The Yemeni government’s decision in September to relocate the central bank and replace its governor has left the country without an institution capable of providing basic economic stabilization. While all the belligerent parties to Yemen’s armed conflict have sought to leverage economic factors, the incapacitation of the central bank may represent an unprecedented escalation in this regard; the international community…

Yemen’s local councils are responsible for the day-to-day provision of basic public services to 26 million Yemenis and are amongst the most crucial institutions of governance in the country. However, the outbreak of civil war in 2014 and the subsequent Saudi-led military intervention in Yemen in March 2015 has devastated local councils’ ability to provide these services: financial resources have evaporated, armed militias challenge their authority, and extremist groups such as Al Qaeda and the Islamic State have assassinated council…

The current armed conflict in Yemen began, essentially, as a domestic struggle for power between political and tribal factions. This reality ran contrary to the conventional narrative in the international news media that Yemen was another sectarian arena in the proxy war between the Middle East’s two great Sunni and Shia rivals, Saudi Arabia and Iran, respectively.

The Gulf Cooperation Council and the international community brought together Yemen’s various political power brokers in 2011 to help end the crisis the country had entered following the so-called “Arab Spring” uprisings. These negotiations resulted in an agreement that became known as the GCC Initiative, which ushered Yemen into a “transitional phase”. This period was intended to pave the way for a peaceful transfer of power away from President Ali Abdullah Saleh, address citizen demands for democratic reform and transitional…

In whatever post-conflict scenario eventually prevails in Yemen, the domestic currency and the institutions of state will be essential to the rebuilding process. To date, both have persevered despite the enormous pressure of a vicious civil war and foreign bombing campaign. The Central Bank of Yemen’s actions have successfully protected the value of the Yemeni riyal against the American dollar – essential in a country that imports 90% of its food requirements – while the central government, which even at…