$126 billion in lost opportunity cost in Yemen since 2015

English - الأحد 28 نوفمبر 2021 الساعة 10:01 ص
Aden, NewsYemen, special:

A new international report said that the Yemeni economy has lost $126 billion in lost economic activity since 2015, with the increase in the duration of the war, disruption of markets and institutions and the destruction of social and economic infrastructure.

Yemen is in its seventh year of economic collapse due to the war and the corruption of its parties, and is witnessing a shortage of food and medicine amid a deterioration in public services.

When comparing the current situation in Yemen to a conflict-free scenario, the UNDP's "Assessing the Impact of War in Yemen: Paths to Recovery" said the country has lost $126 billion in potential GDP since 2015.

The report, which is the third to monitor the impact of the war in Yemen, added that the war and its economic repercussions have pushed 15.6 million people into extreme poverty and an additional 8.6 million people suffer from undernourishment.

The war affected actual and potential economic growth, and wiped out the gains made due to losses in physical and human capital, internal displacement, fragmentation of financial institutions, flight of national capital and emigration of talent.

The lost losses were represented in the Yemeni economy, in the gross domestic product, public revenues, the cumulative lost opportunity in the total external reserves, and on state employees and social welfare due to the cessation of salaries for years.

The higher economic losses in Yemen than the average losses of conflicts in the region and the world are due to the association of the armed conflict with the restriction of foreign trade movement and the cessation of production and export of oil and gas, which is the lifeblood of the national economy.

In addition, the Yemeni economy lost a large part of the capital formation of the public and private sectors - the summary of work and economic achievements over the past decades - as basic social services facilities, infrastructure and housing were severely damaged, estimated at a cost of about $30 billion.

The Yemeni economy is going through very critical conditions. The cumulative decline rates in macroeconomic indicators and balances have reached their worst stage, in light of the ongoing war and the state of division in economic institutions.

 The World Bank estimates that the financing requirements for the recovery and reconstruction of the Yemeni economy are estimated at $88 billion, at $17.6 billion annually for a period of 5 years.

Economists stress that the recovery of the economy requires a political settlement, the unification of state institutions, the flow of external support, and the resumption of public budget functions.