Starvation, Diplomacy and Ruthless Friends: The Yemen Annual Review 2018

The Yemen Review

January 22, 2019 Reading time: 02:52:12

Hani al-Moalem overlooks Taiz from the wreckage of his café. He used to own six such businesses in the city, all of which the war has left either fully or partially destroyed // Photo Credit: Anas al-Hajj

The Sana’a Center Editorial:

Beyond the Brink

Yemen is no longer “on the brink” of catastrophe. Rather, it has already been pushed into the abyss and therein continues to fall. After four years of war, Yemen has suffered the destruction of its infrastructure, economy, social fabric, and much more. Yemenis are a nation traumatized by human loss and starvation. In the past year, photos of malnourished children have become synonymous with Yemen worldwide. Yet, as much as it deserved the media attention, the story of the world’s worst humanitarian crisis at times concealed the fact that this is not a natural disaster that has befallen Yemen. It is an accumulation of political conflicts within the country, exacerbated by reckless regional interference backed by the world’s Western powers.

Aid organizations are now preparing for another year of humanitarian suffering. The United Nations has announced plans to raise funds amounting to $US4 billion – a third more than last year’s appeal for roughly US$3 billion – with Saudi Arabia and the United Arab Emirates funding about a third of the appeal. However, humanitarian organizations are reaching their capacity limits, while the immense looting and confiscation of humanitarian supplies in which belligerent parties are engaged – the Houthi forces far more than any – means aid itself is at times helping to finance the war instead of reaching those in need. Neither the coalition powers nor the Western countries backing them should therefore content themselves with pouring aid into Yemen. Yemen desperately needs political decisions to be made.

At a closer look, developments last year demonstrated clearly that the crisis in Yemen is political at its core, and that’s how it needs to be addressed. It was new geopolitical dynamics that encouraged decisions to contain Yemen’s downward spiral toward the end of 2018 – even if decisions came late, unexpectedly, and at times resulted from events that on face value had little relation to the Yemen conflict.

At the epicenter of the conflict and its shifting dynamics were the city of Hudaydah and the nearby ports – the last access Houthi forces have left to the Red Sea. These ports are also the entry point for most of the basic commodities feeding a nation descending into mass famine. For some two years the Saudi-led military coalition has been pushing for a military campaign to take Hudaydah. However, international concern – that cargo shipments would be interrupted and trigger a humanitarian catastrophe – has been intense, and the coalition was waiting for a green light from its main backers, the United States and the United Kingdom, to pursue the offensive. Near the midpoint of 2018, Washington gave what amounted to a “yellow light”, according to a US government official who spoke with the Sana’a Center at the time.

The strategic and military preparations for the campaign changed the calculations of various groups in the anti-Houthi coalition. For instance, the UAE had for the past several years built proxy militias in areas the Yemeni government is meant to control, with these militias often challenging the government’s authority and some seeking to partition the country. In 2018, however, unity among anti-Houthi ground forces was seen as paramount for the battle for Hudaydah. With UAE prompting, these disparate groups closed ranks and put differences aside for the military campaign. Symbolic of this were the visits to Abu Dhabi by Yemeni President Abdo Rabbu Mansour Hadi and Islah party leaders in 2018.

Through the latter half of 2018, the coalition’s efforts to drive the Houthis from Hudaydah progressed slowly and effectively stalled at the southern edge of the city, threatening to become a battle of attrition. Simultaneously, international pressure was building on Saudi Arabia – pressure that was then key to facilitating the UN-led peace consultations in Sweden and the Stockholm Agreement that halted the battle for Hudaydah. It was, however, not the possible starvation of millions of Yemenis that created the international momentum for peace consultations and a ceasefire. Rather, it was the media spectacle around the murder of one man, Saudi journalist Jamal Khashoggi, at his country’s consulate in Istanbul that provoked international outcry and prompted Washington and London to force Riyadh’s hand. Many Western leaders had been growing increasingly uncomfortable over reckless Saudi foreign policy and were embarrassed by reports of war crimes in Yemen committed by their ally, including bombing buses full of school children and siege tactics that have helped push the country toward mass starvation. However, while Western countries, above all the US and the UK, had enabled the Saudi-led military intervention in Yemen, they had no hand in Khashoggi’s murder, which allowed for an opportunity to criticize Riyadh while claiming the moral high ground.

The Stockholm Agreement, endorsed by the UN Security Council, came about thanks to international pressure, Saudi influence over the Yemeni government and the belligerent parties each wanting to avoid blame for the peace process’ failure. At the same time both sides were hoping to gain an advantage. The UN Special Envoy for Yemen Martin Griffiths secured the warring parties’ commitments not through compromise, but by watering down the language in the deal to the point that what the parties actually committed to is widely up to their own discretion. In the short time it has been since the talks, it is apparent the parties are interpreting their commitments quite differently. Neither regarded the talks as a stepping stone to a greater accord, but rather a localized accommodation.

President Hadi – technically still a ‘transitional president’ who was meant to leave office in 2014 – also knows his exit from power is almost assured if and when a peace deal is signed. Hadi’s choice to send a delegation to Sweden was, however, not his to make, given that he is beholden to his Saudi patrons. Indeed, Hadi has attempted to govern his country from Riyadh since 2015. The armed Houthi movement likewise attended the talks under duress. Their leadership is keenly aware that the greatest “victory” they could possibly achieve at this point is to survive. The pummeling Houthi forces have been sustaining on the battlefield has left them smarting and looking for a way to ease the pressure.

There is, however, little to no chance that the Houthis will cede a military defeat to their opponents. And while they have been militarily pressured, in the territories they control they have acted increasingly paranoid and continued to craft their own police state: persecuting minorities, staging show trials and executions, banning civil society groups and launching arrest campaigns to purge undesirables – such as free-thinking journalists, human rights advocates and others – institutionalizing the extortion of businesses, workers and aid organizations, conscripting children into combat roles, and propagating religious zealotry upon the masses. Before the Houthis took over, there was more than 20 daily and weekly independent newspapers publishing from Sana’a. Today, there are only Houthi publications. Meanwhile, the ongoing war also pushed them closer to Tehran, which is ironic given that Saudi Arabia and the UAE launched their military intervention in Yemen to prevent what they saw as Iranian encroachment in their backyard.

Thus, the war has become increasingly complex as it has proceeded, entrenching the clout of warlords and armed groups as it goes and advancing the country’s fragmentation. This trend is likely to continue in the absence of a broader settlement to end the conflict. The details of what a political settlement would look like remain elusive, but some of the parameters are clear.

That the UN-led consultations began only after the US and UK – Saudi Arabia’s primary military and political backers – made it incumbent on Riyadh to facilitate them is telling: a final peace agreement will almost certainly require continued US, UK and wider international pressure to keep Riyadh and other foreigner actors on course.

Economic recovery and price stabilization – such that the population can afford to feed itself – would be foundational for political and social stability. The rapid reunification of the Central Bank of Yemen – currently divided between competing headquarters on either side of the frontlines – would be the first step to contain the economic deterioration and bring back basic public services across the country. Saudi Arabia must also stop the mass expulsion of Yemeni expat workers it is currently undertaking, given that their remittances help support millions of family members in Yemen.

Political and social stability would be fleeting while myriad armed actors continued to challenge the government’s authority, and thus reining them in would be a prerequisite for peace. In this respect, local instruments of mediation and negotiation should be favoured over UN textbook procedures. In practical terms, the UAE will need to desist from empowering secessionist groups in southern governorates and begin to decommission their armed wings. In the north it would require that Houthi forces withdraw from cities and hand over their heavy weapons to a third party. Indeed, all non-state actors in the country would need cede their military leverage, as the Yemeni state – whatever shape it eventually may take – must have a monopoly on the use of force.

None of these groups will agree to disarm unless they are reasonably assured that their long-standing grievances, which predate the war, would be addressed in the country’s post-conflict political arrangement. The planning of how the state is reconstructed will thus have to be an inclusive affair, though one that learns from the failures of the country’s 2013-2014 National Dialogue Conference (NDC) that precipitated the current conflict.

Among these lessons: agreed-upon trust-building measures must be fully implemented prior to the talks. While international pressure must be brought to bear on all parties to reach an agreement and to limit spoilers, reaching this agreement must involve genuine compromises regarding points of contention. Diluting the commitments until the belligerents find them acceptably vague is the road back to war. Unconditional amnesty from prosecution for war crimes for any party is also a nonstarter. Rather, any transitional justice process must be conditional relative to the parties adhering to their commitments.

Most parties to the original NDC saw some form of federalization as necessary to address regional grievances – whatever final form this takes must be mutually agreed through negotiation. It will necessarily require revenue sharing arrangements between the various regions to allow basic public services to be delivered nationwide.

The success of any political arrangement will depend on external factors as well. Yemen’s poverty is unfortunately likely to continue in the medium term, as will long-standing political rivalries between the various local stakeholders. These factors will leave Yemen susceptible to foreign influence and fertile ground for proxy confrontations between the region’s polarized power centers, particularly Saudi Arabia and Iran. Thus, similar to other countries around the Middle East and North Africa enduring civil strife, while relative peace and stability can be achieved in Yemen, it will remain under constant threat from outside factors in the absence of regional de-escalation. International stakeholders should recognize this, and see the opportunity that ending the Yemen conflict presents in this regard: an achievable localized outcome that has the potential to unlock far broader geopolitical shifts across the region.

Editor’s note: The Yemen Annual Review 2018 offers readers a comprehensive document regarding the most important Yemen-related events and developments between January 1 and December 31. Taken altogether the size of the text may be unwieldy for some readers, while others may have specific topic areas upon which they would like to focus. To address these issues and increase the accessibility of this document, we have provided:

a hyperlinked table of contents listing the various sections and subsections in the text, allowing the reader to easily navigate to their topics of interest. (To navigate back to the contents listing, simply press the ‘Back’ button on your browser.)

an overview at the beginning of each section outlining the most important developments discussed therein.

Mukalla in September: Protesters block streets and burn tires in one of many demonstrations across the country as the collapsing currency sends food and fuel prices soaring // Photo Credit: Suliman al-Nowab

Diplomacy Gains Momentum

Overview: The Road to the Sweden Talks

In early December UN-led peace consultations regarding the Yemen conflict were held for the first time in more than two years. Representatives from Yemen’s main warring parties – the armed Houthi movement and the internationally recognized Yemeni government – met in the Swedish town of Rimbo, north of Stockholm. The consultations ended with the Stockholm Agreement, in which the belligerents committed to a prisoner exchange, a ceasefire agreement around the port city of Hudaydah with UN monitoring, and a statement of understanding to form a joint committee, with UN participation, regarding the situation in Taiz City (see below ‘The Stockholm Agreement’ for details).

Momentum toward the talks in Sweden increased as 2018 progressed. Through the first half of the year and into the summer, the UN and other humanitarian agencies issued progressively more dire warnings that the conflict was driving millions of Yemenis into famine (see ‘A Deepening Food Security Crisis’), while evidence of war crimes by all belligerent parties continued to mount (see ‘More Investigations, More Impunity’). The conduct of Saudi Arabia and the United Arab Emirates (UAE) – the largest partners in the regional coalition intervening in the conflict in support of the Yemeni government – came under increasing scrutiny in Washington and London, among other western capitals. The United States (US) and the United Kingdom (UK) have provided crucial backing to the coalition campaign since it began in 2015. However, lawmakers in both countries voiced increasing concerns through 2018 that this support was directly contributing to the humanitarian crisis and civilian casualties (see ‘US and UK Policy Toward Yemen’).

In October, the murder of Saudi journalist Jamal Khashoggi at the Saudi consulate in Istanbul triggered international outcry. In the subsequent media frenzy the Saudi-led military coalition intervention in Yemen and its humanitarian implications also came under intense international media and diplomatic scrutiny. By the end of October top US and UK officials were calling for a ceasefire and a new round of peace talks, with these calls then echoed by other western countries (see ‘The Khashoggi Effect’).

In early November, the UN Security Council (UNSC) began negotiating a new draft resolution on Yemen for the first time since adopting Resolution 2216 in April 2015, shortly after the Saudi-led military coalition intervention began. The UK, penholder of the Yemen file at the council, led the drafting of the new resolution in consultation with the US. Meanwhile, UN Secretary General António Guterres personally pushed for diplomacy on Yemen. Guterres discussed logistical issues for UN-led consultations on the sidelines of a meeting with Saudi Crown Prince Mohammed bin Salman in Argentina at the end of November, according to UN Special Envoy for Yemen Martin Griffiths.

Griffiths’ appointment as the new UN Special Envoy for Yemen in early 2018 also helped to bring new dynamics into the stalled peace process (see ‘The New UN Special Envoy’). An attempt to bring the warring parties together in September in Geneva had, however, failed due to logistical complications in transporting the Houthi delegation to the talks (see ‘Failure in Geneva, Success in Rimbo’). Sweden, whose non-permanent Security Council membership was to end on December 31, 2018, then helped lead a diplomatic push to support the Special Envoy’s efforts to bring the warring parties together before the end of the year. Sweden offered to host the meeting and was actively engaged at the ministerial level throughout the consultations.

During the week-long consultations in Sweden, from December 6-13, three confidence-building measures were on the agenda: the reopening of Sana’a International Airport for commercial flights, the enhancement of the capacity and reunification of the Central Bank of Yemen (CBY), and an exchange of prisoners. Only on the latter was an agreement reached. Griffiths also introduced de-escalation plans for the cities of Hudaydah and Taiz at the talks. In a rush to meet the consultations deadline of December 13, mediators successfully pushed for an agreement, although various clauses in the resulting document contained a degree of ambiguity. Sources familiar with the proceedings told the Sana’a Center that as the negotiations were ending Guterres spoke with Crown Prince Salman, following which the latter called Yemeni President Abdo Rabbu Mansour Hadi and instructed him to sign on to the de-escalation agreement for Hudaydah. The warring parties also agreed on a new round of UN-led consultations in January 2019, with the location yet to be confirmed as of this writing.

The Special Envoy’s office announced that the ceasefire for the Hudaydah governorate should commence on December 18, 2018. On December 21, the UN Security Council adopted Resolution 2451 endorsing the Stockholm Agreement. It authorized the UN Secretary General to deploy an advance team to monitor compliance for a 30-day period, beginning immediately. A UN team, led by retired Dutch Maj. Gen. Patrick Cammaert, arrived in Hudaydah shortly thereafter to monitor the ceasefire. Importantly, this was the first time the Security Council had authorized the deployment of UN monitors to Yemen.

The Stockholm Agreement

A UN-Monitored Ceasefire in Hudaydah

Hudaydah is home to the country’s busiest port. The port of Hudaydah and nearby Saleef and Ras Issa ports are the primary entry points for most of Yemen’s basic goods and humanitarian supplies. With Houthi forces having controlled the city and ports since 2015, the area has been the primary focus of coalition military efforts throughout the conflict. By the fall of 2018 coalition-backed troops had advanced to the city’s southern outskirts. Meanwhile, UN agencies, humanitarian organizations and others have repeatedly warned that the ports are a lifeline for millions of Yemenis on the cusp of famine, and that an interruption in cargo deliveries would have catastrophic humanitarian consequences (see ‘Hudaydah, the Heart of the Crisis’).

The de-escalation agreement on Hudaydah envisaged UN monitoring of the ceasefire and the redeployment of armed forces away from the city and the ports of Hudaydah, Saleef and Ras Issa. The UN was to take a leading role in the management of the ports, while the existing UN Verification and Inspection Mechanism (UNVIM) for monitoring the ports was to be enhanced.

The agreement was set to be implemented within 21 days, split into two phases. Houthi forces were to withdraw from the ports of Hudaydah, Saleef and Ras Issa within two weeks of the ceasefire. A “full mutual redeployment of all forces” from the city and its ports was to be completed by the end of the 21 days. Local forces – agreed upon by a Redeployment Coordination Committee (RCC) comprised of both warring parties – were to take control.

With the UNSC’s approval of Maj. Gen. Cammaert to lead the UN’s ceasefire monitoring team, he was also nominated to chair the RCC, which included three representatives each from the internationally recognized Yemeni government and the armed Houthi movement. On December 22, 2018, a day after the adoption of UNSC Resolution 2451, Cammaert arrived in Aden and met with the government’s representatives on the RCC. On December 24, he met with RCC members representing the armed Houthi movement in Sana’a, before heading to Hudaydah.

As of this writing, the implementation of the security arrangement for Hudaydah faced significant challenges, particularly in interpretation. The agreement stipulated that security in the city of Hudaydah and its ports should be “the responsibility of local security forces in accordance with Yemeni law”. Since mid to senior-level administrative and military posts in Hudaydah were, as of the end of 2018, held by Houthi appointees, one interpretation of the agreement would be that security responsibilities were to remain in the hands of these Houthi-affiliated officials – an interpretation the Houthi leadership would obviously favor. Another interpretation of the agreement would be that security personnel in charge prior to the Houthi takeover in 2014 would be reinstated, or that new forces would be recruited from Hudaydah’s local population; given that the armed Houthi movement has little local support, these latter interpretations would be preferred by the Yemeni government.

The challenges related to interpretation became apparent on December 29 when the Houthi leadership announced the withdrawal of its forces from the main port of Hudaydah. Speaking to journalists, sources close to the government accused their Houthi opponents of simply moving their fighters and loyalists into positions in port management and the coastguard. Several independent Sana’a Center sources supported this claim. These sources also described how, on December 29, Houthi officials had invited Maj. Gen. Cammaert to the port for discussions, but upon his arrival he was confronted by a staged media event in which Houthi fighters paraded out of the port and the replacement staff paraded in, with television cameras rolling to show that Cammaert was in attendance. The next day the UN announced that compliance with the Hudaydah agreement needed to be independently verified and expressed regret that the opening of a humanitarian corridor from Hudaydah to Sana’a had not taken place as agreed.

Divisions between the Yemeni government and anti-Houthi forces present in Hudaydah are also risk factors for the implementation of the Stockholm Agreement. In particular, the National Resistance Forces, led by Tariq Saleh and supported by the UAE, operate outside of Yemeni government command and control. Tariq – through ties his uncle Ali Abdullah Saleh built in Hudaydah during his three decades as Yemen’s president – has a local support base in the area. Sana’a Center analysts expect Tariq Saleh will likely attempt a power grab in Hudaydah as 2019 progresses. This would put him at odds with the Yemeni government and complicate any commitments the government attempts to make regarding Hudaydah during peace negotiations.

The Stockholm Agreement also stipulated that the revenues of Hudaydah, Saleef and Ras Issa ports were to be deposited in the local branch of the central bank and used toward the payment of civil servant salaries in Hudaydah governorate and throughout Yemen. The Yemeni government has refused to pay most government salaries in Houthi-controlled areas of the country for two years, while many of the regional branches of the CBY have stopped reporting revenues to the government-controlled CBY headquarters in Aden (see ‘Competing Monetary Policy: A Tale of Two Central Banks’). As no agreement was reached in Sweden regarding the central bank, the implementation of this part of the Stockholm Agreement regarding Hudaydah remained uncertain.

A Joint Committee for Taiz

The statement of understanding on Taiz was limited to an agreement to form a joint committee with UN participation, including representatives from Yemeni civil society. The committee was to determine its working mechanism and missions. The statement presented an opportunity to de-escalate tensions in the city and open humanitarian corridors to ease the movement of aid and people. However, the statement’s vague formulation left it open to different interpretations by the warring parties and lacked a timeframe or any clear terms of reference.

Prisoner Exchange

The first thing the parties agreed to in Rimbo was a prisoner exchange agreement. As of this writing, the exchange of thousands of prisoners was to take place as soon as mid-January 2019, but this faced potential challenges too. On December 29, Yemeni government officials said that of the 8,500 names of prisoners they had submitted to Houthi representatives, the latter had claimed almost 3,000 of them were not in Houthi custody.

UN Security Council Ends Impasse on Yemen

UNSC Deadlocked Throughout Most of 2018

Before it adopted Resolution 2451 in December, the UN Security Council had been in deadlock regarding Yemen for most of 2018. Sweden, Peru, the Netherlands and at times Poland had through the year lobbied for a new resolution and for greater accountability from all parties to the war. However, these efforts were derailed by the US, the UK and Kuwait, who during council proceedings on Yemen generally steered discussions toward Houthi ballistic missile attacks on Saudi Arabia and Iranian non-compliance with the arms embargo established by UNSC Resolution 2216. The states opposing a new Yemen resolution also succeeded in repeatedly weakening the language in council statements and blocking references to suspected coalition violations of international humanitarian and human rights law. They were supported in these efforts by, at times, intense lobbying by Saudi Arabia and the UAE, neither of which is a UNSC member.

In February, Russia used its veto power for the first time with regards to the Yemen conflict to quash a draft resolution at the Security Council. The UK, as the penholder of the Yemen file at the council, had introduced an annual routine draft resolution to renew the mandate of the Panel of Experts and the Sanctions Committee for Yemen. The UK also inserted a non-routine passage in the resolution regarding Iran’s alleged non-compliance of the arms embargo on Yemen, which the Panel of Experts had reported. Russia vetoed the British draft resolution, while China abstained. The Security Council then voted in favor of a routine resolution, drafted by Moscow, to renew the mandate of the Sanctions Committee.

In March, the Security Council adopted a Presidential Statement expressing concern over the humanitarian crisis in Yemen and calling out attacks on densely populated areas. The Netherlands and Sweden had pushed for a resolution on Yemen’s humanitarian crisis, but the UK as penholder introduced a Presidential Statement instead. Presidential Statements are considered less weighty and lack the mandatory enforcement power of a Chapter 7 resolution. In the final text, the UNSC called on all parties to abide by their obligations under international humanitarian law, though only Houthi forces were censured by name regarding attacks against civilians; Kuwait successfully lobbied to have references to Saudi-led military coalition airstrikes removed and to weaken the language regarding accountability for violations in Yemen.

In June, the Security Council held three closed consultations on Yemen in light of the Hudaydah military offensive. The outcomes were limited to short press elements, which made no reference to Hudaydah. Sana’a Center sources indicated that the statements had been watered down by the UK and Kuwait. After the launch of the battle for Hudaydah in June, Sweden recommended a call for an “immediate freeze” to the offensive to avoid an assault on the port. This failed to gain consensus support at the council. Kuwait lobbied heavily against the move, while the UK and France said a call for the immediate cessation of hostilities was not viable. Instead, the UK called for compliance with international humanitarian law and the protection of civilians by parties to the conflict. The UK’s approach to Yemen did not change until the end of 2018 when London started to push for a new resolution.

Breakthrough in December

On December 21, 2018, the Security Council finally adopted Resolution 2451 which endorsed the Stockholm Agreement. This was the first council resolution on Yemen since Resolution 2216 of April 14, 2015. The resolution was first drafted and circulated among member states in November, prior to the Sweden consultations, and focused on a cessation of hostilities and measures for humanitarian relief, including the injection of foreign currency into the economy.

According to Sana’a Center sources, Saudi Arabia exerted pressure on Security Council member states, particularly the US, and threatened that the Yemeni government and the Saudi-led military coalition would disengage with the UN Special Envoy for Yemen’s peace efforts if the new resolution was adopted. The concurrent recovery of the Yemeni rial, which had major humanitarian implications, and the slight abating of the battle for Hudaydah also relieved some of the sense of urgency regarding the resolution. The draft resolution was thus shelved.

After the Sweden consultations concluded in December, the UK reintroduced the draft resolution to the council with an updated text on the Stockholm Agreement, which it endorsed. The adopted text included points on ways to strengthen the economy and functioning of the CBY, and to carry out civil servant salary and pension payments. It called for the unhindered movement of goods and the reopening of Sana’a International Airport for commercial flights within an agreed mechanism. It also called on the parties to the conflict to comply with international law and to fulfil their obligations under international humanitarian law. The draft went through another round of tense negotiations following pressure from Saudi Arabia to exclude language related to humanitarian issues and obligations, accountability and independent investigations. The US also attempted to include a direct reference to Iran’s alleged violations of the arms embargo. After opposition from Russia and China, the US withdrew its demand for the reference to Iran in the text. The Security Council adopted Resolution 2451 on December 21, 2018.

