemeni Rial”).

Cyclone Luban Hits Mahra

On October 14, Cyclone Luban made landfall in Yemen’s eastern Mahra governorate, with the UN estimating that 2,200 families were displaced by the storm. Mahra’s Emergency Operations Room confirmed three deaths and more than 100 injuries. Heavy floods damaged houses, water and electricity infrastructure in a number of districts, and blocked the main road linking Mahra to Hadramawt governorate, impeding humanitarian access. On October 15, the government declared Mahra a disaster zone.

The United Nations Population Fund, the Saudi King Salman Relief Centre, the Oman Charitable Organization and other national and international organizations assisted in providing tents, blankets, mattresses, humanitarian assistance, food baskets, and other emergency and medical supplies. In August OCHA reported that less than five organizations operate in Mahra, and in some districts organizations have no presence.

By October 21, rainfall had ceased in a number of Mahra’s cities and water levels in valleys had begun to decline. The numbers of displaced were reported to have decreased, with families returning to their homes. Following a visit to the governorate, Yemen’s new prime minister, Maeen Abdelmalek Saeed, announced on October 27 the allocation of YR2 billion for reconstruction in Mahra.

Other Humanitarian Developments in Brief

  • October 2: The World Health Organization (WHO) said cholera was on the rise again in Yemen, with 10,000 suspected new cases reported each week. In the first week of October, a six-day joint WHO-UNICEF campaign vaccinated more than 300,000 people in parts of Hudaydah and Ibb governorate.
  • October 7: UNICEF announced the third cycle of cash support assistance in Yemen – estimated to reach 1.5 million families. The World Bank-supported program began in August 2017 and aims to boost civilian purchasing power amid the rial’s rapid devaluation
  • October 21: Yemen’s education minister, Abdullah Lamels, said in a forum in Tunisia that more than one million children have been unable to attend school because of the conflict. He added that since the war started, more than 3,600 schools have closed down across the country.
  • October 22: Saudi Arabia and the UAE announced a US$70 million donation earmarked for salary payments to 135,000 teachers in Yemen.
  • October 30: As of this day, the UN and partner organizations had received 70.7% of the US$3 billion requested to implement its 2018 humanitarian response plan for Yemen.

Human Rights and War Crimes Developments

Airstrikes Kill Tens of Civilians in Hudaydah Governorate

On October 13, Saudi-led military coalition airstrikes hit mini buses passing a Houthi checkpoint in Jabal Ras town, Hudaydah governorate. The attack killed 15 civilians and injured 20, according to the UN. On October 24, airstrikes hit a vegetable packaging factory in Bait al-Faqih district, Hudaydah governorate, killing at least 21 civilians and injuring 10. On the same day, another three civilians were killed and six injured when airstrikes hit three vehicles in Hudaydah’s al-Hali district.

Houthis Detain Protesters in Sana’a and Ibb

On October 6, demonstrators turned out in Sana’a following calls on social media for protests in Tahrir Square against the declining economic conditions, under the slogan “The Hunger Revolution.” Houthi forces deployed across the city and at checkpoints prior to the demonstrations, including Houthi-trained female security forces, according to a female university student who spoke with the Sana’a Center. During the demonstrations, dozens of protesters were beaten and arrested. The female university student, who was among those arrested, said those detained were taken to a police station, investigated, and forced to sign pledges that they would not partake in future protests.

Simultaneous protests also occurred in front of Ibb University, according to online newspaper al-Masdar. Houthi forces responded similarly, with those arrested transferred to the Political Security building, but subsequently released.

Houthi media said the protesters were “mercenaries tasked by the aggressors to plant rumours and disturb public peace.” The official Houthi TV channel al-Masirah had, the day before the protests, aired a video about human rights activist Ali al-Sharabi, whom the Houthi Political Security forces had detained on September 18. Al-Sharabi appeared disheveled in the video, in which he confessed to purposely instigating the demonstrations to stir unrest.

Prior to his arrest, al-Sharabi had been working in the Ministry of Civil Services as a department manager and regularly published statements critical of the armed Houthi movement on social media. On October 22, his family was allowed to visit him for the first time since his arrest.

Other Human Rights and War Crimes Developments in Brief

  • October 5: Ali Zaki al-Saqaldi, an Islah member and correspondent for al-Masdar in the southern city of al-Dhale, was killed by unknown gunmen.
  • October 5: Houthi forces shelled the bin Jaber camp for Internally Displaced People (IDPs) in Hudaydah city, killing one woman and injuring 12 civilians.
  • October 6: Artillery fire on an IDP camp in the Khoukhah area of Hudaydah City killed a civilian and injured 12 others, according to the UN.
  • October 16: Houthi landmines killed six civilians and wounded dozens in Tahyta district in Hudaydah city, according to Al-Masdar.
  • October 20: An airstrike killed one civilian and injured four, near a fuel station on Zayed Street in Hudaydah city.
  • October 21: Airstrikes on a vehicle traveling in the Bani Hasan area in Abs, Hajjah governorate, killed two civilians and injured three.
  • October 22: Two photographers were kidnapped by Houthi forces in Hudaydah City according to Al-Masdar.
  • October 22: The Yemeni Journalists Syndicate reported that the third quarter of 2018 – July 1 through September 30 – had seen 35 “violations” against the media. These included four members of the press murdered, 11 kidnapped, six attacked, and 14 detained under harsh conditions in Sana’a. The syndicate implicated all parties to the conflict in these violations.
  • October 25: Houthi security forces raided a civil society event in Sana’a regarding intolerance in Yemeni media. Among those arrested were the former head of Yemen’s Journalists Syndicate, Abdulbari Taher, as well as some of the country’s most respected media figures and intellectuals.

This report was prepared by Waleed Alhariri, Holly Topham, Hussam Radman, Ghaidaa Alrashidy, Anthony Biswell, Sala Khaled, Aisha al-Warraq, Ali Abdullah, Victoria K. Sauer, Hamza al-Hamadi, Taima al-Iriani and Spencer Osberg.

The Yemen Review – formerly known as Yemen at the UN – is a monthly publication produced by the Sana’a Center for Strategic Studies. Launched in June 2016, it aims to identify and assess current diplomatic, economic, political, military, security, humanitarian and human rights developments related to Yemen.

In producing The Yemen Review, Sana’a Center staff throughout Yemen and around the world gather information, conduct research, and hold private meetings with local, regional, and international stakeholders in order to analyze domestic and international developments regarding Yemen.

This monthly series is designed to provide readers with contextualized insight into the country’s most important ongoing issues.

This month’s report was developed with the support of the Kingdom of the Netherlands and the Friedrich-Ebert Yemen office.

Program/Project: The Yemen Review
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