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11. Addressing the Crushing Weight of Yemen’s Public Debt

Author:
Sana'a Center Economic Unit
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Sana'a Center For Strategic Studies
Abstract:
For decades prior to the ongoing conflict, Yemen had been vulnerable to recurring budget deficits due to a lack of meaningful fiscal reform, high recurrent expenditures – mainly public sector salaries and fuel subsidies – and an overdependence on oil revenues. While foreign debt obligations remained low, the debt market was poorly diversified, with treasury bill holders narrowly concentrated within the banking sector and government bonds held almost exclusively by public pension funds. The escalation of the ongoing conflict in 2015 has had a profoundly negative impact on Yemen’s debt position. Large-scale oil exports ceased, leading to a collapse in public revenues, while banks and pension funds stopped purchasing government debt instruments. Management of the public debt became bifurcated between rival central bank administrations in Aden and Sana’a, both of which suspended payments on foreign and domestic debt obligations. Unable to receive interest payments, public debt holders faced a liquidity crisis, leaving banks unable to honor customer obligations and threatening their solvency, while pension funds have struggled to support retirees. On January 25-27, 2021, senior Yemeni experts and professionals convened virtually for the 7th Development Champions Forum (DCF), as part of the Rethinking Yemen’s Economy initiative, to discuss the evolution and structure of Yemen’s public debt, the dynamics during the conflict that have led to its colossal expansion, and the macroeconomic risks it poses. This was followed a week later with a briefing for international stakeholders on February 2. These discussions formed the basis for the research presented in this paper and its recommendations for addressing Yemen’s public debt crisis. Addressing the Crushing Weight of Yemen’s Public Debt - Sana'a Center For Strategic Studies https://sanaacenter.org/publications/main-publications/18247
Topic:
Budget, Economy, Armed Conflict, and Public Debt
Political Geography:
Middle East, Yemen, and Gulf Nations

12. Local Economic Councils: A Tool to Improve Business Productivity in Yemen

Author:
Sana'a Center for Strategic Studies
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Sana'a Center For Strategic Studies
Abstract:
Even before the events of 2014 and 2015 that led Yemen into the ongoing civil war, its economy was fragile. The years of hardship that have haunted the country ever since have been devastating. Yemen is now rated as one of the hardest places in the world for businesses to operate and is last or near last in a host of global business competitiveness indexes. From January 25-27,2021 the seventh Development Champions Forum, held virtually, focused on this dire national situation. To help address local economic challenges, the Development Champions discussed the possibility of establishing Local Economic Councils. According to their analysis, between the existing community-level local development committees (which guide targeted, small scale infrastructure investment from development funds such as the Social Fund for Development and the World Bank) and the Supreme Economic Council (which guides sector-led state investment at a national level), a space exists for a governorate-level body to drive development by guiding investment to serve local needs and strengthen ties between the governorates and the private sector.
Topic:
Development, Economy, Business, Conflict, and Local Councils
Political Geography:
Middle East and Yemen

13. Priorities for the Recovery and Reform of the Electricity Sector in Yemen

Author:
Akram M. Almohamadi
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Sana'a Center For Strategic Studies
Abstract:
Electricity is the backbone of any economy and one of the necessities of modern life. Since even before the current war, poor electricity services in Yemen have been one of the key barriers to sustainable economic development and basic service provisions, such as water supply, health care, and education. This policy brief presents an overview of the electricity sector and its relevant indicators prior to the conflict. It then outlines the impact of the conflict on the sector, and concludes with a set of priorities for restoring the pre-war capacity of the electricity sector, then further reforming it to improve its performance. Immediate- to short-term recommendations include: adopting a realistic and practical recovery plan; securing funds for rehabilitating the infrastructure; reviewing the electricity tariff; reducing technical and non-technical electricity losses; purchasing electricity when needed through a competitive process and via least-cost options, such as gas and renewable energy; securing the fuel supply and the salaries of sector staff; resuming all suspended projects; finding sustainable and feasible solutions for the electricity supply in each governorate to avoid the challenges associated with the centralized grid; and installing sustainable stand-alone solar systems, compatible for connection to the national grid (when restored). The medium- to long-term priorities include specific recommendations under five categories, relating to: the legal and regulatory framework; institutional arrangements; capacity and performance; private sector participation; and technical issues. This policy brief was developed based on a more detailed research paper published under the same title by Rethinking Yemen’s Economy project in May 25, 2021.
Topic:
Reform, Economy, Conflict, Electricity, and Energy Sector
Political Geography:
Middle East and Yemen

