Introduction: A continuous hemorrhage in the Yemeni economy
Recent Yemeni data and consistent economic reports have revealed that the Houthi group's practices have inflicted unprecedented and devastating losses on the national economy. These reports highlight the extent of the destruction wrought on Yemen's economic infrastructure and vital sectors, exacerbating the humanitarian crisis and making it one of the world's worst, according to United Nations classifications. The continuation of these practices threatens the complete collapse of what remains of the Yemeni economy.
Historical background of the economic collapse in Yemen
The roots of the current economic crisis can be traced back to late 2014 when the Houthi group seized control of the capital, Sana'a, and state institutions, including the Central Bank of Yemen. In 2016, the legitimate government was forced to relocate the Central Bank's headquarters to the interim capital, Aden, in an attempt to salvage monetary policy. However, this financial division created two parallel economic systems, leading to a sharp decline in the value of the national currency (the Yemeni rial) and rampant inflation. The Houthis' ban on the circulation of newly printed currency in areas under their control has further exacerbated the economic divide and hampered efforts to unify monetary policy.
The most prominent Houthi practices that destroyed the economy
The Houthi group has employed numerous practices that have brought the Yemeni economy to a near standstill. Among the most prominent of these practices were the armed attacks targeting oil export terminals in the Hadramawt and Shabwa governorates in late 2022. These attacks halted crude oil exports, the primary source of revenue for the legitimate government's budget, depriving the state of billions of dollars that were earmarked for paying employee salaries and providing essential services.
In addition, the group imposed exorbitant taxes and double customs duties on goods and merchandise coming from government-controlled areas. These illegal taxes burdened the private sector and pushed it to the brink of bankruptcy, in addition to confiscating the assets of many businessmen and large companies under flimsy pretexts.
Local repercussions: a humanitarian and economic catastrophe
Domestically, these devastating economic losses have had a direct impact on the lives of citizens. Poverty and unemployment rates have soared to record levels, and millions of Yemenis now rely entirely on international humanitarian aid for survival. Furthermore, the years-long suspension of salaries for hundreds of thousands of public sector employees in Houthi-controlled areas has decimated the purchasing power of ordinary citizens, making access to basic food items and healthcare extremely difficult.
Regional and international impacts of the crisis
The repercussions of Houthi actions have not been confined to Yemen alone, but have extended to the region and the international community. Attacks in the Red Sea and the Bab al-Mandab Strait have disrupted maritime navigation and global trade. This military escalation has increased insurance costs for commercial vessels and shipping, negatively impacting the prices of goods imported into Yemen and the entire region. Furthermore, the continued economic and security deterioration places additional burdens on donor countries and international organizations struggling to bridge the funding gap for the humanitarian response plan in Yemen.
a summary
In conclusion, Yemeni and international data confirm that Yemen’s economic recovery remains contingent upon ending destructive practices and illegal levies, and reaching a comprehensive political settlement. Without a fundamental solution that ends the financial division and resumes oil and gas exports, the Yemeni economy will continue to hemorrhage, and the suffering of the Yemeni people, who are paying the heaviest price for this ongoing war, will only intensify.