On August 2, UN Special Envoy for Yemen Martin Griffiths briefs the UNSC about plans to bring the country’s belligerent parties together for peace consultations in Geneva the following month // Photo Credit: UN Photo/Manuel Elias

The New UN Special Envoy

The appointment of a new UN Special Envoy for Yemen helped to restart UN-led peace efforts in 2018, culminating in December in the first round of consultations between Yemen’s main warring parties in more than two years. Martin Griffiths officially took over the post on March 19, replacing Ismail Ould Cheikh Ahmed. During 2017, the latter had been unable to bring the parties to the negotiating table, while three previous rounds of negotiations under his lead had failed in 2015 and 2016. After his UN posting ended, Ould Cheikh Ahmed was appointed Minister of Foreign Affairs in his home country of Mauritania.

Where his predecessor came from the humanitarian sector, Griffiths brought experience in mediation. He had previously worked as an adviser to the UN Special Envoy for Syria and as the executive director of the European Institute of Peace in Brussels, and had visited Yemen in that capacity in October 2017. While his declared goal was a negotiated settlement between the main warring parties, in the process Griffiths also consulted with a wide variety of other Yemeni actors as well as regional and international stakeholders. This entailed the new Special Envoy engaging in intense shuttle diplomacy throughout 2018.

Building Relations with Houthi Leaders and the STC

Restoring the relationship of his office with the armed Houthi movement was a priority early on for the new UN Special Envoy. During his tenure, Ismail Ould Cheikh Ahmed had engendered increasing animosity from Houthi leaders, to the point that they had asked the UN secretary general not to renew his term in 2017, claiming he lacked neutrality. In June 2017, Houthi authorities barred the former Special Envoy from entering areas under their control. Griffiths, by contrast, visited Sana’a four times in 2018, where he met with Houthi officials.

The Special Envoy was also involved in conversations between Houthi and Saudi representatives in Oman. In March, senior Houthi negotiator and spokesman Mohammed Abdel Salam confirmed to the Sana’a Center that he was engaged in such an ongoing dialogue involving Griffiths and facilitated by the UK.

Besides representatives of the main warring parties, among other stakeholders Griffiths consulted with was the secessionist Southern Transitional Council (STC). Several times in 2018, STC leaders threatened to obstruct any peace agreement if they were not included in peace talks. Griffiths’ position was that the southern issue, while important, should be addressed after a negotiated settlement had been reached to end the war. According to Sana’a Center sources, Griffiths abandoned a planned trip to Aden and Mukalla in April after President Hadi and his government demanded that the Special Envoy not meet with the STC. Shortly after the UN Special Envoy instead met with STC leaders in Abu Dhabi and later in Jordan. In August, Griffiths’ office declared that the STC had affirmed its “readiness to participate positively in the political process”. In December, during the Sweden consultations, the STC said that its exclusion from the talks would perpetuate the cycle of conflict in Yemen.

Griffiths also met with officials from the General People’s Congress (GPC), the party founded by late former President Ali Abdullah Saleh, in 2018, including those still in Sana’a. Houthi authorities had obstructed various other diplomats from meeting with GPC members in visits to Sana’a during the year. In November Griffiths then met with tribal leaders and civil society representatives from the governorates of Marib and Hadramawt, on the sidelines of a workshop co-organized by the Sana’a Center and the Oxford Research Group as part of an ongoing track II initiative.

Hudaydah Proposal

When an assault against the Houthi-held port city of Hudaydah seemed imminent in early June, Griffiths convinced the Houthi leadership to accept a plan he put forward on the status of Hudaydah port. The anti-Houthi coalition, however, rejected the proposal and continued preparations for the military assault (see ‘Preparing for the Offensive’). Griffiths’ plan was similar to the agreement that would eventually be reached in Sweden; it proposed that Houthi authorities hand over control of the port to the UN, which would transfer revenues from import tariffs to the CBY to pay public sector salaries across the country. The Houthis had previously rejected a similar plan put forward by Griffiths’ predecessor in May 2017.

Griffiths continued his shuttle diplomacy throughout July, meeting with US, Saudi and other officials as well as the Houthi leadership in Sana’a, in an attempt to halt the military assault on Hudaydah.

Economic Consultations

Griffiths publicly attached greater importance to the Yemen economy in the second half of 2018, particularly after the rapid depreciation of the Yemeni rial in August and September, given its humanitarian repercussions (see ‘The Currency Crisis and the Threat of Famine’). In July, Griffiths met with the leadership and the board of the Sana’a-based CBY to discuss the reunification of the central bank, which has been split between competing headquarters on either side of the front line since September 2016. Griffiths and his team then sought but ultimately failed to organize UN-sponsored discussions to bring together central bank officials from Sana’a and Aden in Nairobi, Kenya. Although those discussions did not take place, the acknowledgement of the importance of the Yemeni economy to the humanitarian crisis demonstrated a far greater awareness of dynamics at play in the country than his predecessor’s, Ismail Ould Cheikh Ahmed.

While prior to the Sweden talks Griffiths had again stated that the economic file was a priority of the consultations, there was no breakthrough in this regard in Rimbo. Importantly, while the Houthi side had sent the governor of the Sana’a-based CBY and his deputy to the talks, the Yemeni government sent neither the governor of the Aden-based CBY nor the head of the government’s Economic Committee (see ‘Aden’s New CBY Governor, the Economic Committee and Import Regulation’).

The UK reportedly facilitated a minor breakthrough late in 2018 to support Griffiths’ efforts on the economic front. The UK had backed the envoy’s attempts to devise a framework for closer coordination between key economic stakeholders, including the governors of the rival central banks in Aden and Sana’a. In December, as peace talks in Sweden drew to a close, Mohammed Zammam, governor of the central bank in Aden, spoke with his counterpart in Sana’a, Mohammed Sayani, via video conference at the behest of London, several well-informed sources told the Sana’a Center Economic Unit.

Negotiations Framework

On June 18, the Special Envoy shared his framework for peace negotiations in a closed-door meeting of the UN Security Council. According to sources familiar with the proceedings who spoke with the Sana’a Center, a package of security and political arrangements included the establishment of a national military council in Yemen to oversee security arrangements and the handover of medium and heavy weapons by non-state actors. This was to be followed by the formation of a transitional government, led by an “agreed upon” prime minister. The transitional government would be in charge of restoring basic services, rebuilding state institutions, addressing issues specifically related to grievances in southern Yemen, implementing the outcomes of the National Dialogue Conference (NDC), and carrying out electoral reform and national reconciliation.

Despite going beyond previous UN-led peace plans, Griffiths’ framework for negotiations in many ways resembled the failed plans of his predecessor. These previous efforts included several contentious issues, among them the references to UNSC Resolution 2216, the GCC Initiative and the NDC outcomes as principles for peace talks. Generally, the framework seemed to turn possible outcomes of peace negotiations into preconditions for talks. Previous peace proposals failed over a similar approach, such as stipulating that Houthi forces surrender weapons and withdraw from captured areas before entering negotiations. Members of the Houthi leadership, in reaction to previous peace plans, had already demonstrated their resistance to surrendering their military leverage before negotiating their place in a future political arrangement.

Failure in Geneva, Success in Rimbo

On September 6, the first UN-led peace consultations since the collapse of UN-mediated peace talks in Kuwait in 2016 were scheduled in Geneva. The day before the consultations were to begin, Houthi representatives pulled out of the talks in a dispute over their travel arrangements to Switzerland. Houthi officials demanded to travel on an Omani plane and said they planned to transport injured fighters to Muscat for treatment. Meanwhile, Saudi Arabia insisted that the Houthi delegation should travel on a UN plane via Djibouti. Saudi officials later claimed that Houthi officials had planned to transport injured Iranian and Hezbollah fighters on the flight.

Given that the Saudi-led military coalition had blocked the Houthi delegation from returning to Yemen for three months after the peace talks in 2016, Houthi officials saw a return flight to Sana’a via Muscat as the most likely way to avoid a repeat. In addition, Houthi delegates were unnerved when the UN asked them to sign a liability waiver, interpreting this as a sign the UN could not guarantee their safe return, according to a source close to the delegation who spoke with the Sana’a Center. Ultimately, Griffiths was unable to resolve the impasse and the Houthi delegation did not travel.

In the absence of the Houthi representatives, the Special Envoy held meetings in Geneva with the Yemeni government delegation. They discussed the release of prisoners, the reopening of Sana’a International Airport, humanitarian aid and economic development. The envoy also met with a technical advisory group of Yemeni women, a number of ambassadors assigned to Yemen from the so-called “Group of 19” states, and ambassadors from the five permanent member states of the UN Security Council.

In early December, the UN Special Envoy finally succeeded in bringing representatives of the warring parties together for the first time in more than two years in Sweden. This time, the Saudi-led military coalition had agreed to Griffiths’ suggested logistical arrangements and Muscat had offered to facilitate the medical evacuation of some 50 injured Houthi fighters out of Sana’a, who were eventually flown out on an Ethiopian plane to Oman. When the Houthi delegation actually did leave Sana’a on December 4 aboard a Kuwaiti airliner, Griffiths himself was also on board – as well as the Kuwaiti ambassador to Yemen and the Swedish envoy to Yemen and Libya – as a reassurance for the Houthi officials that the Saudi-led military coalition, which controls Yemeni airspace, would not intercept the flight.

Hudaydah, the Heart of the Crisis

Overview: The Significance of Hudaydah

The port city of Hudaydah was at the center of escalating clashes and the deteriorating humanitarian crisis in 2018. Yemen has historically imported as much as 90 percent of its basic foodstuffs, while Hudaydah and nearby Saleef and Ras Issa ports are the point of entry for more than 70 percent of the country’s basic commodities, including staple foods, medical supplies and fuel. They were also the only ports controlled by the armed Houthi movement in 2018. UN agencies, humanitarian groups and many Yemeni experts have long said that there is no replacement for these ports in feeding large swathes of the country. This is due to these ports’ offloading capacity, their proximity to Yemen’s largest population centers, and the absence of frontlines between these ports and roughly 70 percent of the country’s population that live in Houthi-held areas.

Hudaydah City and its surroundings hold a population of more than 600,000, making it one of the country’s most densely populated areas, while the governorate is also among the poorest areas in Yemen. UN agencies, international NGOs and others had long warned that a military campaign to capture Hudaydah would exacerbate the humanitarian crisis in Yemen, given that it would likely inhibit commercial and humanitarian imports, causing prices to spike and preventing aid from reaching beneficiaries. A high number of civilian casualties was also expected in the event that fighting reached the city’s densely populated areas.

Representatives of the Saudi-led military coalition have throughout the conflict claimed that Iran has been smuggling arms to Houthi forces through Hudaydah port. The coalition has also criticized the UNVIM, the UN inspection mechanism set up in 2016 to address such concerns, as ineffective. However, a UN Panel of Experts report in January stated that it was highly unlikely arms were being transferred through Hudaydah, given that both the UN and the coalition were inspecting ships entering the port. The report further concluded that the coalition-imposed impediments to the delivery of commercial goods and humanitarian aid to Houthi-held areas amounted to a weaponization of the threat of mass starvation, which would constitute a war crime.

The coalition and the Yemeni government argued that the capture of Hudaydah port would cut a major source of income for the armed Houthi movement, which was imposing import tariffs on goods entering through the port, and would force the Houthi leaders to the negotiating table. However, many dismissed this claim as unlikely, given that Houthi forces could extort taxes on goods entering their territory through checkpoints anywhere, even if the frontlines were pushed inland from the coast. Meanwhile, Houthi forces remained firmly in control of the capital Sana’a.

Preparing for the Offensive

Saudi and UAE-backed local forces began pushing through Taiz governorate from the south toward Hudaydah City at the beginning of January, cutting Houthi supply lines between Taiz and Hudaydah. Shortly after, the Houthi leadership threatened to block international navigation in the Red Sea if the coalition-backed offensive along Yemen’s western coast continued. Houthi forces had previously carried out several attacks against vessels transiting near the Bab al-Mandab Strait using explosive-laden remote-controlled boats and repurposed anti-tank missiles, according to the UN Panel of Experts on Yemen report. The report also noted that the group had deployed improvised sea mines off the Red Sea Coast.

Through the spring of 2018 the coalition attempted to garner international support for the offensive on Hudaydah, including lobbying and media campaigns that highlighted the threat posed by the armed Houthi movement to international oil shipments passing through the Bab al-Mandab Strait.

In June, with an offensive against Hudaydah seemingly imminent, UN Special Envoy Martin Griffiths and UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Mark Lowcock urged the UN Security Council to support efforts to avert the military assault. Griffiths also notified the council of the Houthi leadership’s willingness to hand over the administration of Hudaydah port to UN observers.

In response, the Yemeni government, backed by the Saudi-led military coalition, took a more belligerent stance. Foreign Minister Khalid al-Yamani said that the “door of diplomacy” was closed to the armed Houthi movement, that the international community’s advocacy for peace talks would only prolong the war, and that the government refused to accept anything but the full withdrawal of Houthi forces from the entire Red Sea Coast. Following a Security Council meeting on June 11, the UAE, which took the lead in coordinating the offensive, gave the UN a 48-hour deadline to convince the Houthi leadership to withdraw its forces from Hudaydah.

The Battle For Hudaydah

On June 13, the Saudi-led military coalition launched “Operation Golden Victory”, with the goal of pushing Houthi forces out of Hudaydah City and taking control of the strategic Red Sea port. Western officials, speaking to the Sana’a Center in May, said Washington and London had given conditional approval for the coalition-backed offensive to take Hudaydah city, provided that the ports were not attacked. Previously, plans for an offensive in late 2016 and early 2017 had been derailed due to a lack of US backing and warnings from international organizations regarding the likelihood of a massive humanitarian fallout from such a campaign.

On June 13, the assault on Hudaydah began, spearheaded by the Giants Brigade, or al-Amaliqa, a 20,000-strong force of six brigades of whom the majority were tribal fighters from southern areas, along with several thousand Salafists. Fighting alongside al-Amaliqa were roughly a thousand members of the local Tihama Resistance and 4,000-6,000 troops of the National Resistance Forces, led by Tariq Saleh, the nephew of late former President Ali Abdullah Saleh (see ‘Red Sea Coast: Tariq Saleh Switches Sides’). The assault was supported by coalition aircraft and warships. Reports indicated the coalition-backed forces numbered 25,000-27,000 troops, facing between 5,000 and 8,000 Houthi fighters. Prior to the offensive, Houthi forces had brought in reinforcements from Sana’a, Dhamar and other areas of Hudaydah governorate. In an attempt to avoid being targeted by airstrikes, Houthi fighters began to use buses and taxis to travel to the city, rather than military convoys, according to Sana’a Center researchers.

On June 20, anti-Houthi troops, advancing from the city’s southern end against Houthi counterattacks, took over sections of Hudaydah airport. On July 1, the UAE declared a “pause” in the assault to give the UN Special Envoy time for negotiations. Houthi representatives decried this as a cover-up and accused the UAE of using the cessation to prepare for a new battle. Houthi forces continued to target coalition and pro-government forces using unmanned aerial vehicles and short-range missiles. Outside of Hudaydah port, the Saudi-led military coalition continued to launch airstrikes against Houthi positions.

Alongside warnings from international humanitarian organizations, an independent group of prominent Yemeni experts in various socio-economic fields issued a joint letter on July 17 warning of “catastrophic” consequences if the military conflict in Hudaydah continued to escalate. This group – known as Yemen’s Development Champions – included former ministers of transportation, oil and minerals, trade and industry, agriculture, civil service, and tourism, as well as leading economists, bankers, businessmen and academics.

By the end of July, the parties to the conflict continued to be at an impasse regarding Hudaydah. While Houthi officials had agreed in principle to turn over the port to UN administration, they insisted on maintaining control of Hudaydah City. The Saudi-led military coalition and the Yemeni government demanded that Houthi forces unconditionally hand over the port and withdraw from the city and governorate. On August 2, Griffiths said during a briefing at the UN Security Council that he was now convinced that the situation in Hudaydah governorate would have a better chance of being addressed within the context of a comprehensive political settlement.

Hostilities around the city decreased in the lead up to the planned peace consultations in Geneva at the beginning of September. After these talks failed to take place, the fighting escalated and anti-Houthi forces took control of the main roads east of the city that linked Hudaydah to Sana’a. This left the minor road north of Hudaydah to Hajjah governorate as the only open land route in and out of the city. A letter from the UAE to the UN Security Council president at the time claimed that a military victory in Hudaydah was critical to compel the Houthi leadership to re-engage in peace talks. The coalition also reported the deaths of several senior Houthi military figures in the fighting. At the end of October, after the offensive had stalled, Yemeni government military officials announced that 10,000 reinforcements were being deployed to Hudaydah.

On November 2, the coalition declared the launch of a new “large-scale offensive” in Hudaydah and fighting escalated again. Medical workers in hospitals around Hudaydah reported on November 12 that at least 150 people were killed during a 24-hour period after UAE-backed ground forces reached residential areas of the city. On November 14, the Saudi-led military coalition temporarily paused its assault. Days later, the armed Houthi movement declared that it would refrain from drone and missile attacks against coalition and Yemeni forces, though low-level fighting continued in parts of the city.

A ceasefire agreed at the Sweden talks came into effect on December 18 and remained in place as of the time of writing this report, with the demarcation line running roughly in the area of 50th Street. While each side has accused the other of ceasefire violations, these localized clashes had not derailed the Stockholm Agreement as of this writing. Sana’a Center observers witnessed minor breaches of the ceasefire in Hays, al-Tuhayta and al-Jarahi districts in Hudaydah governorate by Houthi forces using artillery fire, and shelling by coalition-backed forces on Houthi positions in al-Durayhimi district.

Source: Sana’a Center research // Graphic: Ghaidaa Alrashidy

Humanitarian and Economic Fallout

Soon after the assault on Hudaydah began, prices of basic goods and foodstuffs soared in the city, prompting panic buying. According to information gathered by Oxfam in early June, the price of a bag of rice increased by 350 percent, wheat by 50 percent and cooking oil by 40 percent. Oxfam also noted high transportation costs for those trying to flee the city.

As of June 24, the UN Office for the Coordination of Humanitarian Affairs (OCHA) reported that food had become scarce in Hudaydah City, amid soaring food prices and the closure of shops, bakeries, and restaurants. People were reported to be staying in their houses, with most lacking adequate food supplies. Electricity became unavailable in most parts of the city. Trenches dug by Houthi forces damaged the water and sewage system, which led to water shortages. The International Organization for Migration (IOM) registered over 455,000 displaced people from Hudaydah Governorate between June 1 and November 6.

Humanitarian and commercial imports continued to enter Hudaydah port but at a decreased frequency. With the ongoing hostilities, it became more difficult for civilians to flee, while access for humanitarian workers deteriorated. Among the obstacles were landmines planted by Houthi forces and roads destroyed by airstrikes or blocked by Houthi trenches and barricades. Some areas where people had been displaced or injured became inaccessible. Aid workers also faced difficulties in accessing humanitarian supplies warehoused in the city before the offensive. In November, the World Food Programme (WFP) said that Houthi forces had planted seven landmines inside its facility.

As a result of the battle in Hudaydah, the already strained health sector faced increased capacity problems. Seven health facilities in the governorate temporarily closed or suspended operations due to security concerns at the end of June, while others were forced to reduce operations after health personnel were displaced. Meanwhile, clashes and airstrikes in the vicinity of hospitals put patients and medical staff in extreme danger. Given the difficulties in accessing the area, reports of casualties were often hard to verify. (For details, see ‘Access Impediments’.)

Economic Developments

Overview: The Struggle for Financial and Monetary Control

The rapid depreciation of the Yemeni rial (YR) from July through October was the primary driver of the dramatic increase in food insecurity in the country in 2018 (see ‘The Currency Crisis and the Threat of Famine’). While various factors contributed to the currency’s collapse, chief among these was unregulated fuel importers purchasing foreign currency out of the local market to place orders abroad. Unlicensed money exchangers facilitated much of the fuel importers’ financial transactions outside the formal economy, while also playing a role themselves in destabilizing the YR. Amidst a relative spike in global oil prices through August and September, fuel importers’ market speculation helped propel the rial lower, while in September they acted as a cartel to artificially instigate a country-wide fuel shortage. This created a spike in the black market price of fuel, to which the importers sold their fuel to maximize profits (see ‘Factors Destablizing the Yemeni Rial’).

Also weighing on the value of the rial was an increased domestic money supply due to the Yemeni government printing new banknotes – rather than raising revenues – to cover the public sector wage bill, which has grown significantly in nominal terms during the conflict. Decreased remittances, due to thousands of Yemeni expat workers being expelled from Saudi Arabia or facing increased fees to stay in the kingdom, also contributed to the YR’s depreciation.

Among the factors that helped the rial recover value in November and December was the Aden-based Central Bank of Yemen’s (CBY) increased issuance of letters of credit to finance imports of basic commodities and fuel. The CBY had the foreign currency reserves to do so thanks to more than US$2 billion in deposits and grants Riyadh provided in 2018. In October, Saudi Arabia also began delivering a monthly $60 million fuel grant for power generation in Aden and surrounding governorates, helping to ease fuel importers’ demand for foreign currency. In renewed attempts to raise revenue from non-inflationary sources, the Aden-based CBY had the first successful public debt issuance since the conflict began, raising YR100 billion from Yemeni commercial and Islamic banks in November. The same month the CBY inked a US$500 million trade grant with the International Finance Corporation. During the summer the Yemeni government established an Economic Committee to advise and assist the Aden-based CBY. Through the fall the committee and the bank began taking measures to try and regulate imports and the exchange market, and to bring the money cycle back into the formal economy. (see ‘Stabilizing Influences on the Yemeni Currency and Economy’)

However, throughout the year the Sana’a-based CBY, under Houthi control, took steps to undermine the Yemeni government’s economic and monetary policy, such as banning new banknotes issued from Aden, and pressuring commercial banks not to cooperate with the Aden-based CBY. The country’s banks and businesses thus increasingly found themselves in a tug-of-war between the two sides. Houthi authorities also tightened their grip on business and financial flows in northern areas during 2018 (see ‘Competing Monetary Policies A Tale of Two Central Banks’ for more details).

Meanwhile, a year-long investigation by the Sana’a Center found that apparent adversaries on the battlefield were cooperating seamlessly on many fronts to profit from illicit oil and weapons sales in a flourishing war economy (see ‘War Economy Sees Cooperation Between Battlefield Adversaries’).

The Currency Crisis and the Threat of Famine

A major factor behind the threat of famine in 2018 was the depreciation in the value of Yemen’s domestic currency, the Yemeni rial (YR). Prior to the outbreak of the regional conflict in March 2015, Yemen imported up to 90 percent of its food supplies and had the lowest per-capita purchasing power in the Middle East. Changes in the Yemeni rial exchange rate thus have had profound implications for food security in the country.

In March 2015, when the Saudi-led military coalition began its intervention, the rial was trading at an official exchange rate of YR215 per US$1. Since then the rial’s decline has been largely characterized by long periods of stability or gradual decline, interspersed with sudden, brief periods of wild instability and rapid decline.

In the fourth quarter of 2017, the Yemeni rial began its first prolonged rapid depreciation of the conflict, dropping from a monthly average in October 2017 of YR392 per US$1 to as low as YR525 per US$1 in mid-January 2018. The announcement of a US$2 billion Saudi deposit at the Yemeni government-controlled central bank headquarters in Aden in January 2018 saw the currency rebound. The rial ended the month averaging YR454 per US$1 in parallel market trading.