14. The View from Sana’a – The Yemen Review, Summer Edition, July 2021

Author:
Sana'a Center for Strategic Studies
Publication Date:
08-2021
Content Type:
Commentary and Analysis
Institution:
Sana'a Center For Strategic Studies
Abstract:
The Yemen Review Launched in June 2016, The Yemen Review – formerly known as Yemen at the UN – is a monthly publication produced by the Sana’a Center for Strategic Studies. 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, hold private meetings with local, regional, and international stakeholders, and analyze the domestic and international context surrounding developments in and regarding Yemen. This monthly series is designed to provide readers with a contextualized insight into the country’s most important ongoing issues
Topic:
Diplomacy, Politics, Economy, and Conflict
Political Geography:
Middle East, Yemen, and Saudi Arabia

15. New Fronts in the Economic War – The Yemen Review, August 2021

Author:
Sana'a Center for Strategic Studies
Publication Date:
09-2021
Content Type:
Commentary and Analysis
Institution:
Sana'a Center For Strategic Studies
Abstract:
The Yemen Review Launched in June 2016, The Yemen Review – formerly known as Yemen at the UN – is a monthly publication produced by the Sana’a Center for Strategic Studies. 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, hold private meetings with local, regional, and international stakeholders, and analyze the domestic and international context surrounding developments in and regarding Yemen. This monthly series is designed to provide readers with a contextualized insight into the country’s most important ongoing issues
Topic:
Foreign Aid, Economy, Conflict, and Banks
Political Geography:
Middle East and Yemen

16. Yemeni Border Markets: From Economic Incubator to Military Frontline

Author:
Ahmed Nagi
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
A string of border markets on Yemen’s northwestern border with Saudi Arabia turned the confluence of two countries’ peripheries into a center, gave rise to a distinct economic system, and bridged cross-border communities. The ongoing war in Yemen has either destroyed these markets or forced their closure. An end to the hostilities is unlikely to restore the status quo ante, owing to Saudi Arabia’s desire to establish a buffer zone. This would militarize the borderlands in perpetuity.
Topic:
Markets, Economy, Borders, and Military
Political Geography:
Yemen, Saudi Arabia, and Gulf Nations

17. The Impact of Covid-19 and Conflict on Middle Eastern Economies

Author:
Paul Rivlin
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Moshe Dayan Center for Middle Eastern and African Studies
Abstract:
In our latest issue of Iqtisadi: Middle East Economy, Paul Rivlin assesses the economic damage caused by COVID-19 particularly in countries in the region experiencing the fallout of ongoing conflicts, and discusses several key trends that will continue to plague these hard-hit states. Ten years after the outbreak of the Arab Spring, war, low oil prices and COVID-19 are affecting the economic situation of the Middle East. Conflicts continue in Syria, Libya and Yemen, while Iraq and Lebanon suffer from the breakdown of government authority. The region appears to be less affected by COVID-19 than others, but that may be because data on infections and deaths is incomplete.
Topic:
Economy, Conflict, COVID-19, and Health Crisis
Political Geography:
Iraq, Middle East, Libya, Yemen, Lebanon, and Syria

