Yemen’s Accelerating Economic Woes During the COVID-19 Pandemic

Since early 2015, when the onset of war led to the cessation of large-scale oil exports, Yemen has been almost completely dependent on three main external sources to secure foreign currency inflows and stimulate economic activity: foreign humanitarian aid, Saudi financial support to the Yemeni government, and – by far the most significant – remittances from Yemeni expatriates, most working in Saudi Arabia. All three of these foreign currency sources have dramatically declined in 2020. The Saudi response to the COVID-19 global pandemic, in concert with record low oil prices, led to historic economic contractions and spending cuts in the… Continue reading…

Improving Marib Authorities’ Skills, Capacities to Meet IDP Influx

By Saad Hizam Ali With the Yemen war in its sixth year, the situation of public institutions in each governorate has changed in various ways. Marib governorate has become a destination for tens of thousands of internally displaced persons (IDPs) at a time from other areas, with the increase in population impacting the provision of public services. Marib also has become the site of some central government offices, which, like the families who have fled front-line areas, moved to the governorate because of its relative stability during most of the conflict.  In general, Marib has withstood the war better… Continue reading…

Economic Priorities for a Sustainable Peace Agreement in Yemen

By: Rafat Ali Al-Akhali & Zaid Ali Basha The sustainability of a peace agreement in Yemen depends on two critical economic issues. First, in a conflict that is largely over access to resources, the issues of distribution, control, and sharing of those resources can make or break peace. Therefore, these issues must be addressed head-on during negotiations. Second, where peace agreements lack provisions that create overall economic stability, warfare can resume during the fragile implementation period. The fears over the resumption of conflict after signing a peace agreement are substantiated by several historical events in Yemen, such as the failure… Continue reading…

Microfinance in Yemen: An Overview of Challenges and Opportunities

In 1997 microfinance was introduced to Yemen. The government, supported by international donor states, viewed it as a strategic tool to alleviate poverty and reduce unemployment by expanding financial services to small and micro entrepreneurs to increase their share of the national economy. However, persistent challenges facing the microfinance industry have stunted its development, reach within the population and overall socioeconomic impact. More recently, the institutions, businesses and individuals involved have also faced challenges associated with the ongoing civil war and regional military intervention. Structurally, the microfinance industry in Yemen can be separated into two distinct institutional groupings: the… Continue reading…

Developing Yemen’s Fishing Industry

The fishing industry in Yemen faces many structural challenges that have limited its production and potential contribution to overall economic output. Development of the industry’s infrastructure, human capacity and regulation was already poor prior to the outbreak of the ongoing armed conflict in Yemen. Since the war began five years ago the fishing industry has faced increased challenges, including a significant drop in the level of production with the displacement of many fishermen and associated workforce; fish processing plants halting production; surging fuel costs; the decline of local purchasing power leading to a drop in the local demand for… Continue reading…

Developing Human Capital

This policy brief summarizes discussions regarding Yemen’s human capital at a “Rethinking Yemen’s Economy” workshop held in Amman, Jordan, on August 24-25, 2019. The workshop participants agreed that Yemen’s human capital accumulation has almost certainly regressed since the current conflict began. However, there is a dearth of reliable data to assess the scope and nature of this regression and thus how to best direct responses. There was also a consensus that many of the obstacles to improving Yemen’s human capital were present prior to the current conflict. In line with these findings, this brief recommends: countrywide population surveys; more… Continue reading…

The Yemen Syllabus

Prepared by Sana’a Center for Strategic Studies This document aims to guide readers toward substantive and important publications related to Yemen. Section A includes suggestions on how to get accurate and up-to-date information on the country. Section B lists academics and analysts who have written on Yemen. Section C outlines what the Sana’a Center views as must-read publications on Yemen. These include books, reports and articles, broken down by theme.   The Yemen Review: Monthly publication by the Sana’a Center that assesses current diplomatic, economic, political, military, security, humanitarian and human rights developments related to Yemen. For all other Sana’a… Continue reading…

A Gendered Crisis: Understanding the Experiences of Yemen’s War

photo by Yasser Abdualbaqi, Aden, 2016 Dr Fawziah Al-Ammar, Hannah Patchett & Shams Shamsan   Few Yemenis have been spared the catastrophic impact of the Yemen War, but prevailing gender norms mean women and girls, and men and boys, have experienced the conflict differently. This report explores how gender norms have shaped Yemenis’ experience of conflict, and how conflict is reshaping gender norms in Yemen. The report is based on qualitative research, including 88 focus group discussions conducted across Yemen from November 2018 to February 2019, 49 key informant interviews, six case studies and a literature review. The focus group… Continue reading…

Restructuring Public Finances in Yemen

Even before the current conflict, Yemen’s public finances suffered from an overdependence on energy exports, one of the lowest tax collection rates in the world, and chronic budget and balance of payments deficits. The government’s consistent operating deficits were funded through domestic debt instruments – drawing investment away from the private sector – borrowing from its own central bank, and foreign loans. Meanwhile, current (or recurring) expenditures dominated government spending relative to capital investments, indicating the state’s poor track record in development initiatives. With the intensification of the conflict in 2015, energy exports and foreign grants were frozen, while… Continue reading…

Inflated Beyond Fiscal Capacity: The Need to Reform the Public Sector Wage Bill

This policy brief addresses the issue of Yemen’s bloated public sector. Due to decades of corruption and patronage appointments, among other factors, public sector salaries were already a source of fiscal stress prior to the ongoing war. Previous efforts to downsize the public sector, notably those supported by the World Bank, produced few tangible results, as this brief outlines. During the conflict, the internationally recognized Yemeni government and the armed Houthi movement have added to the public sector payroll — particularly in the military and security apparatus — as the economy has contracted. Amid consistently large budget deficits, the… Continue reading…