By July it was trading at a monthly average of YR497 per US$1, a relatively manageable 9.5 percent loss in value over seven months. Over the next three months, however, the Yemeni currency entered its longest period of rapid, accelerating decline of the conflict, hitting an all-time low of more than YR800 per US$1 in early October. Over this period, UN agencies and humanitarian organizations voiced increasingly urgent warnings that Yemen was descending into widespread famine as basic commodity prices soared and millions more Yemenis lost the ability to afford food (see ‘A Deepening Food Security Crisis’). A short, two-day survey of 10 retailers of basic food commodities across Sana’a governorate conducted by the Sana’a Center at the end of August found that prices had already increased significantly by that point, relative to two months previous, with rice increasing 37 percent, vegetable oil 26 percent, wheat grain 25 percent, wheat flour 17 percent, and sugar 11 percent.

Sources: CBY, WFP, and Sanaa Center Economic Unit

The collapse of the currency in 2018 was the result of multiple factors building over the course of the war. These included the general economic collapse in the country, the cessation of oil exports – previously the country’s largest source of foreign currency – and a resultant shortage of foreign currency in the local market, and increased domestic currency supply through the printing of new rial banknotes to cover government spending. In addition, monetary policy and financial regulation in Yemen has, since September 2016, been divided between the Yemeni government-controlled Central Bank of Yemen (CBY) in Aden and the Houthi-controlled CBY in Sana’a. This has allowed speculative market factors to bring increasing volatility to bear on the exchange rate; in particular, unregulated fuel importers’ demand for foreign currency is widely seen as the primary factor behind the YR’s accelerated slide in value between July and October 2018. Weak regulatory enforcement over money exchange outlets also contributed to the rial’s instability in the second half of 2018.

Yemen’s currency recovered somewhat toward the end of 2018. In December, the rial was trading between YR480 to YR530 per US$1, similar to the range it had traded in prior to the collapse that began in July. On December 31, the rial was trading at roughly YR525 per US$1 in Sana’a and YR530 per US$1 in Aden. Central to the currency’s recovery were Saudi foreign currency deposits at the Aden-based CBY, as well as fuel grants from Riyadh to areas nominally controlled by the Yemeni government. The Yemeni government-appointed Economic Committee, in collaboration with the Aden-based CBY, used the Saudi backing to finance imports and implement currency stabilization measures in November and December. As December ended, prices for basic commodities had decreased by an average of 21 percent (relative to October) and fuel prices had dropped between 18-35 percent (relative to November) depending on the governorate.

On current trajectories, the Sana’a Center Economic Unit forecasts that the rial will remain relatively stable within a fluctuation range of 20 percent throughout the first half of 2019. This projection is based on the fact that the Aden-based central bank had, as of January 1, 2019, foreign currency reserves of US$2.7 billion on hand, a sufficient amount to finance imports and protect the value of the rial over the next six months.

Of continuing concern as 2019 begins, however, are the disparate monetary policies between northern and southern areas of the country, and the warring parties’ demonstrated willingness to try and leverage fiscal and economic mechanisms to gain advantage over their rivals. This will continue to threaten the sustainability of any recovery in the currency or economy generally.

Food and Fuel Price Spikes Slow to Recede

Toward the end of 2018, and with the value of the rial improving, both the internationally recognized Yemeni government and the Houthi authorities issued lists stipulating maximum prices for various commodities, in an effort to contain the growing threat of famine, and threatened to crack down on violators. But in the absence of proper government oversight and effective regulatory bodies, many traders did not lower prices to levels proportional to the rial’s recovery. The Sana’a Center learned at the end of November that many retailers in Sana’a were still selling commodities as if they had been purchased at October’s record low exchange rate of YR800 per US$1.

In December, the Sana’a Center Economic Unit conducted a survey in the cities of Sana’a and Aden on average retail prices for basic commodities. The survey revealed that on average prices for sugar, wheat flour, wheat grain and vegetable oil in Sana’a and Aden decreased in December by 21 percent relative to October.

Sources: WFP and Sanaa Center Economic Unit surveys for 2018

December also witnessed a drop in the price of fuel derivatives in both Houthi- and government-controlled areas. Compared to prices in November, the prices for one liter of petrol and diesel in December were reduced on average almost 23 percent and 18 percent, respectively, in areas controlled by the armed Houthi movement. Reductions in fuel prices ranged between 20 percent and 35 percent in the government-affiliated governorates of Hadramawt and Aden (see graph below for details).

Factors Destabilizing the Yemeni Rial

Unregulated Fuel Importers and Unlicensed Money Exchangers

A Yemeni Banking Association survey, published on October 11, 2018, found a consensus opinion among Yemen’s top bankers that the primary instigator of the rial’s depreciation was fuel importers’ increased demand for foreign currency. Between mid-August and the end of September 2018, there was a relatively sustained spike in global oil prices, with the benchmark West Texas Intermediate crude rising roughly 13 percent from some US$65 per barrel to US$73.25. During this period, the Sana’a Center Economic Unit assessment is that fuel importers in Yemen, anticipating further oil price rises, began buying US$ out of the local market with which to place new rush orders.

Beginning in mid-September, Yemen then became gripped by fuel shortages, with licensed fueling stations closing en masse in many areas and black market traders stepping up to sell fuel at significant markups from the regulated prices. A Sana’a Center Economic Unit survey covering all Yemeni governorates found price increases of available petrol averaged 130 percent across the country for the last two weeks of September relative to average August prices. Available evidence indicated that fuel traders acted as a cartel in collectively halting fuel sales to official retail outlets in September. The subsequent shortage allowed traders to sell to the black market for significantly more profit, offsetting the anticipated increases in import costs due to rising global oil prices and anticipated profit losses due to the depreciating local currency.

Sources: WFP and Sanaa Center Economic Unit surveys for 2018

Unlicensed money exchangers, which have proliferated over the course of the conflict, have abetted the fuel importers’ currency trading and international financial transactions outside the formal economy, while also acting as currency destabilizers in their own right. The general collapse of state regulation during the conflict, and in particular that which followed the schism of the CBY in 2016, allowed an estimated 800 unlicensed money exchangers to enter the market between 2015-2017, according to a confidential banking sector market study made available to the Sana’a Center. The migration of financial flows to the informal economy has also been spurred by a prolonged liquidity crisis in the commercial banking sector, as well as Yemen’s designation as “high risk,” which prevented the country’s commercial banks from being able to carry out international transactions.

Often, networks of unlicensed Yemeni money exchangers have been affiliated with larger, licensed and more established firms. While overall, unlicensed firms have handled far less volume than the top 10 largest licensed firms, the former’s attempts to capture market share through aggressive pricing has had oversized influence on the rial exchange rate. Several campaigns to crack down on unlicensed exchangers both by the Yemeni government and the Houthi authorities had little impact in 2018, with many simply reopening shortly after being closed down.

Increased Money Supply

With the general economic collapse and secession of hydrocarbon exports that accompanied the conflict, public revenues also plummeted. This has forced the Yemeni government to radically reduce spending on all budget items except public sector salaries. Public spending, however, has still been greater than revenues since 2015. Indeed, the total public salary bill has increased substantially in areas under Yemeni government control, where the government has enlisted new security and military personnel and doubled salary disbursements to incentivize new recruits.

In response, the Government of Yemen has at various times ordered the central bank to print new rial banknotes to cover expenses. According to the World Bank, the total money supply in Yemen grew 53 percent in 2018. This enlarging of the domestic money supply, in an environment of declining economic activity and scarce foreign currency, has in turn placed downward pressure on the value of the rial on the exchange market. The injection of new banknotes into the economy in August almost certainly played a role in the subsequent rapid devaluation of the rial, and contributed to the dramatic increase in currency circulation outside commercial banks, as the World Bank has noted. It estimated that currency circulation outside the formal banking sector grew more than 100 percent between 2014 and 2017, from YR810.9 billion in 2014 to YR1.67 trillion by the end of 2017.

During the recent currency collapse the Yemeni government also promised to increase spending, adding more speculative pressure on the YR. In August, demonstrations began in Aden with protesters demanding the government address soaring prices. The protests continued into September, spreading to Hadramawt, Lahj, Abyan and al-Dhalea governorates. In Aden, protesters blocked roads with burning tires and barriers, while retail stores and service outlets closed as part of a civil disobedience campaign. In an attempt to quell the dissent, the Yemeni government announced in September that it would raise civil servant salaries by 30 percent. Protests also occurred in Houthi-controlled areas, including Sana’a, though Houthi security forces quickly quashed them.

Decreasing Remittances

According to the CBY’s 2014 annual report, money sent back home from Yemenis working abroad – primarily in Saudi Arabia – accounted for roughly 30 percent of foreign currency inflows prior to the war. According to World Bank estimates, remittance inflows from expat workers remained relatively constant through 2017, and with the sharp decline in energy exports, became the country’s largest source of foreign currency.

In recent years, however, Riyadh has intensified its efforts to restrict foreign access to its labor market as part of a so-called “Saudization” of the economy, part of a larger reform program referred to as Vision 2030. In early February 2018, the Saudi Ministry of Labor and Social Development issued another in an ongoing series of nationalization decrees. Effective September 2018, and to be implemented between then and January 2019, the decree aimed to ban foreign workers from 12 types of employment. The Saudi government also increased the costs of visas and work permits for expats.

In early 2018, reports emerged about Saudi authorities undertaking large-scale deportations of Yemeni workers without legal status. Riyadh announced that it had arrested hundreds of thousands of foreign workers lacking the necessary permits and was beginning deportation proceedings. The cumulative impact of Saudi nationalization policies on Yemeni expatriate laborers in the kingdom was unclear as of this writing. However, it is highly likely their number has decreased, with an accompanying reduction in remittances. Furthermore, preliminary Sana’a Center research regarding expats in the Saudi labor market suggests that as many as 70 percent of Yemeni workers could lose their current jobs by 2020 if the Saudization policies continue to be implemented. This would have dire impacts for families and communities in Yemen that depend on these remittances for income, as well as for the country at large in the loss of foreign currency flows into the local market.

Stabilizing Influences on the Yemeni Currency and Economy

More Than US$2 Billion in Saudi Deposits and Fuel Grants

On January 17, 2018, Saudi Arabia announced it would deposit US$2 billion at the CBY in Aden to support Yemen’s domestic currency. The immediate stabilizing effect this had against market speculation began to weaken, however, after prolonged negotiations between Saudi and Yemeni officials regarding the deployment of the funds. A mechanism was finally agreed upon in July by which to finance basic commodity imports, however the process for traders to apply was generally regarded as too cumbersome and the wait time for approval excessive. The central bank’s first batch of letters of credit, issued on July 31, amounted to just US$20.4 million; it is common market understanding in Yemen that interventions below US$100 million do not noticeably impact the money supply. The market thus began to lose faith in the impact of the Saudi deposit, putting downward pressure on the rial and contributing to its slide through the summer and into the fall.

In October, after the Yemeni rial reached record lows in value, several measures were instituted to help spur a moderate recovery. First, the Saudi government announced a US$200 million grant to the Aden-based CBY at the beginning of the month. The central bank in Aden then approved US$170 million out of the US$2 billion Saudi deposit to finance the importation of basic foodstuffs later in the month. Finally, an appreciation in the rial followed the arrival of a Saudi oil tanker to Aden carrying US$60 million in fuel. This was the first delivery of a planned monthly fuel grant by Riyadh, the intent of which was to support power generation in areas controlled by the Yemeni government and decrease fuel importers’ demand for foreign currency. Also lessening fuel importers’ demands on the currency market was the downward trend in global oil prices since October.

On November 3, the central bank announced it was finalizing a third round of basic import financing worth US$170 million, while Riyadh delivered the second US$60 million in fuel grants the same month. These supports, in combination with other steps taken by the Aden-based central bank, contributed to a significant recovery of the Yemeni currency toward the end of 2018. On December 8, Aden-based CBY Governor Mohammad Zammam announced that a total of US$356 million had been withdrawn from the US$2 billion Saudi deposit to fund imports. The Aden-based central bank’s total foreign currency reserves thus stood at US$2.7 billion as the year ended.

Limited Gains in Oil Exports

Just prior to the current conflict, oil exports accounted for 65 percent of foreign currency entering Yemen, according to the CBY’s 2014 annual report. These exports halted completely in 2015, with the Saudi-led military coalition intervention, al-Qaeda in the Arabian Peninsula (AQAP) occupying export terminals along the southern coast, and Houthi forces seizing control of export terminals on the western coast. In 2016, after UAE-backed forces expelled AQAP from the city of Mukalla and its environs, limited but regular exports resumed out of Hadramawt governorate. Yemen’s PetroMasila has handled production in Hadramawt, with exports being made to the Anglo-Swiss company Glencore.

In October 2018, Aden-based CBY Governor Mohammed Zammam stated that revenues from PetroMasila’s facilities were estimated at US$150 million every two months. According to this statement, the net revenue to the Yemeni government was $50 million, which was being deposited at the Aden-based CBY, while $50 million was allocated to cover power generation in Aden and neighboring governorates, $30 million went to PetroMasila’s operational budget, and $20 million to the Hadramawt local authority.

Meanwhile, the Austrian oil company OMV resumed limited capacity operations in Shabwa in April 2018. In August 2018, for the first time since the outbreak of the war, the government announced the export of oil from the governorate. According to a revenue sharing agreement, similar to previous ones the government made with Marib and Hadramawt governorates, Shabwa would receive 20 percent of the revenues. However, oil exports remained limited compared to pre-conflict totals. In early December 2018, the Yemeni Company for Oil Investments announced that 600,000 barrels of oil were exported from Shabwa’s Alnshima port – only the fourth such shipment since OMV restarted production in the governorate.

Aden’s New CBY Governor, the Economic Committee and Import Regulation

Monasser al-Quaiti, the former governor of the Aden-based CBY, was replaced in February 2018. Under al-Quaiti, the Aden-based central bank printed more than YR1 trillion in banknotes over an 18-month period, adding substantial downward pressure on the rial’s value. Sana’a Center sources indicated that the decision was undertaken largely in response to al-Quaiti’s inability to establish a functioning CBY headquarters in Aden. Under the new leadership of Governor Mohammad Zammam, the Aden-based central bank canceled contracts with the Russian and German banknote printing companies Goznak and Giesecke+Devrient, respectively. This was part of a larger policy shift Zammam began to develop and implement at the Aden-based central bank to tackle the currency crisis.

In August, the Yemeni government then established a new Economic Committee to collaborate with the Aden-based CBY on economic stabilization measures. Primary among these were combating the rapid depreciation of the rial and regulating commercial imports in a way that would shift financial flows back into the formal economy. The Economic Committee, headed by the Chairman of CAC Bank International Hafedh Mayad, included representatives from the Aden-based central bank, the banking sector, the chambers of commerce and industry, and money exchange institutions.

In September, the Yemeni government announced a new range of policies to facilitate the import of basic foods and address the demand for foreign currency. Among the new measures was Decree 75, which aimed to regulate fuel and basic commodity imports while curbing the influence of informal economic networks and unlicensed money exchangers. Decree 75 required fuel importers to be approved by the Economic Committee to be eligible for import financing from the Aden-based central bank. The Aden CBY facilitated access to foreign currency for approved importers mostly through the US$2 billion Saudi deposit.

The Economic Committee announced it was postponing the regulation of food imports through Decree 75 in October, however, over fears that restricting food importers to only those who met its financing criteria would decrease overall food imports and exacerbate the country’s food security crisis. The central bank continued to support approved basic commodity imports for approved traders, while also attempting to institute new financing and controls for fuel importation.

Toward the end of 2018, importers increasingly opened letters of credit at the Aden-based CBY to access foreign currency, rather than relying on money exchangers. The central bank provided food importers incentives for opening letters of credit by offering a preferential exchange rate (YR440 per US$1 as of December 2018) to import six essential food commodities: wheat, rice, sugar, cooking oil, corn and milk. The price of US$1 in the parallel markets at the time was YR490-500.

Restarting Public Debt Issuance and International Grants

Other factors supporting the rial’s recovery toward the end of 2018 were successful efforts to raise Yemeni government revenue from non-inflationary sources. This included the first successful issuance of domestic debt since the conflict began. According to well-placed Sana’a Center sources within the banking sector, the Aden-based central bank sold YR100 billion in debt to a group of Yemeni commercial and Islamic banks in November. The same month the Aden-based central bank reached an agreement with the International Finance Corporation to coordinate a trade grant of US$500 million from several donors, according the same sources. To be eligible to access the funds, banks must undergo a comprehensive assessment of their governance and compliance practices. Furthermore, CBY Aden governor Mohammed Zammam announced that the Aden-based central bank was awaiting further grants totaling US$3 billion promised by international donors. Former central bank governor Mohamed bin Humam had told the Sana’a Center in September that an estimated US$4 billion was likely required to stabilize the currency.

Following an agreement with the Saudi Arabian Monetary Agency, in 2019 the Aden-based central bank is also set to facilitate the transfer of commercial banks’ foreign cash holdings through Saudi Arabia. Yemeni banks have previously been unable to move their cash holdings of foreign currencies to accounts abroad. Enabling these transfers should further assist the Aden-based CBY in fostering monetary stability and channeling import financing through the formal economy.

Sana’a in August: People buy food and gifts in a market in Sana’a in preparation for the Muslim holiday of Eid al-Adha // Photo Credit: Thy-Yazen

Competing Monetary Policies: A Tale of Two Central Banks

Since September 2016, two competing central banks have been operating in Yemen, one in the Houthi-controlled capital and one in the government’s temporary capital of Aden. When President Hadi ordered the relocation of the CBY headquarters from Sana’a to Aden in 2016, he did so without first securing the human, financial, data and infrastructural resources necessary for the new central bank headquarters to operate. Thus, the Sana’a-based CBY retained its experienced staff, data indexes, physical infrastructure and financial connections to the country’s biggest banks and businesses – given that most are headquartered in the capital – but had little in the way of financial resources, was no longer recognized internationally, could not facilitate international transfers, and so could not carry out meaningful monetary policy. Meanwhile, the Aden-based CBY, though recognized as Yemen’s official monetary agency, could carry out almost none of the functions expected of a central bank.

Fragmentation within Yemeni government-held areas in Yemen added to the new CBY’s challenges. For example, the local branch of the central bank in Marib, an area that has been under the nominal control of the Yemeni government, refused to send local revenues from oil and gas sales to the Aden branch (see ‘Marib: Islah, Tribes and the Saudis United in Federalism’).

The process of building the Aden-based CBY’s capacities to perform the functions of a central bank has been slow and arduous. Only in 2018 had the bank begun to assert itself and attempt to implement consequential policies. Simultaneously, however, the Sana’a-based CBY and other Houthi authorities have regularly sought to undermine these new economic edicts coming out of Aden

Houthi Authorities Challenge Government Policies

Through much of 2018, the Houthi authorities sought to undermine policies set by the Yemeni government and its central bank. For instance, when the Aden-based CBY began distributing new YR500 banknotes in 2017 and YR1,000 banknotes in February 2018, Houthi authorities banned them in territories under their control. In 2018, the Houthi authorities’ campaigns to enforce these bans intensified. Houthi National Security Bureau officers conducted major inspection campaigns on money exchange shops, commercial banks, restaurants, and businesses to check if they were dealing with the new banknotes from the Aden-based CBY.

In August, the Banking Supervision Sector of the Sana’a-based central bank warned licensed exchangers against either selling foreign currency to, or buying foreign currency from, areas in Yemen outside of Houthi control. Given the more acute shortage of rial banknotes in Houthi areas relative to government areas, the rial within Houthi-held territory was worth about YR5 more per US$1 as of December 2018. The circular also warned money exchange firms against receiving transfers from government-controlled areas in excess of YR5 million without advance approval from the Sana’a-based CBY.

When the government issued Decree 75, with new regulations regarding fuel imports that would have disqualified importers close to the Houthi authorities, the latter threatened commercial banks in Sana’a with reprisals, including the imprisonment of senior staff, if they abided by the decree. Since all but one of Yemen’s 17 commercial banks are headquartered in Sana’a, the Houthi authorities possessed significant leverage to pressure them.

In early November, the Sana’a-based central bank ordered commercial banks to use checks instead of cash to cover letters of credit for imports. This order contradicted the decision by the Aden-based central bank, which mandated cash deposits for letters of credit to be issued. The move by Houthi authorities was an attempt to prevent the transfer of physical cash liquidity to government-held areas. In December, the Houthi authorities issued new regulations banning banks from transferring amounts exceeding YR450,000 (equivalent to roughly US$900 in December 2018) from Sana’a to Aden without prior approval from the Sana’a-based central bank. However, sources in the banking sector report that money was still being transferred via informal networks.

Houthi Authorities Strengthen Their Grip Over the Economy

In mid-October, the Houthi government officially appointed Mohammed al-Sayani as the governor of the Sana’a-based CBY. Sayani previously held the post of deputy governor but had been de facto head of operations at the Sana’a-based central bank since the split. The appointment was a symbolic attempt by the Houthi authorities to establish an independent monetary authority in areas under their control and deny legitimacy to the Aden-based central bank.

In 2018, Houthi authorities strived to both raise revenues and exercise greater control over the local economy overall. At the beginning of the year, they ordered importers of essential goods to interact exclusively with commercial bank branches in their territories. The banks in turn were instructed to work with local money exchangers to send foreign currency abroad. Later, they also demanded that traders deposit their revenues from essential commodity sales in an account held at CAC Bank in Sana’a. The measures were meant to help Houthi authorities extract customs and taxes. In May, the Houthi authorities ordered the Sana’a-based CBY to seize the financial assets of late former President Ali Abdullah Saleh. They also imposed new fees on private sector electricity providers, which led to an increase in the price of electricity tariffs.

In June, the Houthi authorities implemented an aggressive campaign to collect taxes and customs from traders, businesses, companies and shopping malls. One of the biggest shopping malls in the country was closed down after its owner refused to pay more than YR500 million in taxes.

Between 2015 and early 2018, fuel imports regulations previously governed by the state-run Yemen Petroleum Company (YPC) were liberalized in Houthi-held territory. This allowed a number of new fuel importers on good terms with the Houthi authorities to enter the market and quickly gain market share. In July 2018, with exclusive control over state institutions in their areas, Houthi authorities ordered importers to sell fuel only to the Houthi-run YPC. This allowed the Houthi authorities to attain a near monopoly over fuel distribution in northern Yemen.

Telecom Companies Caught in Sana’a-Aden Rivalry

Two of Yemen’s premier telecommunication companies, MTN (Yemen) and Sabofone, fell victim to the tug-of-war between Houthi authorities and the Yemeni government in 2018.

In mid-2018, the Houthis filed a US$190 million tax claim against MTN, reneging on agreements the company had reached with late former President Ali Abdullah Saleh, and threatening to take over the company if it refused to pay. They later ordered the partial seizure of the telecom company’s assets in June, claiming that the multinational owed YR11 billion in unpaid dues. MTN settled with the Sana’a-based tax authority in November, paying YR11.2 billion in back taxes. Meanwhile, Houthi authorities also demanded that Sabofone pay US$300 million in connection to a nine-year tax exemption the company had obtained in 2001.

The telecoms giants also encountered difficulties dealing with the Yemeni government, which reportedly demanded that MTN and Sabofone pay what essentially amounted to duplicate service agreements to those signed with the authorities in Sana’a. During negotiations, the government reportedly refused to release telecommunications equipment seized from both companies, seemingly using it as leverage.

War Economy Sees Cooperation Between Battlefield Adversaries

With the war in Yemen entering its fifth year as of this writing, a war economy is flourishing and has enabled a new cadre of profiteers. The fragmentation of the country into adversarial spaces has aided the rise of a new business elite. A year-long investigation by the Sana’a Center found that nominal adversaries in the conflict actively collaborated to maximize profits in this war economy. Yemen’s nouveaux riches have operated through complex and fluid networks across frontlines, with these networks sustained by arms and funding from Saudi Arabia and the UAE to groups in Yemen fighting the armed Houthi movement. The networks included military commanders, businessmen, security officials controlling checkpoints, money exchangers, bankers and local militias – both among Houthi forces and various government-affiliated groups.