18. Coalition Falls Back in Hudaydah, Fighting Shifts South – The Yemen Review, November 2021

Author:
Sana'a Center for Strategic Studies
Publication Date:
12-2021
Content Type:
Commentary and Analysis
Institution:
Sana'a Center For Strategic Studies
Abstract:
A surprise decision by the UAE-backed Joint Forces to withdraw from areas south of Hudaydah city and the surrounding governorate shook up the military situation on Yemen’s Red Sea coast.[1] The largest members of the Joint Forces are the Giants Brigade, Tariq Saleh’s National Resistance Forces and the Tihama Resistance. The withdrawal, which began on November 9, saw the Joint Forces move out 15,000 fighters and abandon frontlines in Hudaydah city, home to Yemen’s busiest port, as well as in Al-Durayhimi and Bayt al-Faqih districts, and from the majority of Al-Tuhayta district. The frontlines had been active but largely static since the December 2018 UN-sponsored Stockholm Agreement, which ended a Saudi-led coalition push to take Hudaydah city. The UN and the Yemeni government said they had no advance notice of the withdrawal,[2] and it appeared as though the Joint Forces’ own units were confused about how it would be carried out. The process was disorganized, with units disputing the order of withdrawal with one another. Houthi forces took advantage of this, shelling Joint Forces positions and causing dozens of casualties, according to local military sources. Hundreds of Joint Forces fighters were captured by Houthi forces. The Joint Forces withdrew to the south, establishing a new defensive line from the Al-Himah area, in southwestern Al-Tuhayat district, to Hays district, about 40 kilometers to the east. The official explanation from the Joint Forces was that the withdrawal corrected what it called the “mistake” of remaining in defensive positions while frontlines elsewhere in Yemen needed support.[3] In effect, the terms of the Stockholm Agreement prevented the Joint Forces from making any serious attempt to advance in Hudaydah since 2018. Coalition Falls Back in Hudaydah, Fighting Shifts South – The Yemen Review, November 2021 - Sana'a Center For Strategic Studies https://sanaacenter.org/publications/the-yemen-review/15894
Topic:
Development, Politics, Economy, Houthis, and Armed Conflict
Political Geography:
Yemen and Gulf Nations

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

Author:
Sana'a Center for Strategic Studies
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Sana'a Center For Strategic Studies
Abstract:
Since early 2015, when the onset of war led to the cessation of large-scale oil exports, Yemen has been almost completely dependent on three main external sources to secure foreign currency inflows and stimulate economic activity: foreign humanitarian aid, Saudi financial support to the Yemeni government, and – by far the most significant – remittances from Yemeni expatriates, most working in Saudi Arabia. All three of these foreign currency sources have dramatically declined in 2020. The Saudi response to the COVID-19 global pandemic, in concert with record low oil prices, led to historic economic contractions and spending cuts in the kingdom, in turn undermining the ability of hundreds of thousands of Yemenis to work there and send money home. This occurred alongside a steep decline in international donor funding for the Yemen relief effort and the Central Bank of Yemen in Aden effectively exhausting the US$2 billion Saudi deposit it received in 2018. Roughly half the population in Yemen was already food insecure before the onset of the current armed conflict. The general economic collapse the war precipitated led to millions more requiring emergency food assistance to survive. The current acute shortage of foreign currency sources has profound implications for the value of Yemen’s domestic currency, and the country’s ability to finance fuel and basic commodity imports, and is likely to lead to the rapid intensification of the humanitarian crisis. This paper presents policy recommendations to address this situation for the United Nations and other international stakeholders, Saudi Arabia and other Gulf states, as well as the internationally recognized Yemeni government and the de facto authorities in Sana’a (the armed Houthi movement, Ansar Allah).
Topic:
United Nations, Economy, Conflict, COVID-19, and Health Crisis
Political Geography:
Middle East, Yemen, and Saudi Arabia

20. Hostage on the Red Sea – The Yemen Review Summer Edition, July-August 2020

Author:
Sana'a Center for Strategic Studies
Publication Date:
09-2020
Content Type:
Commentary and Analysis
Institution:
Sana'a Center For Strategic Studies
Abstract:
The Yemen Review Launched in June 2016, The Yemen Review – formerly known as Yemen at the UN – is a monthly publication produced by the Sana’a Center for Strategic Studies. 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, hold private meetings with local, regional, and international stakeholders, and analyze the domestic and international context surrounding developments in and regarding Yemen. This monthly series is designed to provide readers with a contextualized insight into the country’s most important ongoing issues
Topic:
Security, Economy, Conflict, and Military
Political Geography:
Middle East, Yemen, and Red Sea