The 2019 High-Level Pledging Event for the Humanitarian Crisis in Yemen brought together 40 countries and dozens of international organizations in Geneva, Switzerland, on February 26.
The panel discussion, entitled ‘The Challenges of Food Security and the Role of the Economy’ featured Amal Nasser, non-resident economist at the Sana’a Center, among its speakers.
Also speaking were: Lise Grande, the United Nations Humanitarian Coordinator for Yemen; Valerie Guarnieri, Assistant Executive Director of the World Food Programme; Mohammed al-Jaber, Executive Director of the Yemen Comprehensive Humanitarian Operations Support Center; and Winnie Byanyima, Executive Director of Oxfam International.
The following is the text of Nasser’s speech:
Good afternoon ladies and gentlemen,
Thank you for holding this event today and for inviting me to speak. It is great to have people from so many countries coming together to try and address the humanitarian crisis in Yemen.
As an economist, however, I feel the overwhelming focus on the humanitarian situation distracts us somewhat from the point – that the humanitarian crisis is actually an economic crisis, and that this economic crisis is a result of a political conflict.
This means that the only true solution to the humanitarian crisis is to end the war. Until the war is over, we have to realize that any successes we have in addressing the crisis will be temporary and fragile.
That said, there are ways the current situation can be improved, and I would like to talk about them today. But first I’d like to highlight a couple key points:
Most of Yemen’s 1.2 million public sector workers have not received a regular pay check since August 2016.
While there have been some recent efforts to restart Yemen’s Social Welfare Fund, it ran out of funds for cash disbursements in December 2014. This means millions of Yemenis have been without state support for more than four years.
These two things combined have contributed more to the suffering of Yemenis than the war itself. As a consequence gender-based violence, child marriage, and child recruitment hit record levels like never before in Yemen.
That is why an economic de-escalation of the conflict is so critical. Basic state finances must be allowed to function and to provide for the basic needs of Yemenis.
It must be recognized that the lack of an economic de-escalation mechanism is among the primary factors blocking the implementation of the Stockholm Agreement – and specifically the agreement on Hudaydah.
Hudaydah, as we all know, is the country’s busiest port and the lifeline for millions on the edge of starvation. The main reason the city and port remain divided between the warring sides is that there is no agreement about what to do with port revenues.
There are also other factors aggravating the economic and humanitarian crises in Yemen:
Among the goals of the Saudi 2030 Economic Vision is to dramatically increase the share of Saudi nationals employed in the kingdom’s private sector. One of the ways the authorities are trying to achieve this is through forcing foreign workers out.
It is estimated that there are more than a million Yemenis working in Saudi Arabia. The remittances they send home amount to billions of dollars annually, and support millions of family members in Yemen. They are also Yemen’s largest source of foreign currency since large-scale oil exports stopped in 2015.
That means remittances have been the largest factor preventing the Yemeni rial from losing more value than it already has, with the rial’s depreciation in turn being the main reason why so many Yemenis can no longer afford food.
Tens of thousands of Yemeni workers have already been forced out of Saudi Arabia. According to Sana’a Center research, roughly 70 percent of Yemenis working in the kingdom will lose their jobs by 2020 if current policies announced in Riyadh are fully implemented.
However terrible the situation in Yemen is now, it will be profoundly worse if these workers are forced to come home.
So what are steps that can be taken to help mitigate Yemen’s economic and humanitarian crises?
One, there must be multilateral diplomatic pressure put on all the warring parties for an economic de-escalation. The first item on this agenda must be the re-unification of the central bank.
The consequences of this state institution being divided are immense:
- profound currency instability;
- challenges for importers to bring in basic commodities;
- the inability for the state to collect revenues and pay salaries;
- increased money laundering and smuggling.
And many others.
All of these consequences undermine the humanitarian effort, and therefore make it critical that the Central Bank of Yemen be re-unified and allowed to act independently from any of the warring parties.
Two, Saudi Arabia MUST grant Yemeni workers an exemption from its labor nationalization policies and excessive expat fees. The consequences of Yemeni workers in Saudi Arabia losing their jobs, and the economic, social and security collapse their return would cause on Saudi Arabia’s southern border would potentially last for decades.
Three, diplomatic pressure must be brought on the Houthi authorities in Sana’a to dismantle NAMCHA, the National Authority for the Management and Coordination of Humanitarian Affairs. This recently created department is redundant in its mandate, but more importantly has done little other than facilitate corruption and the institutional theft and redirection of humanitarian aid.
Four, Yemen’s internationally recognized government should analyze and incorporate into its policies the recommendations of Yemen’s Development Champions. This is a group of almost two dozen of the most important socio-economic experts on Yemen, and they have issued a wide range of actionable recommendations regarding how to restore the central bank, how to support the humanitarian response, planning for post-conflict reconstruction, among many other issues.
Five, while it is great to raise money for the humanitarian effort, what will really matter is how this money is spent. To ensure accountability, there must be stronger monitoring of INGO activities in Yemen. Recent media reports about large scale theft and diversion of aid highlight the necessity for this increasing INGO monitoring and transparency.
Amal Nasser is a non-resident economist at the Sana’a Center for Strategic Studies