For example, senior anti-Houthi military commanders in Yemen on the Saudi or Emirati payrolls have regularly inflated the number of soldiers under their authority in order to receive surplus salaries and weapons from their patron. The surplus weapons have then been sold on, often to the same Houthi forces that these commanders were meant to be fighting.

The web of Yemen’s economy spread throughout the region. Cheap, low quality Iranian fuel has regularly been imported via the UAE or Oman through Hudaydah port, and then sold by Houthi-affiliated businesses in the north at significant markups. Importantly, those profiting from the war economy – including many high-level decision makers on all sides – have little personal interest in seeing the conflict end, and thus pose a risk of trying to spoil any potential peace process. (For details, see the full Sana’a Center report: Corruption in Yemen’s War Economy)

Macroeconomic Overview*

*Even prior to the ongoing conflict, macroeconomic assessments in Yemen were fraught with challenges due to available data often being incomplete or inadequate. This regularly limited the accuracy and reliability of the figures produced from this data. Since the onset of the current conflict, the collapse of state institutions and the division of the country across frontlines, the collection of the data necessary for macroeconomic assessment has become even more difficult. Thus, all macroeconomic figures produced during the conflict should properly be understood as rough indicators rather than precise measurements.

A World Bank report from the fall of 2018 forecasted that the Yemeni economy would contract 2.6 percent in 2018. This comes subsequent to roughly a 40 percent decline in Yemen’s gross domestic product from 2015 to 2017, according to Yemen’s Ministry of Planning and International Cooperation.

The same World Bank report noted that while inflation was somewhat contained in 2017, due in part to the suspension of public sector salary payments, in 2018 it rose markedly by more than 40 percent. This was largely driven by the devaluation of the Yemeni currency. Given that the World Bank report was published in the fall of 2018 and could not have taken into account the rial’s continued rapid depreciation during the fourth quarter of 2018, it likely underestimated the extent of inflation for the year.

The rising inflation was also driven by the expansive monetary policy of the Aden-based CBY, with the Yemeni government seeking to fund the public budget deficit through the printing and injection of new banknotes into the economy. According to well established and credible sources working in the relevant public institutions under the control of the Yemeni government, the public budget deficit is estimated at YR660 billion in 2018, with this almost fully funded through over-drafting the government’s general account at the Aden-based CBY.

The World Bank also estimated that the public debt ratio rose to 75 percent of GDP in 2017, with roughly 49.4 percent being domestic public debt and 25.1 percent external public debt. At the time the report was published, foreign debt obligations had not been serviced since May 2016 (excluding obligations to the International Monetary Fund and the World Bank Group’s International Development Association), and accumulated arrears (unpaid goods and services, salaries and debt) since 2015 were estimated at around US$3 billion. On trade, Yemen held a current account deficit of approximately 9 percent of GDP in 2018.

Between 2014 and 2017 total imports contracted roughly 46 percent from US$12.3 billion to US$6.6 billion, though the World Bank projected imports for 2018 would increase to US$9.2 billion, to almost 75 percent of what they were before the conflict began. The report noted that if the violence in Yemen was contained moving forward, the country’s GDP could be expected to see positive growth with the gradual resumption of hydrocarbon exports.

The Yemeni Government’s “Austerity Budget”

On January 21, then Prime Minister Ahmed bin Dagher unveiled Yemen’s 2018 budget – the first since 2014. The budget projected YR1.46 trillion in spending with a YR482 billion deficit; given the exchange rate at the time, this equated to roughly US$3.32 billion in spending with a US$1.09 billion budget deficit. Speaking to reporters in Aden, bin Dagher described it as an “austerity budget” that “includes salaries for the military and civilians in 12 provinces… Salaries in Houthi-dominated areas will be limited to the education and health sectors”.

However, most public sector employees in Houthi-controlled areas did not receive any salaries from Aden in 2018, with the exception of those in the governorates of Taiz, al-Jawf, al-Bayda, and al-Dhalea. Public sector workers in government areas also continued to experience difficulties in obtaining consistent salary payments from the Aden-based CBY. The exception was anti-Houthi military and security personnel, who were generally bankrolled directly by Saudi Arabia and the UAE.

The total actual government spending reached some YR900 billion at the end of September 2018, of which 60 percent was allocated to pay the wage costs. Of the rest, 17 percent was spent on operational expenses of central government, 14 percent on social benefits and the remaining percentage was spent on the acquisition of assets and payment of liabilities.

In November and December 2018, for the first time since 2016, retirees across the entire country received state pensions.

Aden in November: Flags are raised at the celebration of Independence Day, commemorating South Yemen’s independence from British rule. Flags displayed (from left): Security Belt Forces, Saudi Arabia, South Yemen, UAE, Southern Transitional Council. The flag of the Yemeni Republic is notably absent // Photo Credit: Ahmed Shihab al-Qadi

Political Developments

Overview: Fragmentation in South, Hardliners Ascend in North

Through 2018, the political fragmentation of Yemen continued. Tensions between the various groups that make up the anti-Houthi alliance came to the fore as power struggles erupted between nominal allies in areas ostensibly under the control of the internationally recognized Yemeni government. Southern secessionists flexed their military muscles in Aden, the temporary capital of President Abdo Rabbu Mansour Hadi’s government. The Islah party acted with increasing autonomy in Taiz after forcibly ousting rivals. Local power centers were also evident in Marib, Hadramawt and Mahra, exposing the sparse authority the Yemeni government has in areas it supposedly controls. Hadi’s government operated mostly from Riyadh throughout 2018, as it has since 2015.

Foreign interference exacerbated conflicts within the anti-Houthi alliance in 2018, with coalition powers Saudi Arabia and the UAE at times backing competing local groups. In Aden for example, Riyadh supported forces loyal to President Hadi, while Abu Dhabi armed and funded southern secessionists and Salafi groups that challenged the Yemeni president. In general, the UAE continued to expand its influence along Yemen’s coastal areas, whereas Saudi Arabia focused on securing areas nearer its border with Yemen.

The strained relationship between Hadi and the UAE saw marked periods of intense deterioration in 2018. The scope of Emirati control over security forces in Aden and the UAE’s growing zone of influence along Yemen’s coast and ports were already sources of tension with the Yemeni president. The UAE also continued to support forces opposed to the Islah party, an ally of Hadi’s government, due to the party’s ties to the regional Muslim Brotherhood, which the UAE vehemently opposes.

In 2018, for the first time, tensions escalated into an open spat between the Hadi government and the UAE over the island of Socotra. In May, the Yemeni government filed a complaint at the UN Security Council over the Emirati military presence on the UNESCO-protected island, accusing Abu Dhabi of violating Yemen’s sovereignty. Meanwhile, a regional geopolitical power struggle reached the previously placid eastern governorate of Mahra, where a local protest movement against the presence of Saudi troops emerged, backed by neighboring Oman.

Tensions within the anti-Houthi alliance de-escalated over the summer of 2018 with the launch of the battle for Hudaydah, as rivals closed ranks and attempted to put divisions aside. Increased international attention on Yemen toward the end of the year brought pressure on the coalition to defend the legitimacy of its military intervention and to act more cautiously. Despite their different approaches in Yemen, Saudi Arabia and the UAE eventually addressed the rising conflicts between their respective local allies. The UAE and the Islah party took steps toward reconciliation, capped by Islah leaders traveling to Abu Dhabi in November to meet with the de facto leader of the Emirates, Abu Dhabi’s Crown Prince Mohammed bin Zayed. Political differences and distrust between the UAE and Islah remained, but tensions had eased by the end of 2018.

Meanwhile, President Hadi sacked Prime Minister Ahmed Obaid bin Dagher in October. While officially citing corruption allegations as the reason, it is far more likely that Hadi fired bin Dagher to eliminate him as competition to lead the General People’s Congress (GPC) party. The GPC has been fractured and leaderless since Houthi forces killed former President Ali Abdullah Saleh in late 2017. Hadi selected Maeen Abdul Malik, a technocrat with a relatively clean reputation, as bin Dagher’s replacement. Also in the second half of 2018, Hadi’s health status became a growing concern after he collapsed in the Egyptian parliament in August. The Yemeni president, who has a heart condition, visited the Cleveland Clinic in the US several times in the months following.

In northern Yemen, hardliners in the armed Houthi movement assumed increasing authority in 2018. This followed the dissolution of the group’s alliance with the GPC in 2017 and the UAE’s assassination of the president of the Houthi-controlled Supreme Political Council, Saleh Ali al-Samad, in April 2018. The rise of the hardliners brought with it intensified oppression and a heightened climate of fear for people living in Houthi-held areas. This included increased persecution of minorities, bans of civil society groups, arrest campaigns, expanded extortion, forced conscription, and heavy-handed attempts at religious indoctrination.

Cracks Within the Anti-Houthi Alliance

Aden: Hadi, Islah vs. UAE-backed Secessionists, Salafis

President Hadi angered many in Aden in 2017 when he sacked two popular politicians, former governor Aidarous al-Zubaidi and former minister Hani Bin Breik. Shortly thereafter these two established and took leading positions in the secessionist Southern Transitional Council (STC), with support and funding from Abu Dhabi. By early January 2018, STC leader al-Zubaidi was openly accusing the Hadi government of corruption and demanding the resignation of the prime minister and his cabinet.

Later in the month Yemeni government forces prevented STC supporters from holding a mass demonstration in Aden. This led to STC-affiliated forces clashing with the Presidential Protection Forces and storming key government buildings and military sites on January 28. The International Committee of the Red Cross reported that at least 36 people were killed and 185 injured in the fighting. Both sides fired artillery within the city. Pro-Hadi forces were effectively routed city-wide, save for those holding out in the besieged presidential palace.

In many ways the STC is useful for Abu Dhabi, in particular as a means to pressure Hadi, to counter the clout of Islah, to protect its expanding zones of influence along the Yemeni coast, and to back counter-terrorism operations against Al-Qaeda in the Arabian Peninsula (AQAP) and the so-called ‘Islamic State’ group, or Daesh. UAE leaders have publicly remained relatively ambiguous regarding the STC’s secessionist ambitions for South Yemen. Following the January clashes in Aden, however, Riyadh made clear indications that it would not tolerate a coup by the STC.

At the initiative of Riyadh, Saudi Arabia and the UAE sent a security delegation to Aden to intervene and imposed a ceasefire on February 1. The Security Belt Forces, also UAE-backed and closely tied to the STC, had taken over several military posts from the Presidential Protection Forces. After the ceasefire, the Giants Brigades (al-Amaliqa), a southern force considered a “neutral” third party, moved in and took control of some of these posts. While Hadi’s forces were later permitted to return to these posts, through the rest of 2018 they were unable to exert meaningful control in Aden, with the balance of power in the city clearly favoring the UAE-backed Security Belt Forces. Meanwhile, the Giants Brigade, made up of Salafis and tribal fighters from the south, largely redeployed to the Red Sea Coast for the battle for Hudaydah (see ‘The Battle for Hudaydah’).

In the months following the January clashes, Saudi Arabia tried to mediate between Hadi, the UAE and local forces competing with the government. Riyadh arranged for Hadi to visit Abu Dhabi in June, after which the president traveled to Aden for the first time in more than eighteen months. However, tensions with the UAE-backed STC soon resumed. Between July and September, the STC staged demonstrations against the Yemeni government and repeatedly called for an independent southern state. The STC capitalized on the currency crisis and the soaring food prices during these months (see ‘The Currency Crisis and the Threat of Famine’), which had exacerbated popular anger against the government.

In October, 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. Hungarian-Israeli security contractor Abraham Golan, founder of Delaware-based Spear Operations Group, told Buzzfeed News that the UAE had flown his team to Aden to assassinate figures designated as targets by Emirati officials. Golan said the UAE provided his team with high-end American weaponry. Since 2015, Aden has seen several waves of assassinations against local clerics and political figures affiliated with competing political camps, suggesting that several parties were responsible for the killings.

Hadramawt: Ali Mohsen, Islah vs. UAE-backed Local Forces

In 2018, tensions between local powerbrokers and the internationally recognized Yemeni government also came to the fore in Hadramawt governorate. Yemen’s largest governorate, Hadramawt sprawls from the eastern desert to the port city of Mukalla. Security control through 2018 was generally split between Islah-dominated forces loyal to President Hadi and Vice-President Ali Mohsen al-Ahmar in Hadramawt Valley in the center of the governorate, UAE-backed Hadrami Elite Forces in the southern coastal region, and Saudi-affiliated troops stationed in the governorate’s north.

Hadramawt has also historically accounted for more than half the country’s oil production. In March 2018, the Yemeni government and Hadramawt governor Faraj al-Bahsani struck a deal to end a long-standing dispute over the governorate’s share of oil export revenues. Under the agreement, Hadramawt was granted 20 percent of the revenues from its oil exports, allowing the governor greater ability to act autonomously, even with inconsistent oil production.

Over the summer, a rift reopened between the Hadi government and local constituencies in Hadramawt. In July, amidst protests against the lack of services and poor security conditions, southern secessionists from the STC accused Hadi’s government of failure and called on the Hadrami Elite Forces to take control of security in Saiyun, the main town in Hadramawt Valley, where the government’s First Military Region headquarters are located.

The economic crisis sparked by the plunge in the value of the rial emboldened Hadi’s rivals further. In September, in the midst of protests against economic hardship, Governor al-Bahsani threatened to halt any oil exports from the governorate if the central government did not address the economic crisis. In October, tensions among security forces escalated in Hadramawt Valley, where protests against security and economic conditions divided the security forces. The security committee, responsible for coordinating local security forces in the governorate, voiced support for the protesters, in defiance of Ali Mohsen, whose forces had clashed with demonstrators. Hadramawt’s governor accused Islah-affiliated brigades of harboring “terrorist groups” in Hadramawt valley, and called for the deployment of the Hadrami Elite Forces in the region.

At the end of 2018, however, the status quo in the governorate remained. Sources close to the Saudi-led military coalition confirmed to the Sana’a Center that Riyadh had intervened to stop a further conflict from escalating. Despite Abu Dhabi’s active support for groups opposing President Hadi’s government, it aligned itself with the Saudi position, as it did in Aden when secessionists attempted a coup there in January.

Marib: Islah, Tribes and the Saudis United in Federalism

The governorate of Marib was one of the most stable areas of Yemen in 2018. Governor Sultan al-Aradah, a powerful local tribal leader, has through the current conflict carved out a de facto federal statelet under his rule, in alliance with local tribes and the Islah party. Marib has evolved into a center for northern Yemenis opposed to the armed Houthi movement and a major headquarters for military operations against Houthi forces in the north. The governorate’s oil, gas and water resources have helped Marib attain relative self-reliance and autonomy from the Hadi government. Producing some 15,000 barrels of liquid petroleum gas (LPG) per day, Marib remained Yemen’s number one LPG provider in 2018. Thanks to its local refinery, Marib sold most of its oil on the local market, while keeping oil and gas revenues at the local branch of the central bank rather than transferring them to the Yemeni government-controlled branch in Aden.

As a core area of Saudi influence situated in the north of Yemen, Marib was less exposed to Emirati efforts to shore up local groups against Islah. Its strong local tribal networks also helped to prevent divisions and power struggles from escalating. Meanwhile, Marib’s Islah-affiliated security apparatus heavily oppressed political dissent.

Taiz: Islah Forces Oust Rivals

The Islah party took major steps to consolidate its political and military power in Taiz City in 2018. An ally of the internationally recognized Yemeni government, Islah utilized its strong grassroots support, local business ties and its loyalists in senior military positions to act with increasing independence in the southwestern city. It also faced vocal resistance in a city with strong political traditions that was once a main base for leftist parties.

As well as fighting the armed Houthi movement, Islah-affiliated forces also clashed with other anti-Houthi groups, in particular the Salafi-oriented Abu al-Abbas Brigades, who have been supported by the UAE. The group’s leader, Abu al-Abbas, is notable for the US Treasury designating him a “prominent military instructor” and fundraiser for al-Qaeda in the Arabian Peninsula (AQAP) in 2017.

In August 2018, intense clashes erupted between Islah-affiliated groups and the Abu al-Abbas Brigades in Taiz City. Dozens of civilians were reported killed or wounded. President Hadi announced the creation of a presidential committee to end the violence, though the committee was dominated by Islah figures. In a deal brokered by the committee, both the Abu al-Abbas Brigades and Islah-affiliated army units and militias agreed to withdraw from positions within Taiz City. By the end of August, Abu al-Abbas’ forces had withdrawn but Islah-affiliated forces remained. Despite having fulfilled its mandate, the presidential committee then refused Taiz governor Amin Mahmoud’s request to dissolve. Instead, the committee aided Islah affiliates in asserting control over the local security apparatus and facilitated the withdrawal of other anti-Houthi forces from areas around Taiz, allowing Islah-affiliated forces to move in.

Tensions in the governorate of Taiz persisted in the following months. A wave of assassinations targeted high profile figures from both groups in the al-Turbah area in the south of the governorate, and disputes erupted over the control of checkpoints on the strategic road linking Taiz City and Aden.

The year closed with President Hadi’s dismissal of Governor Mahmoud, who had opposed the Islah takeover. To replace Mahmoud, Hadi nominated Nabil Shamsan, a technocrat and former minister of civil services from the GPC party (see ‘The GPC in Crisis’) with ties to Yemeni political figures from various camps. Mahmoud’s dismissal, which Islah had pushed for, appeared to be part of a deal that also included the replacement of the commander of the Taiz Military Axis, Khaled Fadel, who was a primary Islah ally in Taiz. Fadel was succeeded by Samir al-Hajj, a former military commander who has been on relatively good terms with Islah and Yemeni Vice President Ali Mohsen al-Ahmar.

Source: Sana’a Center research // Graphic: Ghaidaa Alrashidy

Red Sea Coast: Tariq Saleh Switches Sides

A new, controversial ally emerged in the fight against the armed Houthi movement in 2018. Tariq Saleh, a nephew of the late former President Ali Abdullah Saleh, survived the clashes with Houthi forces that killed his uncle in December 2017. The UAE had retained ties with the Saleh family throughout the conflict despite the family’s alliance with the armed Houthi movement, and began building Tariq into a new military ally early last year. In February, Tariq Saleh began mobilizing troops in Aden with military and financial support from the UAE.

In April, these troops, dubbed the National Resistance Forces, joined the fight against the armed Houthi movement on the Red Sea coastline, where prominent locals held longstanding ties to Saleh, as well as Vice-President Ali Mohsen al-Ahmar. Most members of parliament from Hudaydah are members of the General People’s Congress party – which Saleh founded and formerly led. Saleh had used patronage to build a constituency in Hudaydah, one of Yemen’s poorest governorates.

Several factions in the anti-Houthi alliance opposed Tariq Saleh assuming a prominent military role. In April, thousands of people joined a demonstration staged by an Islah-affiliated organization in Taiz to protest Tariq Saleh’s deployment on the governorate’s western coastline. Protester grievances centered around Saleh’s backing by the UAE. Local sources told the Sana’a Center that some demonstrators also objected to Tariq Saleh because of his role in the former regime. Military commanders from the Giants Brigades (al-Amaliqa) initially opposed Tariq Saleh’s involvement in the Red Sea offensive but later relented and fought alongside his troops.

Socotra: The Government vs. the UAE

Tensions between the UAE and the internationally recognized Yemeni government mounted in 2018, as the ostensible allies traded accusations publicly for the first time in an open spat over the island of Socotra. In May, President Hadi’s government sent a letter (S/2018/440) to the UN Security Council complaining that Abu Dhabi had undertaken “unjustified military action” on the island. The UAE had deployed some 100 Emirati troops and military equipment to Socotra, and taken control of the island’s seaport and airport.

The island archipelago is a UNESCO world heritage site located at the strategic intersection of shipping lanes between the Persian Gulf, the Red Sea and the rest of the Indian Ocean. Hadi’s prime minister at the time, Ahmed Obaid bin Dagher, had accused the UAE of breaching Yemen’s sovereignty during a visit to Socotra. Abu Dhabi denounced the allegation and accused the Muslim Brotherhood of instigating a media campaign against the UAE. Meanwhile, widespread discontent with the Emirati presence led to public protests in Socotra’s capital, Hadibu.

The crisis was resolved following US calls for political dialogue and Saudi mediation. According to a high-level official within the Yemeni government who spoke with the Sana’a Center, Hadi had agreed to endorse the US decision to withdraw from the nuclear deal with Iran in exchange for a US administration statement acknowledging Yemeni sovereignty over Socotra. The UAE relinquished control of the island on May 14, expressed regret over the “misunderstanding” and recognized Yemeni sovereignty over Socotra.

Mahra: Saudi Arabia Attempting to Limit Omani Clout

In the governorate of Mahra, for the first time, a geopolitical power struggle became apparent in 2018, when Oman started to support a local protest movement against the presence of the Saudi-led military coalition. Previously, the eastern region bordering Oman had been largely unaffected by the current conflict. This changed when the Saudi-led coalition gradually attempted to establish a military presence in Mahra in 2017. Local tribal leaders expressed concern about militarization affecting the social coherence and identity of Mahra, a region with an identity and language of its own; many locals speak Mahri, an old Semitic tongue.

Mahra’s Nishtun port and land border crossings had gained importance during the war as other entry points for trade became restricted due to the conflict. Its smuggling routes became a focal point for the coalition when it became apparent that military equipment used by Houthi forces had found its way into Yemen via Mahra.

The UAE, however, failed to establish a local proxy force in the way it had in other coastal areas, as locals in Mahra refused to take orders from the coalition that were in opposition to local authorities, according to Sana’a Center researchers. Citing the need to curb arms smuggling through Mahra, Saudi army officers then deployed in the governorate together with proxy forces originating from other areas of Yemen in November 2017 to seize control of Nishtun port, Shahen and Sarfit border crossings with Oman, and al-Ghaydah airport. Locals complained about trade restrictions and demanded the entry points be returned to local control.

Protests against the Saudi-led coalition’s imposition of military control on entrances to the governorate began in April, ebbed away over Ramadan and then resumed again at the end of June in the city of al-Ghaydah. An agreement between tribal leaders, local authorities and Saudi representatives was reached in July but later broke down, with locals accusing the Saudis of not implementing their agreed upon withdrawal from key positions within a two-month period. In September, local media reported that experts tasked with scouring sites to build a Saudi oil pipeline through Mahra had arrived in the governorate, further fueling anger among locals. Local residents and tribal leaders then protested near construction sites for Saudi military bases and near al-Ghaydah airport. According to the office of the former deputy governor and protest leader Ali Salem al-Harizi, a powerful local tribal sheikh and a critic of the Saudi presence in Mahra, the demonstrations were directed against the pipeline project as well as efforts by the Saudi-led military coalition to expand its influence in the governorate.

According to several Sana’a Center sources and research in Mahra, Oman started supporting the protest movement against Saudi presence through al-Harizi. Oman had traditionally supported Mahra through privileges like preferential trade relations, investments and health services, but this appeared to be the first time that Muscat provided financial assistance for a political cause in Mahra. Oman’s historic ties to the Yemeni region on its border meant that the Saudi military presence and control of border crossings represented an infringement on its zone of influence and a challenge to its clout in the area.

Saudi military presence gradually increased over the course of 2018, according to Sana’a Center researchers. In the second half of the year, there were between 1,500 and 2,000 Saudi troops in Mahra. In addition, according to diplomatic sources who spoke with the Sana’a Center, US special forces were deployed to Mahra to help the coalition counter the smuggling of Iranian weapons, in an apparent deviation from the Pentagon’s official line that direct military engagement in Yemen was limited to operations against AQAP and the so-called ‘Islamic State’ group, or Daesh.

Prior to the protests against Saudi military presence, the arrival of a large group of Salafis from other areas of Yemen had already sparked protests, as rumors circulated that Saudi Arabia was behind a plan to resettle Salafis in Mahra and change the social fabric of the area. In January, residents of Qishn demonstrated against Salafis settling in their town, as well as against alleged plans to establish a Salafi institute with Saudi support in Qishn. The governor then met with local dignitaries and assured them that there were no such plans; the Saudi-led military coalition was itself forced to deny claims it was involved in any such project. However, Saudi Arabia appeared to be investing in Mahra for the long haul. In December, the opening of Mahra TV, a new local TV station with headquarters in Riyadh, was announced.

Protests against Saudi Arabia in Mahra continued at the end of 2018, and the risk of an escalation with Saudi troops remained high going into 2019.

A New Prime Minister, a President in Bad Health

Maeen Abdul Malik Replaces Bin Dagher as PM

The president of the internationally recognized Yemeni government, Abdo Rabbu Mansour Hadi, sacked his Prime Minister Ahmed Obaid bin Dagher on October 15, replacing him with the technocrat Maeen Abdul Malik. The new premier entered office with a relatively clean reputation, having first taken a public office during Yemen’s National Dialogue Conference (NDC) negotiations following the Arab Spring protest movement in 2011. Among the posts he held related to the political transition process were chairman of the Independent Authorities working group at the NDC, as well as seats on the committee responsible for drawing up new federal regions and the Constitutional Drafting Committee.

Officially, Hadi fired bin Dagher over corruption allegations, and the president opened an investigation into his former premier. However, a Sana’a Center investigation into the development of Yemen’s war economy found that Hadi himself has presided over rampant government corruption. It is widely thought that Hadi has sought to replace late former President Saleh as leader of the GPC party and that he saw bin Dagher – a politically dynamic figure also maneuvering to head the GPC – as a threat to these ambitions.

Some greeted Abdul Malik’s s appointment with cautious optimism due to his clean reputation and his international connections.

President Hadi’s Health in Doubt

Questions regarding President Abdo Rabbu Mansour Hadi’s health continued to be a source of speculation in the second half of 2018. The Yemeni president is known to have a heart condition, for which he has had regular check-ups at the Cleveland Clinic in the US for several years. In August, Hadi collapsed in a corridor of the Egyptian parliament in Cairo just prior to addressing lawmakers there, and by the end of the month he was back at the Cleveland Clinic. In late October Hadi was again in the US undergoing medical procedures. In November, Hadi’s office denied that his health was deteriorating, stating the president was in good health and undergoing regular tests.

Behind the scenes, many regional and international stakeholders in Yemen have been trying to assess possible scenarios that may arise should Hadi die. A general consensus is that it would represent a major turning point in the war and the future of the country, especially given the uncertainty of who might replace him, and how his successor would be chosen.

Houthi Hardliners On The Rise

Moderates Silenced After the Deaths of Saleh And al-Samad

Hardliners and ideologues expanded their clout within the armed Houthi movement in 2018. Houthi forces began consolidating control in Yemen’s northern areas after killing their erstwhile ally, former Yemeni President Ali Abdullah Saleh, in December 2017. The Houthi leadership’s tense alliance with Saleh had come to an end after the former president publicly sought an alliance with the Saudi-led coalition. While there has been controversy around the circumstances of Saleh’s death on December 4, 2017, according to Sana’a Center research and sources close to Saleh, Houthi forces killed the former president outside of Sana’a, in the village of al-Jahshi in the Sanhan area, from where he originated.

On January 1, 2018, Houthi authorities in Sana’a cemented their control over government institutions, announcing the appointment of 32 new ministers, governors and advisors to fill vacancies left by the collapse of the Houthi-Saleh alliance. Meanwhile, the Sana’a branch of the GPC was greatly weakened by Saleh’s death, given that he had led the party since founding it in 1982. Many GPC leaders fled Sana’a after Saleh’s killing, while others stayed but assumed a low profile. Houthi authorities also carried out an arrest campaign against GPC members suspected of opposing them (see ‘The GPC in Crisis’).

The domination of hardliners within the ranks of the armed Houthi movement intensified in April with the killing of Saleh Ali al-Samad, president of the Supreme Political Council (SPC), the highest governing body in Houthi-controlled territory. Al-Samad, a senior Houthi official, was killed in a coalition airstrike along with prominent Houthi military commanders. According to a Foreign Policy report, the UAE targeted al-Samad using intelligence channeled through the networks of Tariq Saleh, nephew of the late former president (see ‘Tariq Saleh Switches Sides’).

Al-Samad was the highest-ranking member of the Houthi leadership to have been killed in the conflict thus far. Regarded as a moderate, al-Samad was well-connected within the Houthi organization and beyond. He was replaced by hardliner Mahdi al-Mashat, a close associate and former student of Houthi leader Abdulmalik al-Houthi, whose office he once headed. The deaths of Saleh and al-Samad and the rise of al-Mashat were major factors contributing to increased levels of oppression against, and the heavy imposition of Houthi ideology on, the citizenry of northern Yemen.

Spreading Sectarianism and Fear

The climate of fear and oppression in Houthi-controlled areas intensified in 2018. Human rights organizations documented widespread arrests and enforced disappearances (see ‘NGO and Media Investigations’). Houthi authorities strengthened their grip on economic levers and increasingly extorted taxes, tariffs and fees from individuals and businesses in northern Yemen (see ‘Houthi Authorities Strengthen Their Grip Over the Economy’). They also intensified pressure on the staff of international NGOs (see ‘Aid Diversion and Targeting Humanitarian Staff’) and local civil society. In a November 5 letter from the president of the Supreme Political Council in Sana’a to the Minister of Social Affairs and Labour, the former banned the latter from issuing or renewing licenses for any local NGOs, unions, syndicates, foundations or associations, “from this time until further notice”. The decree allows for “emergency” exceptions, implying those organizations that are Houthi-affiliated. With Saleh’s supporters scattered and the GPC hobbled, the armed Houthi movement no longer faced any meaningful opposition to its domination within northern areas of Yemen. The last newspaper in Sana’a that was not associated with Houthi forces, the Saleh-affiliated Yemen Today, was shuttered at the end of 2017.

In 2018, Houthi authorities began to force public servants to attend cultural camps, where they listened to speeches by Houthi leader Abdulmalik al-Houthi and his older brother, Hussein al-Houthi, the founder of the Houthi movement who was killed by the Yemeni army in 2004. Teachers who spoke with the Sana’a Center said that Houthi authorities had radically altered curricula and school textbooks, promoting Houthi ideology and adding a sectarian tone to history and religion courses. Houthi ideology was also propagated in summer camps for school children, and Houthi leaders escalated incitement against minorities, in particular the Baha’i faith (see ‘Human Rights Violations‘). In Ramadan, Houthi authorities banned mosques from broadcasting the Tarawih prayer, a tradition among Yemen’s Shafais (as Sunni Muslims are called in the country). They also regularly installed surveillance cameras at mosques where the preachers were not Zaidi (the branch of Shia Islam of the armed Houthi movement).

Houthi authorities further intensified restrictions on social life throughout 2018, banning a film festival and shutting down coffee shops to prevent mixing between genders. While Sunni extremist groups also expanded their influence in 2018 in areas nominally held by the government – such as Aden and Taiz – the Zaidi Shiite sectarianization in Houthi-held areas was institutionalized by the governing authorities.

The GPC in Crisis

Following the death of its leader, former President Ali Abdullah Saleh, the General People’s Congress party (GPC) entered 2018 with a fragmented leadership and a deep identity crisis. The party had already been weakened by the 2011 uprising, Saleh’s departure from the presidency in 2012 and the onset of the current conflict in late 2014; however, Saleh’s death in December 2017 shook the foundations of the GPC, Yemen’s largest and most important non-sectarian political party.

Many senior GPC leaders and GPC-affiliated families, including most of Saleh’s family, fled Houthi-controlled areas in 2018. Many relocated to regional capitals, while some joined Tariq Saleh – the late president’s nephew who formed an armed force with Emirati support – to fight the armed Houthi movement (see ‘Red Sea Coast: Tariq Saleh Switches Sides’). GPC members who remained in Houthi-held territory were often arrested or placed under house arrest, while those considered innocuous remained free. Sadeq Amin Abu Ras, the former deputy of the late Saleh, became the head of the GPC faction in Sana’a, but with only limited political power. Given the Houthi security forces’ iron-fisted grip on the capital, the GPC has had little independent room to operate in Sana’a.

By the end of 2018, the upper ranks of the GPC were scattered across the region and beyond. The leadership had fragmented into several main factions: those close to President Hadi and Saudi Arabia, who were mostly based in Riyadh and Cairo; those close to the UAE; and those who remained in Houthi-controlled areas. Sana’a Center sources reported that Oman and Qatar had successfully convinced some GPC leaders to relocate to Muscat, with Qatar providing some with financial incentives.

Saleh’s son Ahmad Ali Saleh, who was appointed ambassador to the UAE in 2013, was seen as a potential successor to his father. He maintained close ties with Abu Dhabi even while his father was allied with the Houthi forces. However, the late president’s son showed limited ability to mobilize the GPC base.

Saudi efforts to reunite the GPC also proved unsuccessful. An attempt to bring the party membership together in Jeddah in June drew no attendees from Sana’a. Participants at the meeting failed to agree on a new leader. Hadi’s aspirations to lead the party were well-known in 2018, but many prominent GPC members would not even consider this possibility. In the end, an agreed-upon action plan involving leaders from different factions was not followed up on or implemented.

Taiz in August: A tank from the Islah-affiliated 17th infantry brigade in action. Islah-affiliated anti-Houthi forces have ousted rivalling allies from parts of the governorate, as clashes with the Houthis were ongoing // Photo Credit: Ahmed Basha

Frontline Developments

Overview: The Armed Houthi Movement Cornered But Uncowed

Anti-Houthi forces, backed by the Saudi-led military coalition, made gains on several fronts in 2018. The most significant military campaign began in the summer as ground forces supported by coalition aircraft began moving northward up the Red Sea Coast toward the port city of Hudaydah. The UAE coordinated the offensive, named “Operation Golden Victory”, with the aim of conquering the last ports under the control of the armed Houthi movement, the largest being Hudaydah port, as well as the nearby ports of Saleef and Ras Issa. The campaign was characterized by stops and starts, with the most recent pause beginning after the warring parties agreed on a ceasefire during the Sweden consultations in December. (For full details, see ‘The Battle for Hudaydah’ and ‘The Stockholm Agreement’.)

Elsewhere in the country, anti-Houthi forces exerted pressure on several fronts simultaneously, including in the northern Sa’ada governorate, the birthplace and heartland of the Houthi movement. However, outside of Hudaydah and relatively minor movements in Sa’ada governorate, frontlines around the country remained largely unchanged over the course of the year and were static at the time of this writing. Armed clashes have continued and in some cases intensified since the December talks in Sweden, namely in Marib, Taiz, al-Jawf and Sa’ada. The armed Houthi movement retained control over Yemen’s largest population centers, including the capital Sana’a. As has been the case since the Saudi-led military coalition intervention in March 2015, an all-out military victory against Houthi forces remained highly unlikely heading into 2019. Meanwhile, as Houthi forces demonstrated in 2018 with regular missile and drone attacks into Saudi Arabia and against shipping in the Red Sea, they have continued to develop their capacities to harass their foes beyond Yemen’s borders.

Power struggles and friction among the forces nominally aligned with the government at times weakened the fight against the armed Houthi movement (see ‘Cracks Within the Anti-Houthi Alliance’). When clashes occurred in Aden in January between southern secessionists and troops loyal to President Hadi (see ‘Aden: Hadi, Islah vs. UAE-backed Secessionists, Salafis‘), military commanders loyal to Hadi threatened to withdraw from key frontlines and redeploy to Aden. However, with the offensive on Hudaydah beginning in summer, these rivals largely closed ranks, with the UAE exerting pressure on the parties to do so. The UAE has supported groups challenging the government of Hadi, most notably the southern secessionists. But as the battle for Hudaydah began under Emirati leadership, unity on the battleground became the priority for Abu Dhabi.

Meanwhile, al-Qaeda in the Arabian Peninsula’s (AQAP) attacks in Yemen dropped significantly in 2018, as the group appeared far weaker as 2018 ended than it did when the ongoing Yemeni conflict began. While counterterrorism operations by the Saudi-led military coalition and US military have left AQAP smarting, reports also emerged last year of instances in which the coalition had paid off AQAP fighters to de-escalate conflicts, and even hired fighters out of the group and into the coalition-backed forces operating in Yemen. Also in 2018, AQAP for the first time battled it out with fighters from the so-called Islamic State group, or Daesh, signaling that the implicit non-aggression pact that had been in effect between the two jihadist rivals had ended.

Most Important Anti-Houthi Ground Forces

The Yemeni national army fractured when the civil war broke out in 2014. Some army units fought alongside now-deceased former President Ali Abdullah Saleh and the armed Houthi movement, others with the government and allied militias. Saudi Arabia supports army units loyal to the government. UAE-backed forces such as the Giants Brigades, the National Resistance Forces or the Security Belt Forces operate largely outside the control of the government, answering directly to the UAE.

Giants Brigades (al-Amaliqa): UAE-backed, composed of tribal fighters from southern Yemen as well as Salafis who adhere to the principle of wali al-amr, meaning they reject any disobedience to the ruler, who in the case of Yemen is President Hadi. At the same time they are loyal to the UAE to the extent that Abu Dhabi arms and funds them. Some of these Salafis also previously lived under Houthi siege, and thus are motivated by sectarian zeal and desire for revenge. Overall, southerners (particularly those from more western governorates) who wanted to fight against the Houthi forces but did not want to be part of the power struggle between Hadi and the STC joined the Giants. With six battalions totalling some 20,000 fighters, the Giants are the largest contingent of the ground forces spearheading the coalition-backed Hudaydah offensive.
National Resistance Forces: UAE-backed, led by Tariq Saleh, nephew of late former Yemeni President Saleh, mostly composed of former army units from northern Yemen; Tariq Saleh’s forces have been leading the battle for Hudaydah together with the Giants Brigades. 4000 of them were deployed at the beginning of the battle, with 2000 more being trained.
Tihama Resistance: A UAE-backed force of locals from the Red Sea Coast area recruited to join the Hudaydah offensive along side Tariq Saleh and the Giants Brigades, likely totalling several thousand fighters.
Government Army Factions: Troops from the fractured Yemeni national army affiliated with the government; a significant part of them are affiliated with the Islah party and Vice-President Ali Mohsen al-Ahmar
- Islah-affiliated troops control Marib together with tribal alliances. They ousted rivalling factions in Taiz and were challenged by southern groups in central Hadramawt in 2018; many of these go back to 2012 when President Hadi, in the course of security sector reform during political transition, recruited more than 20,000 new soldiers affiliated with Islah.
- In Taiz, Islah-affiliated factions were in conflict with the UAE-backed local forces of the Abu al-Abbas Brigades, but also with another Yemeni army faction, Liwa 35. This latter group, based in the Turbah area as of end of 2018, is made up of general Yemeni army personnel and left-leaning nationalist figures from around Taiz governorate.
Abu al-Abbas Brigades: UAE-backed force from Taiz composed mostly of fighters from the old city of Taiz and surrounding areas. Its members are of a variety of ideological leanings, led by the Salafi Abu al-Abbas who is being accused by the US of being a fundraiser and military trainer of AQAP; have been in conflict with Islah-affiliated forces in Taiz.
Presidential Protection Forces: Force loyal to President Hadi controlling several military posts in the government’s temporary capital Aden, where the Security Belt Forces are generally in control; established in 2012 as force to protect President Hadi in the framework of security sector reform during the political transition; a small number have joined the Giants Brigades for the Red Sea offensive.
Hadrami Elite Forces: UAE-backed force operating in the southern part of Hadramawt, composed of tribal fighters and other locals. Involved in UAE-led operations against AQAP and Daesh.
Shabwa Elite Forces: UAE-backed tribal force operating in Shabwa. Involved in UAE-led operations against AQAP and Daesh.
Security Belt Forces: UAE-backed secessionist force from southern Yemen affiliated with the STC; numbers more than 15,000 troops, deployed in Aden, Abyan, al-Dhalea and Lahj. The majority are currently from al-Dhalea governorate. Involved in UAE-led operations against AQAP and Daesh. The UAE set up the Security Belt with fighters from the Southern Resistance that was formed to expel Houthi forces from Aden in 2015. President Hadi’s attempts to bring them under government control failed. The Security Belt has dominated security in Aden after clashes with troops loyal to President Hadi in January 2018. Some members are both secessionists (opposing Hadi) and Salafis – a rather unusual combination; however, the current Security Belt leader, Wadhah Omar Abdel Aziz, has no Salafi background.
Tribal Alliances have been formed in various areas to fight alongside anti-Houthi forces or to secure tribal areas nominally held by the government.

The Northern Front

Over the course of 2018, anti-Houthi forces continued their advance in Sa’ada governorate, moving southward from the Saudi-Yemeni border. As the birthplace and stronghold of the Houthi movement, Sa’ada has considerable symbolic and strategic significance, with its fate likely decisive for the wider conflict.

Anti-Houthi forces did not take control of any significant population centers during the year, but their encroachment on mountains in the northern governorate offered strategic dividends for subsequent advances. A new thrust into western Sa’ada from Saudi Arabia’s Jizan governorate was launched in January, with coalition airstrikes preceding assaults by ground troops. Coalition-backed forces then opened another front in southwest Sa’ada in April, with units comprised mostly of southern fighters, according to local media.

In April, anti-Houthi forces seized the town of al-Malahidh, al-Zaher district, western Sa’ada, putting pressure on Houthi supply lines between Sa’ada and Haradh City, Hajjah governorate. Coalition-backed forces then accelerated their advances in the summer, taking a strategic mountain range in northwest Sa’ada, overlooking Baqim district, while simultaneously moving south in Kitaf district, seizing sections of the road connecting Sa’ada City to the Saudi border. Given its significance, Sa’ada governorate was prioritized as the destination for Houthi reinforcements during the year, putting a strain on other active frontlines.

Coalition-backed advances in Sa’ada were generally characterized by gaining ground followed by counterattacks, but over the year as a whole the northern governorate was the site of the only significant anti-Houthi gains outside of Hudaydah. Nevertheless, the difficult terrain has made the offensive costly to coalition-backed forces. Sana’a Center sources reported a high death toll for small distances gained.

Houthi Missiles and Drones

Attacks Against Saudi Arabia, the UAE, and Local Opponents

The armed Houthi movement demonstrated more sophisticated military capacities as the war progressed, with increasing missile attacks against Saudi Arabia and the deployment of unmanned aerial vehicles (UAVs) against coalition and local anti-Houthi forces. Houthi-affiliated media claimed to have targeted UAE military facilities in Mokha district with missiles and drones in April. In early July, Houthi forces released a video showing a drone dropping explosives on UAE-backed forces in an area south of Hudaydah City. Days later, for the first time, they targeted Aden with a drone that was subsequently shot down by the coalition. In the same month, the armed Houthi movement claimed attacks in both Saudi Arabia and the UAE. Saudi Aramco denied an alleged long-range UAV attack by Houthi forces at one of its oil refineries in Riyadh, while Abu Dhabi refuted the claim of a Houthi drone attack on its airport.

On March 25, on the third anniversary of the beginning of the Saudi-led coalition’s military intervention in Yemen, Houthi forces fired a barrage of missiles at Saudi Arabia, three of them targeting the capital Riyadh. Saudi Arabia claimed the interception of seven ballistic missiles, while one Egyptian national was reported killed by the falling debris. Saudi-led military coalition spokesman Col. Turki al-Maliki blamed Iran for the attacks, claiming that Tehran supplied the armed Houthi movement with ballistic missiles. Houthi forces have frequently used ballistic missiles to target Riyadh, the first time being in May 2017.

Throughout the month of April, the armed Houthi movement claimed almost daily missile and drone attacks targeting Saudi Arabia, with the majority of these attacks focusing on military, energy and transport infrastructure in southern areas bordering Yemen. Many of these claimed attacks were neither denied nor confirmed by Riyadh, while there was little indication of significant damage caused.

Attacks in Bab al-Mandab Strait

Houthi forces also carried out attacks on Saudi oil tankers off the Red Sea Coast with surface-to-ship missiles on April 3 and on July 25. In each case, one oil tanker suffered minor damages, according to statements from Saudi officials. Houthi media in both cases reported targeting Saudi warships. Saudi Arabia blamed Houthi forces and Iran for the attacks, accusing the latter of supplying missiles to the armed Houthi movement. In April, Saudi Arabia reacted decidedly undeterred, with the Saudi energy minister stating that the attacks against oil tankers were not affecting economic activity, meaning that transport through the Bab al-Mandab Strait would continue interrupted. In July however, Riyadh announced a temporary halt in all oil shipments through the strait.

While Saudi media reported that the UAE and Kuwait were also considering suspending oil shipments through the Bab al-Mandab Strait, Tehran escalated its rhetoric. Qassem Soleimani, head of the Iranian Quds force, said that due to the presence of US troops, the Red Sea was “no longer secure”. A week later, the Houthi leadership declared a unilateral two-week halt in military operations along the Red Sea. The Houthi authorities also suggested to extend the pause and “include all fronts” if the move was reciprocated by the Saudi-led military coalition. A day later at the start of August, Israel’s Prime Minister Benjamin Netanyahu threatened to send military forces to intervene if “Iran” were to attempt to block the Bab al-Mandab Strait. This was the first time Israel had threatened to directly assert itself in the Yemen conflict.

On August 4, Saudi Arabia resumed oil shipments through the Bab al-Mandab Strait.

A Weakened AQAP

Al-Qaeda in the Arabian Peninsula (AQAP), the Yemeni affiliate of the global jihadi group, remained an active participant in the country’s domestic conflict in 2018, engaging in battles and attacks against coalition-backed forces, Yemeni government troops, Houthi fighters and, notably for the first time, the so-called “Islamic State” group, known as Daesh, in Yemen. The year witnessed an overall drop in the number of AQAP attacks in the country, with just 62 claimed operations in the first half of 2018 compared to more than 200 in both 2016 and 2017. These figures were indicative of the group’s reduced operational capacity and that it ended 2018 weaker than at any point in recent years. Meanwhile, counter-terrorism operations against the group, led by the US in conjunction with its coalition allies Saudi Arabia and the UAE, continued mostly in the form of airstrikes. However, 2018 also saw controversy grow regarding the coalition’s conduct and alleged accommodating attitude toward the group.

According to US State Department estimates, AQAP in 2018 had fighters numbering in the low thousands spread across several governorates, while the UN put this figure slightly higher at 6,000-7,000. AQAP’s presence was centered in al-Bayda, Shabwa and Abyan, with a smaller number of fighters present in Hadramawt governorate. US airstrikes also targeted members of the group in the Marib governorate.

In early 2018, the UAE launched several counter-terrorism operations against AQAP’s enclaves in Hadramawt, Shabwa and Abyan. In February, “Operation al-Faisal” mobilized the UAE-backed Hadramawt Elite Forces to target AQAP militants in the al-Masiuni valley approximately 100 km west of Mukalla in Hadramawt, while “Operation Decisive Sword” deployed the UAE-backed Shabwa Elite Forces to clear Wadi Yeshbum in Shabwa. The following month in Mahfad district, Abyan, “Operation Sweeping Torrent”, spearheaded by the Security Belt Forces, resulted in the arrest of nine local AQAP commanders, including the alleged AQAP emir in Mahfad. On March 11, the Emirates News Agency reported that Mahfad district was clear of AQAP militants, though whether the group withdrew from the district to avoid engaging with a superior force or as part of a deal with the coalition was unclear.

In June, AQAP published an interview with senior leader Khalid bin Umar Batarfi in which he acknowledged dwindling resources and military pressure on the group, but promised significant “operations” when conditions were more amenable. The month also witnessed a notable uptick in AQAP asymmetric attacks against multiple opponents. The group claimed a complex suicide attack against Security Belt Forces in al-Wade’a district, Abyan, while suspected AQAP improvised explosive device attacks killed three members of the UAE-backed Shabwa Elite Forces in southern Shabwa governorate and injured nine members of the UAE-backed Security Belt Forces in Abyan governorate. Moving into July, AQAP released a statement claiming three attacks against Houthi forces in al-Bayda governorate in the first 10 days of the month, resulting in the deaths of eight Houthi fighters, including a commander.

AQAP vs Daesh

In a significant development, AQAP fighters in July engaged in direct combat with fighters from Daesh for the first time in Yemen. In previous years, a tactical non-aggression pact existed between the two jihadi groups, according to Gregory Johnsen, author of The Last Refuge: Yemen, al-Qaeda, and America’s War in Arabia. This arrangement was particularly visible in al-Bayda, where the groups had training camps in close proximity to one another. Hostilities between the two groups were limited to a war of words. In his statement the previous month, AQAP leader Batarfi, without mentioning Daesh by name, said his organization was willing to collaborate with other militant Islamist groups in the country and had made attempts to open lines of communication. The non-aggression pact broke down when the two groups engaged in armed clashes in Qayfa, al-Bayda governorate. Following the clashes, Daesh released a video purportedly showing 12 captured AQAP members. In response, a prominent sheikh and former AQAP judge in Taiz called for the killing of Daesh militants in Qayfa. The hostilities between the jihadi groups continued into October when Daesh claimed another attack on AQAP positions in al-Hamida in northwest Qayfa.

Overall however, like AQAP, Daesh experienced a decline in 2018 in terms of strength and capacity. The group held only a few training camps and could call on a dwindling number of fighters, generally estimated to number in the hundreds. The most high-profile attacks carried out by the group in 2018 occurred in Aden. Daesh claimed responsibility in February for a raid on a counter-terrorism headquarters in the city that left 14 dead and more than 40 wounded. The next month, a suicide bombing by the group in Aden killed 10 Security Belt soldiers.

Counter-terrorism policy Yemen

According to figures released by US Central Command (CENTCOM), the US military launched 36 strikes in 2018 against AQAP and Daesh targets in Yemen. This figure was a significant drop from the 156 strikes over the course of 2017. In a change from Bush and Obama-era policies, the Trump administration in 2017 designated several governorates in Yemen as an “area of active hostility”, which expedited the approval process for launching strikes in those regions. It was unclear whether the decrease in strikes against AQAP was the result of a lack of reliable intelligence, fewer targets present on the ground, or other factors. It is also important to note that the US military has an established track record of under-reporting the number of airstrikes it conducts during counter-terrorism operations. Meanwhile, the Associated Press in November reported that civilians accounted for a third of deaths from US drone strikes in Yemen, based on estimates compiled through interviews with witnesses, families of victims, tribal leaders and local activists.

Controversy surrounding US and coalition counter-terrorism policy in Yemen also grew in 2018 following a report that the anti-Houthi coalition had cut secret deals with AQAP to vacate certain areas and had even recruited AQAP-aligned fighters into their ranks. According to the report by the Associated Press, AQAP was paid to retreat from key towns and cities starting in 2016, while militants were allowed to retain weapons, equipment and looted cash. This was allegedly the case in the coastal city Mukalla, from which AQAP retreated in 2016.

AQAP’s evacuation from Mukalla, Yemen’s fifth largest city, spared residents and the city’s infrastructure from what would have been a large-scale assault. Meanwhile, Johnsen told the Sana’a Center that it was unclear whether the reported payments were made to AQAP’s central leadership or to affiliated groups less ideologically committed to the organization. The latter scenario could have been a means of separating fighters aligned with AQAP for convenience and material gain from the group’s hardcore jihadi ideologues. The issue is likely to remain a point of contention moving forward, evidenced by a December Washington Post interview with Abu al-Abbas, a prominent Islamist military commander in Taiz. In the interview, Abu al-Abbas claimed that he was still receiving military equipment and money from the UAE despite being sanctioned by the US in 2017 as an AQAP financier and “prominent military instructor”.

AQAP in 2019

Looking ahead to 2019, AQAP retains the capacity to carry out asymmetric attacks, recruit new members and deploy financial and military resources despite its weakened status. The group was able to garner significant financial resources over previous years from smuggling and the imposition of taxes. Most notably, the group looted an estimated US$100 million from the Hadramawt branch of the country’s central bank during its occupation of the Mukalla.

However, as an organization, AQAP enters 2019 in a different form to its pre-conflict incarnation. While its hardcore jihadi leadership remains, it has less central control over affiliate groups and allied tribal fighters, who often aligned with AQAP to serve their own ends in the country’s domestic conflict. Efforts by the coalition, particularly the UAE, to peel away these fighters with financial or other incentives could be repeated in the future.

Despite the group’s reduced operational capacity and increased focus on the domestic insurgency in Yemen, it has not relinquished its ambitions to act internationally. This was AQAP’s modus operandi in its earliest years, as witnessed by the failed attempt to bring down a US commercial airliner with an underwear bomb in 2009, the defusing of two parcel bombs bound for the US in 2010, and more recently, the 2015 attack against satirical newspaper Charlie Hebdo in Paris that left 12 dead. If the war in Yemen continues, the organization’s safe havens in the country could again attract international recruits, as they did in the early 2010s before Yemen was eclipsed by Syria as a destination for jihadists.

Counter-terror operations against the organization, particularly those targeting its jihadi leadership, also look set to continue. In early January 2019, the US announced that it had killed AQAP commander Jamal al-Badawi in a “precision strike”. Al-Badawi was allegedly involved in the October 2000 attack against the USS Cole warship in Aden, which killed at least 40 people.

Taiz in October: A school boy reviews his notes in the city’s old airport area, which is regularly shelled by Houthi forces. // Photo Credit: Anas al-Hajj

Humanitarian Developments

Overview: A Deepening Food Security Crisis

Already the world’s largest humanitarian crisis, in 2018 the situation in Yemen continued to deteriorate. By the end of 2018, the UN Office for the Coordination of Humanitarian Affairs was reporting that some 24 million people – almost 80 percent of the population – required some form of humanitarian assistance, an increase of almost 2 million over the course of a year.

In a December briefing to the UN Security Council, the UN’s humanitarian coordinator Mark Lowcock said that nearly a quarter of Yemen’s population was on the brink of starvation, with food insecurity affecting more than 20 million, or two-thirds of the population. Lowcock referred to the latest Integrated Phase Classification analysis for Yemen (IPC) which, for the first time, assessed that some 65,000 people had reached IPC phase 5, which indicates the onset of famine. In November, Save the Children estimated that since the beginning of the war, 85,000 children under the age of five may have died from starvation. In October, the UN warned that Yemen was on the brink of the “worst famine in 100 years”.

Humanitarian agencies meanwhile faced enormous challenges in distributing aid, and large amounts of food aid that made it into the country never reached those in need. At the end of the year, reports emerged that food aid was being stolen and diverted on a massive scale by armed groups in Yemen, both Houthi forces and militias affiliated with the government. Siege tactics and bureaucratic obstacles implemented by the warring parties, as well as escalating violence on several frontlines, further impeded the passage of aid and essential goods.

Multiple factors were responsible for the fact that so many people were in need of food assistance. Given that up to 90 percent of Yemen’s food was imported pre-conflict, the dramatic depreciation of the rial in the second half of 2018 caused food prices to soar in a country with an already weak per capita purchasing power. After a recovery of the currency at the end of the year, many food retailers only gradually adjusted prices. The escalation of fighting around the port of Hudaydah as well as a partial blockade imposed by the Saudi-led military coalition impeded both commercial and humanitarian imports (see above ‘Hudaydah, the Heart of the Crisis’).

Meanwhile, cholera numbers were less severe in 2018 than in the previous year in terms of reported new cases, but aid organizations continued to warn about the risk of a new surge. The health sector faced massive challenges due to staff going unpaid and insufficient medical supplies, as well as destroyed infrastructure. Aid organizations stepped up their response programs in Yemen to try and deal with the increasing need. The UN raised almost US$3 billion for its 2018 humanitarian response and announced that US$4 billion would be needed in 2019. However, a source from the humanitarian sector told the Sana’a Center that some organizations faced capacity problems in implementing earmarked projects due to both access restrictions and organizational limitations.

Obstacles to Aid Delivery

Aid Diversion and Targeting of Humanitarian Staff

At the end of December, the Associated Press published an investigation into the stealing of food aid. The report noted large scale, systematic theft of food aid from both sides. In Houthi-held areas, where 70 percent of the population resides, the phenomena was even more widespread than in areas nominally held by the government. The investigation revealed that for example, in the northern governorate of Sa’ada, the heartland of the armed Houthi movement, the UN at times had sent twice the amount of food rations that would cover the estimated half a million people in need. Yet, surveys showed that 65 percent of inhabitants in the governorate were facing severe food shortages, and 7,000 were in areas considered to have reached the level of famine.

In parallel, the World Food Programme (WFP) complained that food aid was being stolen and that at least one of its local partner organizations operating in Houthi-run areas had committed fraud. WFP said its monitors had gathered evidence of trucks illicitly removing food from distribution centers in Houthi-controlled areas. It also complained that many of those registered as beneficiaries never received any of the food aid they were entitled to, while others didn’t obtain full rations. WFP had previously announced that it would further step up its provision of food assistance in Yemen, aiming to reach 14 million people. Since early 2018, the WFP had provided assistance to between 7 million and 8 million Yemenis. After the reports on stolen food aid emerged, the WFP said it would have to reconsider its engagement in Yemen if those responsible did not take the necessary measures to stop the theft of aid.

Meanwhile, international aid workers regularly faced threats and intimidation by the warring parties in 2018. In April in Taiz governorate, in an area held by forces affiliated with the Yemeni government, unidentified gunmen attacked a car belonging to the International Committee of the of Red Cross (ICRC) and killed Hanna Lahoud, a Lebanese national heading the ICRC’s local detention program. The assailants allegedly fled to areas under the control of the Abu al-Abbas Brigades. In June, the ICRC announced the withdrawal of 71 staff members from Yemen, citing increased security risks. Médecins Sans Frontières (MSF) temporarily suspended its activities in al-Dhalea governorate, southern Yemen, after a staff house in the area was targeted with explosives in October. Earlier in the year, MSF had withdrawn staff from seven hospitals after a coalition airstrike hit one of its facilities in Abs, despite MSF having shared the coordinates of the hospital. In Houthi-held areas, humanitarian organizations complained about the detention of humanitarian staff and the delay or denial of their visas to enter the country.

Access Impediments

In November 2017, the coalition imposed a total blockade of all Yemeni sea ports, airports and land crossings after Houthi forces had fired ballistic missiles toward Riyadh. This sparked price surges and shortages of fuel and basic commodities across the country. Through the end of 2017 and early 2018 the blockade was eased somewhat, however UN officials continued to raise concerns over the coalition’s diversions of containerized cargo to Aden, the delaying of cargo ships trying to enter Hudaydah and Saleef ports, and the continued closure of Sana’a International Airport for commercial traffic.

Throughout the year until the ceasefire agreement in December, the ports of Hudaydah and Saleef remained under the control of Houthi forces and were the most important lifeline for 70 percent of the population living in Houthi-controlled areas. The UNVIM, the UN inspections mechanism based in Djibouti, had been inspecting goods entering these ports since July 2016 to address coalition concerns about weapons smuggling, yet the Saudi-led coalition continued to enforce its own additional inspections and frequently caused delays. At the end of 2018, it remained unclear how the implementation of the Stockholm Agreement would impact deliveries at the ports of Hudaydah and nearby Saleef.

Due to the delays caused by the coalition throughout 2018, perishable food often spoiled before being offloaded. Shipping companies, fearing losses, were increasingly reluctant to enter these harbors. Food imports remained severely restricted despite several periods when relative improvements were recorded. In early December, the UN Office for Humanitarian Affairs (OCHA) noted a 41 percent decline in vessels landing and discharging at Hudaydah and Saleef ports compared to pre-blockade levels in 2017. Access for humanitarian staff entering Yemen was also challenged. The WFP canceled the journey of a vessel carrying international staff after an attack on another vessel by unidentified forces.

Humanitarian access continued to be impeded inside Yemen in 2018, owing to escalations in the fighting as well as bureaucratic and other obstacles imposed by the warring parties. Particularly in Houthi-held areas, humanitarian actors who spoke to the Sana’a Center said they faced increasing bureaucratic limitations on their work and rising interference by local authorities. Humanitarian organizations often faced the choice of either working within such limitations or not working at all. In January 2018, UN sources told the Associated Press that more than 35 aid groups had been banned from working in Houthi-run territory.

In April, OCHA reported that more than 9.2 million people were located in areas that were difficult to access. In September, fighting east of Hudaydah closed the city’s main entrance. The minor road north of Hudaydah – linking the city’s Khatt al-Sham entrance to Hajjah governorate and then to Sana’a – became the only open land route left to access the city. The already-hampered movement of humanitarian goods and personnel was thus further obstructed.

OCHA announced plans for a humanitarian air bridge to Sana’a to allow those with severe medical needs to receive treatment abroad in September, however this did not materialize. The Saudi-led military coalition, which controls Yemeni airspace, continued to restrict flights to and from the airport to a number of UN-operated special planes, as it has since 2016. The coalition on several occasions in 2018 denied international humanitarian workers and diplomats permission to board these flights, while the peace consultations in Sweden failed to reach an agreement to reopen the airport.

Impacts of State Collapse on Education and Health Services

Education Crisis

According to the UN Children’s Fund (UNICEF), nearly 2 million Yemeni children were not able to attend school in 2018, an increase of half a million since 2015. An estimated 2,500 schools in Yemen were no longer operating, many of them either destroyed by the war, being used for military purposes, or hosting displaced people.

Meanwhile, schools that remained open faced severe challenges. In 2018, close to three quarters of Yemeni teachers had not received a salary for over two years, and the already underdeveloped education system lacked urgently needed investment. Yemen’s education crisis is a long-term threat and has already had societal impacts. Combined with increased unemployment and poverty levels, the absence of schooling is seen as contributing to a rise in child marriages, child labor and the recruitment of child soldiers. UNICEF reported that at least 2,400 children were recruited by armed groups between March 2015 and March 2018.

Struggling Health Sector

Like the school system, the health sector continued to suffer from unpaid salaries in 2018, with many hospital staff having not received a regular salary since the fall of 2016. Due to import restrictions and the depreciation of the local currency, the supply of medication was severely impeded. The unpredictability of fuel imports further jeopardized the operation of hospital generators, ambulances and water treatment plants, meaning millions of Yemenis struggled to access healthcare, clean water and sanitation.

Aid organizations estimated that around 50 percent of hospitals and health facilities were either not working or functioning partially. Hospitals largely lacked the capacity to treat non-communicable and chronic illnesses such as cancer, diabetes and kidney disease. The International Rescue Committee stated in March that at least 9.8 million people in Yemen were acutely in need of health services. The closure of Sana’a and Rayan airports for civilian flights and the limited operation of civilian airplanes in government-held areas, as well as the cost of tickets, made it impossible for most to seek medical treatment abroad.

Warring parties continued to attack and endanger hospitals and medical staff in 2018. In November, various organizations including UNICEF, Save the Children and the World Health Organization (WHO) reported that hospitals in Hudaydah were under threat due to fighting closeby.

A lack of clean water, a collapsing health sector and widespread malnutrition have contributed to the world’s worst cholera outbreak in Yemen. Yet, compared to 2017, the number of newly reported suspected cases was significantly lower in 2018. The WHO in May launched the first ever oral cholera vaccination campaign in Yemen in Aden, Ibb and Hudaydah governorates. The escalation of fighting around targeted areas caused some delays. Houthi officials also delayed vaccination campaigns in territories under their control for almost a year, according to aid workers. By the end of October, around 700,000 people had been vaccinated and the WHO aimed to reach another 1.4 million.

Humanitarian Response Stepped Up

Humanitarian operations in Yemen, among the largest and most complex in the world, were stepped up in 2018. An appeal for US$2.96 billion was launched in January to support the UN-coordinated Yemen Humanitarian Response Plan (YHRP), an increase on the US$2.34 billion appeal in 2017. Donations of US$2.01 billion were secured in April at a high-level pledging event in Geneva co-hosted by Sweden and Switzerland. By the end of the year, more than 80 percent of the appeal was covered, compared to around 75 percent of the appeal in 2017. For the Yemen Humanitarian Response Plan 2019, the UN announced that as much as US$4 billion was needed to help 15 million people.

In 2018, Saudi Arabia and the UAE were the largest international contributors to humanitarian relief in Yemen. Much of this came through their joint Yemen Comprehensive Humanitarian Operations (YCHO), through which they pledged US$1.5 billion to fund the UN-coordinated appeal. About US$1 billion of this was funds Saudi Arabia and the UAE committed directly toward the UN’s humanitarian response, with the remainder being a commitment to raise another US$500 million from donors in the region. Saudi Arabia also provided the government-controlled central bank with more than US$2 billion in 2018 to support imports and protect the value of the Yemeni rial (see ‘More Than US$2 Billion in Saudi Deposits and Fuel Grants’).

While the UN welcomed the funds, the YCHO was still criticized in the humanitarian community for rejecting UN calls to end the blockade of Hudaydah and Saleef ports, which were under Houthi control, and for instead focusing on improving access solely to areas controlled by the Saudi-led military coalition and its local allies.

Mahra in October: Many in the eastern governorate were forced to find alternative routes after Cyclone Luban tore through Mahra, causing extensive damage and washing out roadways // Photo Credit: Nabil al-Awzari

Cyclones Hit Socotra and Mahra

Yemen’s eastern governorate of Mahra, bordering Oman, and the Socotra archipelago suffered several cyclones in 2018. Two cyclones crossed the Arabian Sea and the Gulf of Aden in May. Cyclone Sagar had a minor impact in Yemen, but led to heavy rains and flash floods that increased the vulnerability to Cyclone Mekunu, which followed less than a week later. Mekunu first hit Socotra and then passed through Mahra, where hundreds of families had to be evacuated from their homes.

While the cyclones’ impact was less severe than initially feared, 20 people were reported killed in Socotra. Food stocks were destroyed, property and infrastructure badly damaged and water wells affected. In Mahra governorate, four people were reported dead and 20 injured. Infrastructure, agricultural equipment and vehicles were destroyed or damaged. In Mahra and in Socotra, access to some areas was temporarily cut off or restricted. Livelihoods were affected in Socotra, where many people rely on fishing and farming.

In October, Cyclone Luban made landfall in Mahra governorate, killing three people, injuring more than 100 and displacing an estimated 2,200 families. Heavy floods damaged infrastructure and blocked the main road linking Mahra to Hadramawt governorate, impeding humanitarian access. On October 15, the government declared Mahra a disaster zone. The UN, Saudi and Omani charities, and other organizations responded with aid. A week later, families were reported be returning to their homes as rainfall ceased and water levels in valleys began to recede. Yemen’s new prime minister, Maeen Abdul Malik, announced the allocation of YR2 billion for reconstruction in Mahra. Local sources contacted at the end of 2018 however said the governorate was still suffering from damaged roads, with little sign of reconstruction underway.

Human Rights and War Crimes

Overview: More Investigations, More Impunity

Evidence of human rights violations and war crimes by all parties to the conflict continued to mount in the fourth year of the conflict. In August, the UN group of eminent international and regional experts (GEE) published its first report, and found little to no evidence that warring parties were taking any measures to minimize civilian casualties. Appointed in 2017 by the UN Human Rights Council, the GEE was the first independent, internationally mandated UN mechanism to investigate human rights and war crimes in Yemen. It was tasked with documenting a wide range of violations by all sides, such as the targeting of civilians, the recruitment of child soldiers, enforced disappearances and the torture of prisoners.

At the end of 2018, all sides continued to act with impunity. Despite the GEE’s findings, there was no indication that perpetrators feared accountability, beyond damage to their reputations. Sanctions and travel bans have little effect on a locally rooted group like the armed Houthi movement, with few ties to the world outside Yemen. Meanwhile, UN Security Council sanctions remained an unlikely prospect for the Saudi-led coalition, given the alliance’s direct support by permanent council members – the US and the UK.

Member states of the Saudi-led military coalition lobbied UN institutions in 2018, including the UN Security Council, seeking to avoid further damage to their reputations. The coalition’s lobbying efforts at the UN Human Rights Council failed in September when council members voted to renew the GEE’s mandate. Canada, the Netherlands, Belgium, Ireland and Luxembourg took the lead in pushing for the renewal. Notably, the UK, which had not actively supported the establishment of the GEE in 2017, voted in favor of renewing the group’s mandate. Opponents of the renewal said the group lacked balance. While the group’s first report was mostly impartial, it was incomplete in its documentation of Houthi violations – for instance failing to discuss Houthi forces’ use of landmines in civilian areas and the indiscriminate nature of ballistic missile attacks. States in favor of the renewal argued that the GEE needed more time to investigate violations comprehensively.

Human Rights Reports Published in 2018

UN Reports

The UN Panel of Experts on Yemen, which operates under the 2140 Sanctions Committee on Yemen, documented widespread violations of international humanitarian and human rights law by all warring parties in a report released in January. Among the most serious accusations, the panel said the Saudi-led coalition’s restrictions against commercial and humanitarian imports to Houthi-held areas amounted to the weaponization of the threat of mass starvation.

In July 2018, the UN Secretary General officially released the annual Children and Armed Conflict report which each year includes a list of conflict actors worldwide guilty of grave violations against the rights of children, often referred to as the “list of shame” or “child-killer list”. In regards to the Yemen war, the report listed Houthi forces, AQAP, pro-government militias, the UAE-backed Security Belt forces, the Yemeni Armed Forces and the Saudi-led military coalition. This was the third year running that these actors were named to the child killer list, though the coalition was removed from the 2016 report after Saudi Arabia threatened to withdraw hundreds of millions of dollars in UN aid funding. The 2018 report, as with the previous year’s, listed the coalition and the Yemeni government in a special annex, created for violators who had “put in place measures aimed at improving the protection of children”.

In August, the GEE published its first report, which found that all warring parties had likely committed war crimes. The group also submitted to the UN High Commissioner for Human Rights a confidential list naming individuals suspected of violating international humanitarian and human rights law.

In October, a joint submission by human rights NGOs for the Universal Periodic Review at the UN Human Rights Council reported that violations by security forces and non-state actors as well as widespread impunity had increased since the previous review in 2014.

NGO and Media Investigations

Investigations and reports on international humanitarian and human rights law violations in the Yemen conflict were published in 2018 by Amnesty International, Human Rights Watch (HRW), the Associated Press (AP), Mwatana for Human Rights and the New York Times (NYT), among others:

April: Amnesty report on the widening crackdown under Houthi rule;
April: HRW report on human rights violations committed against migrants and asylum seekers from the Horn of Africa in a detention center in Aden;
May: Amnesty report on endangering civilian lives in Hudaydah;
June: Amnesty report on obstacles for humanitarian aid;
June: AP investigation on sexual abuse in UAE-controlled prisons;
July: Amnesty report on enforced disappearances in southern Yemen;
August: HRW report on the failures of the Joint Incidents Assessment Team, a body established by the Saudi-led military coalition to investigate incidents in the Yemen war;
September: HRW report on detention in Houthi-held areas;
November: Mwatana report on violations against cultural heritage;
December: NYT investigation on the coalition attacking fishermen in the Red Sea;
December: AP investigation on abuse in Houthi-controlled prisons;
December: AP report on Houthi forces recruiting child soldiers.

Overview of Violations

Disregard for Civilian Lives

In a new investigation, the Armed Conflict Location & Event Data Project (ACLED) estimated in December 2018 that over 60,000 people had been killed in the Yemen war since just 2016. The number was significantly higher than a frequently-cited UN estimate that counted around 10,000 deaths, a figure that has not changed significantly since August 2016.

While the number of civilian deaths was not clear, according to the UN, the majority of civilian casualties it documented were caused by Saudi-led coalition airstrikes. Among the most high profile incident of this in 2018 was a coalition airstrike in August on a school bus in Sa’ada governorate that killed 44 children. The incident was met with international condemnation. Saudi Arabia initially described the strike as a “legitimate military action” targeting Houthi leaders, but it later reversed its position under pressure from the US Pentagon. The US government had come under increasing scrutiny domestically over its involvement in assisting airstrikes in Yemen (see ‘Increasing Domestic Pressure Over US Role in Yemen’). For the first time since the beginning of its intervention in Yemen, the coalition expressed regret, promised compensation to the victims and pledged to hold those responsible to account. As of this writing there had been no indications that victims had received compensation nor that any coalition personnel had been held accountable.

Houthi forces meanwhile continued to put civilians lives at risk with indiscriminate attacks on populated areas, especially in the governorates of Taiz and Hudaydah. Along the Red Sea Coast, Houthi landmines caused civilian deaths and injuries, while Houthi forces prevented civilians from fleeing the area and forcibly recruited fighters, including minors, according to Amnesty International. On various occasions Houthi forces also forcibly disappeared unpliant civilians, for example those who tried to prevent Houthi fighters from taking up positions in their homes in Hudaydah, according to residents who spoke with the Sana’a Center.

Impeding Humanitarian Access

The UN and international human rights organizations harshly criticized obstacles and delays to imports of food and humanitarian aid caused by the Saudi-led military coalition. Amnesty International said this may have amounted to collective punishment, a war crime, in a report in June, echoing concerns expressed earlier by the UN Panel of Experts. Amnesty International also accused Houthi authorities of obstructing the delivery of humanitarian aid in territories under their control (see above ‘Access Impediments’).

Human Rights Violations

The Yemeni Journalists Syndicate documented 226 violations of press freedom in 2018. In June, the Yemeni journalist Nabil Subay reported that his colleague Anwar al-Rukn had died one day after his release from prison, where he was tortured and deprived of food during a one-year detention by Houthi forces. In early July, several journalists were detained or kidnapped by different forces across Yemen. In Aden city, security forces detained the chief editor of Aden Tomorrow, Fathi bin Lazraq, before releasing him hours later. Meanwhile, the Yemeni Journalists Syndicate announced that Houthi forces had kidnapped Abdussalam al-Daees, who was working for the Saba News Agency in Sana’a. According to al-Daees, who spoke with the Sana’a Center about his ordeal, after several weeks of detention his health had deteriorated and he was forced to pay large bribes to Houthis commanders in charge of the prison in order to secure his release. He subsequently fled to Cairo to undergo rehabilitation. In September, Houthi authorities then referred 10 journalists, all of whom had been imprisoned for more than three years, to the Prosecutor General’s Office in Sana’a for investigation.

New reports documented arbitrary arrests and mistreatment of prisoners both by Houthi authorities and groups affiliated to the internationally recognized Yemeni government throughout 2018. Investigations shed light on enforced disappearances by UAE military personnel as well as various forms of torture and ill-treatment in prisons controlled by the UAE or its local allies. In May, the government of President Hadi formally asked the UAE about the fate of 12 detainees following public protests by mothers of detainees. In late June and early July, more than 80 detainees were released from prisons run by UAE-backed forces in Aden. Yemen’s deputy Interior Minister Maj. Gen. Ali Lakhsha then stated that all detention facilities had been placed under government control. However, security officials interviewed anonymously by the Associated Press denied this.

Investigations by human rights organizations collected further evidence of enforced disappearances, torture, mistreatment and death sentences following show trials under the Houthi authorities in 2018. Amnesty International concluded in a report published in April that these violations may have amounted to war crimes, given that they took place in the context of an armed conflict.

Houthi leaders also escalated their rhetoric and actions against religious minorities in 2018, especially adherents to the Baha’i faith. In a televised sermon aired in March, Houthi leader Abdulmalik al-Houthi accused the Baha’is of waging a war against Islam, aided by Israel. He also said other minorities – Ahmadis and Christians as well as atheists – posed a threat to Yemen’s Muslims. In January, a special criminal court in Sana’a sentenced Hamed bin Haydara, a prominent Baha’i community leader, to death. Houthi authorities accused him of being an Israeli spy. In September, Houthi authorities opened criminal proceedings against 24 individuals, mostly adherents of the Baha’i faith, among them eight women and a minor. Charges included apostasy and espionage, the latter punishable by death.

Marib in October: Farmers sow potatoes at the start of the agricultural season. Their work has been challenged by soaring prices for seeds and fertilizers as well as diesel shortage // Photo Credit: Ali Owida

Yemen and the World

Overview: Increased Regional and International Engagement

Regional engagement in Yemen intensified through 2018. Aside from leading the coalition military intervention in Yemen, Saudi Arabia and the United Arab Emirates also took steps to secure longer term positions with regard to the country. A primary focus of this was Yemen’s coastal waters, which appeared to be part of a wider regional strategy to solidify control of shipping routes around the Red Sea and the Gulf of Aden. In 2018, Saudi media announced plans for a Red Sea pact among African and Arab states surrounding the body of water, while the UAE continued to secure control over port facilities along Yemen’s southern and western coastlines via local proxy militias. In this context, ousting the Houthi forces from Hudaydah port would be a major step toward establishing dominance along the Red Sea.

Saudi Arabia also attempted to expand its influence in Yemen’s eastern Mahra governorate through building a new army base there, which is suspected to be a forerunner of pipeline plans through the area. This brought geopolitical tension with Oman, which considers Mahra part of its zone of influence and quietly supported local protests there against the Saudi presence.

Meanwhile, a UN Panel of Experts report early in 2018 confirmed that Iranian military technology and parts had been supplied to Houthi forces. While the coalition claimed Iranian support for the Houthis had increased through the war, evidence for large-scale Iranian involvement remained illusive. There were indications, however, that Tehran’s Lebanese ally, Hezbollah, had been providing tactical assistance.

The rift with Qatar appeared to bring new annoyances to the Saudi-led coalition: since its expulsion from the coalition in 2017, Doha has tried to undermine the coalition’s efforts in Yemen. This became more visible in 2018 in the critical reporting on coalition activities in Yemen by the Qatari media empire, first and foremost Al Jazeera. The shifting Qatari role in the region is a development to watch in 2019.

Meanwhile, GCC members Oman and Kuwait continued their efforts to play a more constructive role as mediators in Yemen. Also in the past year, Sudanese politicians questioned their country’s engagement in Yemen, which has involved the deployment of troops and aircraft to Yemen in support of the coalition. Sudan’s leader Omar Bashir, however, reaffirmed his commitment to the Saudi-led intervention.

Remarkably, in the midst of Yemen’s ongoing war, migrants and asylum seekers from the Horn of Africa continued to arrive in Yemen in numbers that exceeded the number of migrant arrivals in Europe in 2018.

The US and the UK continued to support the Saudi-led coalition, while the US adopted a more hawkish stance towards Tehran. In Washington, Mike Pompeo, a hardliner on Iran, took office as US Secretary of State in April. Days later, US President Donald Trump pulled out of the Iran nuclear deal, citing Iranian support for the armed Houthi movement in Yemen among the reasons for the withdrawal. European countries for their part had initiated an ongoing dialogue with Tehran on the region in 2018, spurred by attempts to save the Iran nuclear deal. European diplomats also travelled to Sana’a and met with Houthi representatives. Russia meanwhile, which has little vested interest in Yemen, appeared to be testing mediation waters, positioning itself as a neutral outsider.

Toward the end of the year, the murder of Saudi journalist Jamal Khashoggi stirred a broader debate on arms sales and military support for Saudi Arabia in Western countries allied with the coalition powers. The UK and the US, under pressure to reign in their Gulf ally, publicly called for a ceasefire in Yemen. The UK, as a penholder for the Yemen file in the UN Security Council, increased diplomatic activity in support of the UN Special Envoy for Yemen and drafted a new resolution for the first time since the beginning of the war (see above ‘UN Security Council Ends Impasse on Yemen’).

In perhaps the most significant sign of Washington’s displeasure with Riyadh, the US halted in-air refueling of coalition aircraft in late 2018. Lawmakers in Washington were increasingly critical of US support for the Saudi-led coalition in Yemen. While the legal ramifications of this remained unclear, legislative pressure was likely to increase in 2019, as control of the House of Representatives returns to the Democrats. Following the murder of Khashoggi, several European countries declared that they would stop issuing export licenses for military equipment to Riyadh. The role of the UAE in Yemen meanwhile continued to escape the Western public’s attention.

Yemen and the Region

UAE and Saudi Arabia Expanding Regional Clout

While Saudi Arabia and the UAE, as leading members of the Saudi-led military coalition, have declared that the main aims of their military intervention are to defeat the armed Houthi movement, reinstate the internationally recognized Yemeni government, and curb Iranian influence in the country, they have also established zones of influence in Yemen in the process.

Both Saudi Arabia and the UAE took steps to expand their clout in the wider region around the Red Sea and the Gulf of Aden in 2018. In December, Saudi state media reported plans to establish a Red Sea pact among neighboring Arab and African states after a meeting with officials from Egypt, Djibouti, Somalia, Yemen and Jordan. A peace deal reached between Eritrea and Ethiopia in July, after nearly two decades without diplomatic relations, was brokered with Saudi and Emirati help, removing a major impediment to greater cooperation in the Red Sea Region. Meanwhile, the UAE established a foothold in ports and maritime trade routes all the way from Limassol in Cyprus to the Horn of Africa via the Red Sea, competing at times with other Gulf states such as Qatar, as well as China. While the Dubai-based maritime terminal operator DP World won concessions to operate ports along this route, Abu Dhabi also made arrangements with local authorities for the control of naval bases in Somaliland and Eritrea. In Yemen, the UAE took control over key ports with the help of local allies.

Saudi Arabia maintained a military presence in its border areas in the north of Yemen as well as in Mahra, where it started building army bases and was suspected of developing plans for the construction of an oil pipeline in 2018. As a result, Mahra was transformed into a cold battleground for competing geopolitical aspirations, with Oman, wary of Saudi encroachment in its backyard, supporting local protests against the presence of the coalition. The Saudi-led military coalition justified its deployment in the area by citing the need to curb the smuggling of Iranian military equipment entering Yemen through Mahra. US special forces were deployed alongside the coalition to assist in countering Iranian weapons smuggling (see ‘Mahra: Saudi Arabia Attempting to Limit Omani Clout’).

The UAE was even more active than Saudi Arabia on the ground in Yemen, deploying troops as well as recruiting, funding and training a variety of local proxy forces in southern Yemen. The Emirati military presence at times was met with resistance. While some southern Yemeni factions struck alliances with the UAE, others labeled Abu Dhabi an occupying power. After a spat with the Yemeni government, the UAE was forced to withdraw troops from Socotra island (see ‘Socotra: The Government vs. the UAE’). The UAE in particular sought to establish its influence in Yemen’s coastal areas. Assisted by local allies, the UAE took control of the ports of Aden, Mukalla, and Shihr along Yemen’s southern coast, as well as Mokha port on the Red Sea Coast. Abu Dhabi also took the lead role in planning the June 2018 offensive in Hudaydah that aimed to seize the last Houthi-controlled ports in the country at Hudaydah, Saleef and Ras Issa.

Some have argued that the UAE’s aim in exercising control over Yemen’s ports was to prevent the rise of another port in the region that could compete with Dubai’s less favorably located Jebel Ali port. While this claim may seem far-fetched, there was some evidence of the Emirates obstructing attempts to develop port capacities and establish robust security in Yemen’s coastal areas. Several members of the Aden port administration repeatedly complained to Sana’a Center researchers that the UAE was ignoring, or even actively hampering, the implementation of a blueprint to increase the capacity of Aden port. Several credible sources also corroborated to the Sana’a Center that a Saudi-supported government initiative to establish a task force to deal with coastline smuggling was being obstructed by the UAE.

Iran and Hezbollah

The leading members of the military coalition intervening in Yemen, Saudi Arabia and the UAE, continued throughout 2018 to emphasize Iran’s links with the armed Houthi movement. In a Washington Post op-ed, UAE Ambassador to the US Yousef al-Otaiba said that his country was fighting both al-Qaeda and Iran in Yemen. He also mentioned the UN Panel of Experts report, which established that Iranian missile remnants and military-grade unmanned aerial vehicles (UAVs) of Iranian origin had ended up in the hands of Houthi forces. The coalition and its backers used the report to support their claim that Tehran was directly providing Houthi forces with missiles and drones. The latter have used such increasingly as the war proceeded (see ‘Houthi Missiles and Drones‘).

Although reports alleging Iranian support for the Houthi forces continued to increase as the war progressed, evidence remained scant. There were indications that Tehran was channeling support to the armed Houthi movement via its Lebanese ally Hezbollah. The militia-cum-political party is widely thought to have provided military advice to Houthi forces. The Yemeni government also accused Hezbollah of sending fighters to assist the Houthi forces, which Hezbollah has denied. In June 2018, Hezbollah leader Hassan Nasrallah denied reports that coalition airstrikes had killed eight Hezbollah fighters in Yemen, but expressed his party’s support for the armed Houthi movement. In August, Hezbollah confirmed that Nasrallah had met with a Houthi delegation led by Mohammed Abdel Salam, a senior Houthi negotiator and spokesperson, to discuss developments in Yemen.

Iran provided direct financial support for two Houthi-affiliated TV stations based in Lebanon, Sahat and al-Masirah, paying for equipment and salaries for the Yemeni staff, including correspondents based in Yemen. According to sources at the stations who spoke with the Sana’a Center. after sanctions against Iran were reinstated following the US decision to withdraw from the nuclear deal with Tehran, salaries started to arrive late. In his last visit to Lebanon, Abdel Salam met with staff from both channels, and assured them that Houthi authorities would continue funding to both channels if Iran cut its support, according to staff from the channels who attended the meeting.

A Divided Arab Gulf

While Saudi Arabia and the UAE continued to spearhead the coalition military intervention in Yemen, other members of the Gulf Cooperation Council (GCC) have not followed their lead. Oman declined to join the coalition when it was formed in 2015, preferring to stick to its traditional role as mediator in the region. Meanwhile, Qatar was expelled from the coalition in 2017 as part of the Saudi-initiated blockade against the country in 2017. Following this diplomatic split, Qatari policy toward Yemen shifted.

Following the start of the Saudi-led blockade, the Qatari-owned news channel Al Jazeera for the first time changed its tone in reporting on Yemen, becoming harshly critical of the Saudi-led military coalition. Since then, Al Jazeera and other Qatari media outlets have beefed up their Yemen coverage. While other factors, such as the threat of famine and the Khashoggi case, played a major role in the expanded and increasingly critical coverage of the Saudi-led Yemen intervention in international media in general, the Qatari media empire contributed a sizeable share to critical reporting in 2018.

Evidence for other claims about Doha attempting to undermine the coalition in Yemen remained anecdotal. There were indications of Qatar establishing connections with groups in Yemen opposed to the coalition. For example, Houthi negotiator and spokesman Mohammed Abdel Salam confirmed to the Sana’a Center that he traveled to Doha in 2018. Meanwhile, the son of Hassan Baoum, the famous leader of the Southern Movement’s anti-coalition branch that has preserved ties with Iran, relocated from Beirut to Doha. Qatar, together with Turkey, also maintained its strong relations with members of the Islah party, which is part of the anti-Houthi alliance but has a tense relationship with the UAE due to the party’s ties to the Muslim Brotherhood.

While Qatar was the most outspoken GCC member in its critical view of Saudi and Emirati policy in the region, Oman and Kuwait also deviated from the hawkish approach taken by Abu Dhabi and Riyadh in Yemen and elsewhere. Kuwait, a member of the Saudi-led military coalition, on the one hand, used its position as a non-permanent member at the UN Security Council to lobby for coalition-friendly positions at the council. On the other hand, Kuwait also maintained a diplomatic approach to the region, including maintaining relatively friendly ties with Iran. In Yemen, it positioned itself as a mediator in 2016 when it hosted UN-led peace consultations. The UN Special Envoy for Yemen Martin Griffiths, after meeting the Emir of Kuwait in July 2018, stated that Kuwait should play a role in resolving the Yemen conflict. Kuwait provided the airplane for the Houthi delegation that traveled from Sana’a to attend the peace consultations in Sweden in December, with the Kuwaiti ambassador to Yemen accompanying the Houthi delegation on the flight (see ‘Failure in Geneva, Success in Rimbo’).

Oman continued to maintain its friendly ties with all actors in the region, including the armed Houthi movement in Yemen. This provided Saudi Arabia with a backchannel of communication to the group via Muscat, which eventually led to Saudi officials holding conversations with Houthi representatives, facilitated by the UK, in the Omani capital in 2018. In order to fulfil a precondition set by the Houthi leadership for attending the UN-led peace consultations in December, Muscat also facilitated the evacuation of some 50 injured Houthi fighters out of Sana’a to receive medical treatment in Oman. Muscat had also been involved in negotiating the release of a French sailor in October, who had been detained by Houthi forces after making an emergency landing in Hudaydah earlier in the summer (see ‘Europe Steps Up Engagement’).

Oman’s foreign policy approach of open communication even extended to a meeting between Omani rule Sultan Qaboos bin Said al-Said and Israeli Prime Minister Benjamin Netanyahu in October. After Netanyahu’s visit to Oman, the first by an Israeli prime minister since 1996, Oman’s foreign minister said his country was offering ideas to help regional peace efforts. This direct diplomatic engagement with Israel implicitly distanced Oman from being seen as aligned with Iran and the armed Houthi movement, upsetting Houthi ideologists who had praised Oman and whose sermons often revolve around hatred for the US and Israel.

At the same time, the increased Saudi military presence in Mahra governorate, which borders Oman to the east and has traditionally had close ties to Muscat, was a source of tension between Saudi Arabia and Oman (see ‘Mahra: Saudi Arabia Attempting to Limit Omani Clout’).

Controversy in Sudan Over Troops in Yemen

In May 2018, Sudan’s President Omar Bashir defended Sudanese troop deployments as part of the Saudi-led military coalition. Weeks earlier, Defense Minister Ali Salem told the Sudanese parliament that the government was reconsidering its participation with the coalition in Yemen. Discontent within the parliament had been growing over the cost of the deployment and the deaths of Sudanese troops. In April, dozens of Sudanese soldiers were reportedly killed in a Houthi ambush. Some parliamentarians argued that Sudan was not benefiting from its contribution to the Yemen war and complained about insufficient Saudi and Emirati financial support for its own faltering economy.

Sudan has deployed at least 3,000 ground troops and several fighter jets to Yemen since joining the Saudi-led military coalition in 2015. Some media reports also mentioned that between 10,000 and 14,000 Sudanese militiamen were on the ground fighting in Yemen. Most of these were from the Sudanese tribal militia formerly known as Janjaweed, which was notorious for having committed war crimes during the Darfur conflict. These reports indicated that hundreds of Sudanese had been killed in Yemen. The New York Times also reported that there were child soldiers among the Sudanese militiamen, though Saudi Arabia denied these claims.

Migration from the Horn of Africa

Despite the war and the catastrophic humanitarian situation in Yemen, migrants and refugees from the Horn of Africa continued to enter the country. In fact, the International Organization of Migration (IOM) noted a surge in new arrivals in 2018. The agency counted almost 150,000 migrant arrivals in Yemen, almost double the 87,000 documented in 2017. Remarkably, more documented migrants and asylum seekers reached Yemen in 2018 than Europe, where the IOM counted some 140,000 arrivals for the whole year.

According to IOM, the majority of migrants arriving in Yemen were Ethiopian, in addition to some Somalis. Migrants and asylum seekers mostly travel via a land route to Djibouti before embarking on a risky boat journey across the Gulf of Aden to reach Yemen, from where they usually hope to continue on to Saudi Arabia and other Gulf states. These boat journeys frequently end in tragedy. Since the beginning of 2014, the IOM has documented more than 700 deaths of migrants in the Gulf of Aden.

There were several such incidents in 2018. In September, the IOM reported that at least 33 out of a group of 360 migrants from Somalia and Ethiopia had drowned off the coast of Shabwa after smugglers had forced them into the sea from two overcrowded boats. In Yemen, migrants risked exposure to the war, kidnapping, and torture by local authorities. In April, HRW published a report on human rights violations against hundreds of detained migrants and asylum seekers in a government-controlled prison in Aden. The report documented violations such as torture, rape, executions and forced deportations.

In its latest regional migrant response plan released in August, the IOM also estimated that some 150,000 Ethiopian and 50,000 Somali nationals returned from Yemen and other Gulf states to their home countries in 2018. The IOM frequently organizes the maritime evacuation of migrants and refugees from Yemen back to the Horn of Africa, at times working in conjunction with UNHCR, the UN refugee agency. After the start of the battle for Hudaydah in June (see ‘The Battle For Hudaydah’), the voluntary return program was put on hold. The IOM at the time estimated that thousands of migrants were stranded in and around frontline areas.

Allies of the Coalition: US and UK Policy Toward Yemen

Increasing Domestic Pressure Over US Role in Yemen

At the close of 2018, the US Senate voted to withdraw support for the Saudi-led military coalition, rounding off a year of growing pressure on the White House related to Washington’s involvement in the conflict in Yemen. As with most of the draft legislation aimed at changing US policy toward Yemen over the past year, Senate Joint Resolution 54 (S. J. Res 54) is unlikely to become law. Instead, it is the political weight of such moves in Congress that may prove instrumental in 2019, with the Trump administration set to face ever-greater scrutiny and increased oversight from the newly Democrat-controlled House of Representatives.

The US said in April that support for the Saudi-led military coalition in Yemen was limited to intelligence sharing, logistical support (including target vetting), border defense in Saudi Arabia and until November, mid-air aircraft refueling. Perhaps more valuable though, is the reputational cover Washington offers the coalition through its public support for the campaign against the Houthi movement, especially at the UN Security Council. Trump’s decision to withdraw the US from the Iran nuclear deal in May – and exaggerating Iran’s role in the Yemen conflict as among the justifications – should be understood in this context. US support for Riyadh has translated to strategic decisions on the ground in Yemen. Despite warnings from the UN and international community, the Saudi-led military coalition launched a long-expected offensive on Hudaydah port in June 2018 following what was described as a US “yellow light” for the assault. The exact nature and extent of US involvement in Yemen continues, however, to be somewhat ambiguous, with mixed messaging between and within the executive branch and the US military, and distanced and weakened leadership from the State Department.

Legislative Pressure

The December Senate vote to end involvement in Yemen was indicative of a shift in lawmakers’ positions on US policy toward the war. S. J. Res. 54 called for the end of US involvement in the Yemen conflict within 30 days, excluding operations against AQAP. The resolution passed by a 56-41 vote margin, a far cry from an attempt in March to pass the same bill, which failed in its first stage after garnering only 44 votes. Importantly, seven Republicans voted to adopt the resolution in December.

It is unlikely that the bill will ever become law; there is an ongoing debate around the constitutionality of the legislation upon which it rests – the 1973 War Powers Resolution, which asserts that Congress has the sole constitutional privilege to declare war. Republicans blocked debate on a similar bill in the House of Representatives in September, and, although it may see a warmer reception from a Democratic-controlled House in 2019, the Trump administration has said that it would veto the legislation should it be approved by both chambers and make it to the Oval Office for signature by the president.

Underpinning S. J. Res. 54 is growing concern regarding opaque US troop deployments abroad with little or no congressional oversight, largely ratified by the 2001 Authorization for Use of Military Force Against Terrorists passed in the wake of September 11. Mission creep has been witnessed in Yemen itself, with reports emerging in May that US special forces were assisting Saudi Arabia in destroying Houthi forces’ weapons caches near the border with Yemen. The Sana’a Center has also learned that US special forces were deployed to Mahra governorate in eastern Yemen to help the Saudi-led military coalition curb weapons smuggling into Yemen. The Pentagon maintained that its direct military operations on Yemeni soil only targeted AQAP, chiefly in the form of a 16-year drone campaign.

US legislation relating to Yemen increased political pressure on the White House throughout 2018. Although the legal ramifications are still unclear, the bills have succeeded in keeping the conflict on the agenda in Congress and mandating further action – even if only forcing the administration to publicly defend its current policy. Ahead of the vote on S. J. Res. 54, Secretary of State Mike Pompeo and Secretary of Defense Jim Mattis gave a private briefing to senators on US involvement in Yemen, which Bob Corker, outgoing Republican chair of the Senate foreign relations committee, characterized as “lacking.”

This ongoing political pressure also manifested itself in September when an amendment to the National Defense Authorization Act (NDAA) – the yearly defense spending bill – required State Department certification of the Saudi-led coalition’s efforts to minimize civilian casualties and address the humanitarian emergency in Yemen as a condition for continued US support. Secretary of State Mike Pompeo’s subsequent certification was met with backlash in Congress, the press, and within the State Department itself – coming less than a month after a coalition airstrike on a bus killed 44 children in Sa’ada governorate using a US-supplied bomb.

The NDAA requires further certifications in 2019, calling on the State Department to defend what many have characterized as an indefensible assessment of coalition operations. Larry Lewis, a former State Department adviser who worked with the Saudi-led military coalition until May 2017 on measures to reduce civilian harm, told the Sana’a Center in September that “objectively, [Pompeo’s] conclusion is false”.

The NDAA also called for a Pentagon review of US conduct relating to alleged abuse and torture in UAE-run prisons in southern Yemen, following investigations by HRW, the AP and the UN Panel of Experts. The AP report claimed that US personnel participated in interrogations of detainees who had been subjected to torture.

Meanwhile, the White House also announced in July that it would extend the Temporary Protected Status (TPS) designation by at least 18 months for Yemenis who arrived in the US before early 2017. TPS affords legal status to an estimated 1,200 Yemeni nationals based in the US. Meanwhile, on June 26, the US Supreme Court upheld President Trump’s September 2017 executive order restricting entry to the US for nationals from eight countries, including Yemen, by a 5-4 margin. While the ban applied to a narrower group of visa applicants from the named countries than its previous iterations, this updated version contained no end date.

The Khashoggi Effect

The murder of the Saudi journalist Jamal Khashoggi in October and allegations of Saudi state complicity put the spotlight on Riyadh’s foreign policy and human rights record – including in Yemen. In response, a flurry of bills were introduced seeking to end or limit arms sales to Saudi Arabia, while a Senate resolution adopted in December – the same day as the vote on S. J. Res. 54 – linked the Khashoggi killing with the war in Yemen, blamed Saudi Crown Prince Mohammed bin Salman for the murder, and called for an immediate ceasefire in Yemen and cessation of support for the Saudi-led military coalition.

While the Trump administration has been at pains to separate the Khashoggi killing from the conflict, Democrats have pushed to include US policy toward Yemen in draft legislation condemning Saudi Arabia for the journalist’s death. While there was a risk that such bills would be torpedoed given polarization in Congress over Washington’s role in Yemen, the linking of the two issues proved beneficial to Yemen-related legislation at times; Senator Lindsey Graham (R-SC) said that he voted for S. J. Res. 54 at the committee stage in November because of his frustration over the administration’s handling of the Khashoggi affair, even though he disagreed with the underlying resolution itself.

A Policy Shift?

Developments toward the end of 2018 were suggestive of the start of some sort of shift in US policy on Yemen. This occurred simultaneously to growing diplomatic momentum backing UN-brokered talks between the Yemeni government and the Houthi movement. At the end of October, both Pompeo and Mattis called for a ceasefire in Yemen within 30 days and urged all parties to participate in UN-brokered peace talks to end the conflict. These were the first public comments related to Yemen since Khashoggi’s disappearance and constituted a strong political message from the White House, which was grappling with the strongest domestic criticism of its Gulf ally Saudi Arabia since the September 11 attacks in 2001. Shortly after the public calls for a ceasefire, 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.”

Just over a week later, on November 9, the Saudi-led military coalition announced that it would no longer require US support for mid-air refueling operations for their fighter aircraft over Yemen, saying that it now had the capabilities to do so independently. This refueling had been a cornerstone of US military support for the coalition and was the subject of staunch criticism domestically, given its central role in facilitating coalition airstrikes, which the UN says have been responsible for the majority of civilian deaths in Yemen since 2015.

Sana’a Center sources said at the time that the decision to halt refueling originated in Washington, with the announcement by the Saudi-led coalition’s Joint Forces Command agreed upon as a face-saving measure. Longtime opponents of US involvement in Yemen praised the development as a “major victory”, and NBC News quoted a Senate staffer as saying that the decision was intended to pre-empt a more wide-ranging vote in Congress on US support for the Saudi-led military coalition, a claim echoed by US-based analysts.

Looking to 2019

Throughout 2018, as opposition to Washington’s role in Yemen gathered pace and was then turbocharged by the outcry over Khashoggi’s death, President Trump consistently dug his heels in on the US-Saudi relationship. His public justifications for this support were the usual considerations: the long-standing alliance between the countries, valuable arms and business deals, counter-terrorism coordination, and the perceived need to help the US Gulf allies counter “Iranian expansionism” in the Middle East.

The Trump administration regularly depict the Yemen conflict as nothing more than an expression of a regional conflict in which Tehran is master of its Houthi puppets. Washington’s Iran hawks were emboldened by Trump’s withdrawal from the Iran nuclear deal in May and regard both Yemen and Syria primarily as battlegrounds to curb what they see as Tehran’s growing regional influence.

Sana’a Center discussions with UNSC member state representatives and diplomats from European countries during 2018 indicated that the US was continuing to pressure other countries to adopt a more hawkish posture toward Iran – often by alluding to Tehran’s involvement in the Yemen war. Outgoing US Ambassador to the UN Nikki Haley on several occasions urged the Security Council to take action on Iran, citing alleged violations of the UN arms embargo on Yemen.

A continued legislative push around US policy in Yemen was expected for 2019, revitalized by a Democratic majority in the House – although such efforts will be competing with other foreign policy priorities. The resignation of Secretary of Defense James Mattis in December, following Trump’s decision to pull US troops out of Syria, added some uncertainty regarding the administration’s policy in the region moving into 2019. Though moderately hawkish on Iran and a staunch defender of current US policy in Yemen, the defense chief was widely regarded as a steady hand within the Trump administration.

The UK Starts Pushing for Negotiations

While the UK continued in 2018 to provide support to the Saudi-led military coalition in Yemen, primarily through arms sales to Saudi Arabia, its visible role in the conflict remained limited. Much as with the US, UK policy related to Yemen was largely driven by economic and counter-terrorism considerations, as well as its long-standing alliances with Riyadh and Abu Dhabi.

Opposition to UK policy toward Yemen continued in parliament, which remained divided over weapons exports to Saudi Arabia. On March 7, the same day as Crown Prince Mohammed bin Salman arrived in the UK on a three-day visit, Labour Party leader Jeremy Corbyn said in a House of Commons debate that British military advisers were “directing the war” being fought by the Saudi-led military coalition in Yemen. Corbyn accused the UK government of complicity in war crimes through this support and British arms sales to Riyadh. Saudi Arabia is the largest buyer of UK arms, the destination of nearly half the UK’s total sales to all countries across the period 2010-2017. The following day, Prime Minister Theresa May’s meeting with the Saudi crown prince prompted protests near Downing Street against Britain’s role in the conflict. A joint statement released by the parties following the meeting affirmed the need for a political solution to the war in Yemen. The UK also “welcomed” Riyadh’s “continuing commitment to ensuring that the coalition’s military campaign is conducted in accordance with international humanitarian law.”

Days after the meeting between May and Mohammed bin Salman, the UK government approved the sale of 48 Typhoon fighter jets to Saudi Arabia. Although details of the deal were not released, a previous UK agreement with Qatar to sell half as many Typhoons aircraft was worth close to US$7 billion. However, following the death of journalist Jamal Khashoggi in October 2018, there were renewed calls for a review of UK arms sales to Saudi Arabia.

In July, May appointed Jeremy Hunt the UK’s new foreign secretary, to replace Boris Johnson. As foreign secretary, Hunt championed the continuation of UK policy on Yemen, including weapons sales and support for the Saudi-led military coalition, although public statements were tempered slightly after the death of Khashoggi. In November, Hunt backed US calls for a ceasefire in Yemen during meetings in Riyadh and Abu Dhabi. Shortly after, he traveled to Tehran for talks with his Iranian counterpart, whom he called on to pressure Houthi authorities to attend the UN-brokered talks in Sweden.

These moves came against the backdrop of a drive by the UK’s UN delegation for a new UN Security Council resolution on Yemen, which eventually passed in December. While the language of the final resolution was watered down under pressure from the US and Kuwait, its passage was indicative that the UK could play a more active role in diplomatic efforts to end war going into 2019. As penholder for Yemen at the UN Security Council since 2011, the UK had been instrumental in the council’s relative inaction over the conflict.

Other World Powers: Between Peace Brokers and Arms Dealers

Europe Steps Up Engagement

Diplomatic activity from Europe increased in 2018 with regards to Yemen and outreach to all actors involved in the conflict. The European Union (EU) and several European governments in particular attempted to establish lines of communication with Iran and the Houthi leadership, advocating that the parties support a political settlement to the conflict. While the Saudi-led military coalition receives direct support from the US and the UK, who in turn have the leverage to pressure both Saudi Arabia and the UAE, Europe has been capitalizing on being perceived as relatively neutral in Yemen, with good diplomatic ties not only with coalition powers but also with Tehran.

In early 2018 European officials opened a dialogue with Tehran on several regional issues, including the conflicts in Syria and Yemen. Government officials in various European capitals told the Sana’a Center that efforts to save the nuclear deal were ongoing and said that the Yemen conflict was on the agenda for talks with Tehran, which had expressed a willingness to facilitate talks with the Houthis. The talks regarding Yemen were held in parallel to discussions over the future of the Iran nuclear agreement initiated in the runup to President Trump’s decision to pull the US out of the deal. The initial intent was to address Washington’s concern regarding Iran’s regional role and to showcase Europe’s ability to mediate with Tehran. The first dialogue was initiated on the sidelines of a security conference in Munich in February. Two follow-up consultations were later held in Rome and Brussels, with France, Germany, Italy, and the UK meeting with a delegation from Iran.

Several European leaders also reached out directly to the Houthi leadership in 2018. During June and July, leading diplomats from Sweden, France and the EU met with Houthi officials in Sana’a. Among them was the head of the EU Delegation to Yemen, Antonia Calvo-Puerta, who met with Houthi leader Abdulmalek al-Houthi and Mahdi al-Mashat, the head of the Houthi government body. On July 18, a French delegation led by the French ambassador to Yemen met with Houthi officials in Sana’a. France notably had domestic reasons for talking with Houthi representatives too, after a French sailor was imprisoned by the group in June. The sailor, who had been detained by Houthi forces in Hudaydah after landing there due to damage to his ship, was released in October.

The Houthi leadership – after the killing of their former ally Ali Abdullah Saleh, who had managed the alliance’s international relations – also undertook its own diplomatic outreach initiatives in 2018. Senior Houthi negotiator Mohammed Abdel Salam in March confirmed to the Sana’a Center that he had discussed issues regarding peace consultations during visits to Turkey and Germany.

Although developing a coherent European foreign policy position toward the Yemen conflict remained a challenge due to diverging priorities among its member states, some unified action was undertaken. In early October, the European Parliament voted in favor of a resolution calling for a cessation of hostilities in Yemen, the resumption of peace talks and the implementation of confidence-building measures. The resolution also tasked the EU’s foreign policy chief, Federica Mogherini, with developing a comprehensive EU strategy for Yemen.

Controversies Over EU Arms Exports

The disappearance and later confirmed death of the Saudi journalist Jamal Khashoggi in October added significantly to the pressure on European governments to halt arms sales to Saudi Arabia, while also drawing attention to the Saudi-led military intervention in Yemen, including in the EU Parliament. In October, the European Parliament voted in favor of a resolution calling for an investigation into the Khashoggi murder that mentioned possible Saudi violations of humanitarian law in Yemen. The next month, a resolution was adopted that judged arms exports by EU member state to the Saudi-led military coalition to be in non-compliance with EU standards for the export of military equipment adopted in 2008.

Prior to the death of Khashoggi, some governments had already restricted weapons deals to the Saudi-led coalition. In June, Belgium suspended a number of licenses of arms manufacturer FN Herstal to export arms to Saudi Arabia. On September 4, Spain announced the cancelation of a 2015 arms sales contract with Saudi Arabia after a Saudi airstrike on a bus killed 44 children in August. On September 12, however, Spain reversed this decision. Saudi Arabia had, according to Spanish media, threatened to cancel a 1.8 billion euro order of corvette-class warships from Spain’s Navantia ship-building company, which would have put thousands of Spanish jobs at stake.

Germany’s new governing coalition stipulated in March that it would cease weapons sales to countries involved in the Yemen war. However, German media reported in September that the government had still authorized arms deals with Saudi Arabia, the UAE and Jordan. In November, in the wake of the Khashoggi killing, the German government publicly declared a halt to all arms shipments to Saudi Arabia. Again, German media reported in December that Berlin, contrary to its public pronouncements, was continuing to export military equipment to Riyadh. According to a government written response to a parliamentary inquiry, while the German government had indeed not issued new export licences to Saudi Arabia during the last three months of 2018, this was not the case for other members of the Saudi-led military coalition.

Norway, Denmark and Finland announced in November they would halt arms export licenses to Saudi Arabia while Finland also ceased the sale of military equipment to the UAE. In late December, Italian Prime Minister Giuseppe Conte announced that his government intended to halt arms sales to Saudi Arabia.

French President Emmanuel Macron criticized the response of other European governments, saying that there was no link between arms sales and the Khashoggi affair. France is third largest arms vendor to Riyadh and Abu Dhabi after the US and UK. Civil society groups in France increased pressure against the French government over the weapon sales prior to visits by Saudi Crown Prince Mohammed bin Salman and Emirati Crown Prince Mohammed bin Zayed in April and November respectively. In a somewhat unsuccessful attempt to appease the French public, France and Saudi Arabia co-hosted a humanitarian conference on Yemen in Paris in June. In response, 30 humanitarian organizations voiced heavy criticism of the event, stating that the conference lacked credibility with Saudi Arabia as a co-host. The event ended with no clear outcome.

Canada Calls for Ceasefire, Continues Arming Belligerents

On October 22, Canada’s opposition left-wing New Democratic Party (NDP) 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. At issue was an ongoing deal worth CAN$15 billion for defense contractor General Dynamic Land Systems Canada to deliver hundreds of weaponized Light Armored Vehicles (LAV) to Saudi Arabia, which Riyadh has been deploying in the Yemen conflict. The contract also supports thousands of manufacturing jobs in southern Ontario, an area considered pivotal for Prime Minister Justin Trudeau’s Liberal party in the upcoming 2019 Canadian federal election.

Canada’s Foreign Minister Chrystia Freeland had defended the arms dealing by saying its cancelation would harm Canada’s reputation, while following the NDP’s calls, Trudeau decried that it would cost Canada CAN$1 billion to cancel the deal, though he later added that his government was looking for ways to end the contract.

On November 1, Freeland issued a statement echoing other Western governments in calling for a ceasefire in Yemen and supporting the UN Special Envoy’s peace efforts.

“We remain deeply concerned by reports that all parties to the conflict have repeatedly contravened international law,” she said. On December 23 another batch of Canadian-made LAVs was loaded onto a container ship in eastern Canada and shipped to Saudi Arabia.

Russia Tests Mediation Waters

While Russia has little vested interest in Yemen, it made indications in 2018 that it was interested in playing a role as a mediator, including in regard to the conflict in southern Yemen that erupted in January in Aden between government and UAE-backed forces (see ‘Aden: Hadi, Islah vs. UAE-backed Secessionists, Salafis’). In April, Russia’s Envoy to the Middle East and Deputy Foreign Minister Mikhail Bogdanov stated that his country was ready for any role that “serves peace, security, and stability in Yemen” after he met with President Hadi on the sidelines of the 29th Arab League Summit in Saudi Arabia. Russia played the counterweight against allies of the Saudi-led military coalition in the UN Security Council when in February, Moscow used its veto power to kill a draft resolution on Yemen that it saw as biased against Iran (see ‘UNSC Deadlocked Throughout Most of 2018’).

In June, both the Houthi leadership and the Yemeni government made overtures to Moscow. Mahdi al-Mashat, the head of the Houthi government body in Sana’a, in a letter requested that Russian President Vladimir Putin provide assistance in negotiating a political settlement to the conflict. Days later, Mansour Baggash, the Yemeni government’s Under-Secretary of State for Political Affairs, met with Russia’s Ambassador to Yemen in Riyadh. According to Yemen’s Ministry of Foreign Affairs, the Russian ambassador reiterated Moscow’s support for the internationally recognized Yemeni government and a political solution to the conflict.

List of Acronyms

ACLED Armed Conflict Location & Event Data Project
AP Associated Press
AQAP Al-Qaeda in the Arabian Peninsula
CBY Central Bank of Yemen
CENTCOM United States Central Command
Daesh (The so-called Islamic State group)
EU European Union
GCC Gulf Cooperation Council
GEE UN group of eminent international and regional experts
GPC General People’s Congress
HRW Human Rights Watch
ICRC International Committee of the of Red Cross
IOM International Organization of Migration
LAV Light Armored Vehicles
MSF Médecins Sans Frontières
NDAA National Defense Authorization Act
NDC National Dialogue Conference
NDP New Democratic Party
NGO Non-Governmental Organization
NYT New York Times
RCC Redeployment Coordination Committee
SPC Supreme Political Council
STC Southern Transitional Council
TPS Temporary Protected Status
UAE United Arab Emirates
UK United Kingdom
UNHCR United Nations Refugee Agency
UNICEF United Nations Children’s Fund
UNOCHA United Nations Office for the Coordination of Humanitarian Affairs UNSC United Nations Security Council UNVIM United Nations Verification and Inspection Mechanism
UAV Unmanned Aerial Vehicles
US United States
WFP World Food Program
WHO World Health Organization
YCHO Yemen Comprehensive Humanitarian Operations
YHRP Yemen Humanitarian Response Plan
YPC Yemen Petroleum Company

Acknowledgments

The Yemen Annual Review 2018 required the steadfast commitment of a team of individuals from across Yemen and around the globe. Without them, this document would never have come to fruition. They are (in alphabetical order): Ali Abdullah, Yaaser Azzayyaat, Ryan Bailey, Anthony Biswell, Monika Bolliger, Ziad Al-Eryani, Hamza al-Hammadi, Waleed Alhariri, Taima Al-Iriani, Raed Khelifi, Sajeela Munir, Spencer Osberg, Hannah Patchett, Ghaidaa Alrashidy, Osamah al-Rawhani, Sala al-Sakkaf, Victoria K. Sauer, Holly Topham, and Aisha al-Warraq. The Sana’a Center would also like to recognize the hard work and dedication of the dozens of researchers who must remain unnamed, and the sources who have helped provide invaluable insights.

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.

The Yemen Annual Review 2018 was developed with the support of the Kingdom of the Netherlands and the Friedrich-Ebert Yemen office.

Program/Project: The Yemen Review

Starvation, Diplomacy and Ruthless Friends: The Yemen Annual Review 2018

Hani al-Moalem overlooks Taiz from the wreckage of his café. He used to own six such businesses in the city, all of which the war has left either fully or partially destroyed // Photo Credit: Anas al-Hajj

The Sana’a Center Editorial:

Beyond the Brink

Contents

Diplomacy Gains Momentum

Hudaydah, the Heart of the Crisis

Economic Developments

Political Developments

Frontline Developments

Humanitarian Developments

Human Rights and War Crimes

Yemen and the World

Mukalla in September: Protesters block streets and burn tires in one of many demonstrations across the country as the collapsing currency sends food and fuel prices soaring // Photo Credit: Suliman al-Nowab

Diplomacy Gains Momentum

Overview: The Road to the Sweden Talks

The Stockholm Agreement

A UN-Monitored Ceasefire in Hudaydah

A Joint Committee for Taiz

Prisoner Exchange

UN Security Council Ends Impasse on Yemen

UNSC Deadlocked Throughout Most of 2018

Breakthrough in December

On August 2, UN Special Envoy for Yemen Martin Griffiths briefs the UNSC about plans to bring the country’s belligerent parties together for peace consultations in Geneva the following month // Photo Credit: UN Photo/Manuel Elias

The New UN Special Envoy

Building Relations with Houthi Leaders and the STC

Hudaydah Proposal

Economic Consultations

Negotiations Framework

Failure in Geneva, Success in Rimbo

Hudaydah, the Heart of the Crisis

Overview: The Significance of Hudaydah

Preparing for the Offensive

The Battle For Hudaydah

Source: Sana’a Center research // Graphic: Ghaidaa Alrashidy

Humanitarian and Economic Fallout

Economic Developments

Overview: The Struggle for Financial and Monetary Control

The Currency Crisis and the Threat of Famine

Sources: CBY, WFP, and Sanaa Center Economic Unit

Food and Fuel Price Spikes Slow to Recede

Sources: WFP and Sanaa Center Economic Unit surveys for 2018

Factors Destabilizing the Yemeni Rial

Unregulated Fuel Importers and Unlicensed Money Exchangers

Sources: WFP and Sanaa Center Economic Unit surveys for 2018

Increased Money Supply

Decreasing Remittances

Stabilizing Influences on the Yemeni Currency and Economy

More Than US$2 Billion in Saudi Deposits and Fuel Grants

Limited Gains in Oil Exports

Aden’s New CBY Governor, the Economic Committee and Import Regulation

Restarting Public Debt Issuance and International Grants

Sana’a in August: People buy food and gifts in a market in Sana’a in preparation for the Muslim holiday of Eid al-Adha // Photo Credit: Thy-Yazen

Competing Monetary Policies: A Tale of Two Central Banks

Houthi Authorities Challenge Government Policies

Houthi Authorities Strengthen Their Grip Over the Economy

Telecom Companies Caught in Sana’a-Aden Rivalry

War Economy Sees Cooperation Between Battlefield Adversaries

Macroeconomic Overview*

The Yemeni Government’s “Austerity Budget”

Political Developments

Overview: Fragmentation in South, Hardliners Ascend in North

Cracks Within the Anti-Houthi Alliance

Aden: Hadi, Islah vs. UAE-backed Secessionists, Salafis

Hadramawt: Ali Mohsen, Islah vs. UAE-backed Local Forces

Marib: Islah, Tribes and the Saudis United in Federalism

Taiz: Islah Forces Oust Rivals

Source: Sana’a Center research // Graphic: Ghaidaa Alrashidy

Red Sea Coast: Tariq Saleh Switches Sides

Socotra: The Government vs. the UAE

Mahra: Saudi Arabia Attempting to Limit Omani Clout

A New Prime Minister, a President in Bad Health

Maeen Abdul Malik Replaces Bin Dagher as PM

President Hadi’s Health in Doubt

Houthi Hardliners On The Rise

Moderates Silenced After the Deaths of Saleh And al-Samad

Spreading Sectarianism and Fear

The GPC in Crisis

Taiz in August: A tank from the Islah-affiliated 17th infantry brigade in action. Islah-affiliated anti-Houthi forces have ousted rivalling allies from parts of the governorate, as clashes with the Houthis were ongoing // Photo Credit: Ahmed Basha

Frontline Developments