The new central bank governor made previous promises to Saudi Arabia that the government failed to implement
English - Thursday 23 December 2021 الساعة 04:52 pm
Aden, NewsYemen, special:
The new Governor of the Central Bank of Yemen, Ahmed Ghaleb, made promises to the Kingdom of Saudi Arabia to implement its new / old requirements, to expedite the provision of an emergency deposit to the Central Bank, so that Yemen can get out of its economic and humanitarian crisis.
And the website of the Central Bank published, that the governor of the bank assured officials of the Saudi Ministry of Finance, during a meeting they gathered, yesterday, Wednesday, the bank’s intention to carry out reforms, the most important of which is the adoption of the principles of transparency and governance in all its work and activities.
He stated that the governor proposed to the Saudi side a set of reforms that the Yemeni government intends to implement to address imbalances, mobilize resources and raise spending efficiency.
However, the ability of the Yemeni government to fulfill its announced commitments to Saudi Arabia and donors is still questionable, because there is a disappointing experience, even though it announced that it will implement new economic reforms and improve the capabilities of the Central Bank to manage external financial support.
The promises of reforms made by the governor of the Central Bank to the Saudis, the kingdom has demanded and repeated for years, but the government since 2018 has not implemented them, deliberately protecting its corruption-based interests.
Saudi Arabia had provided financial support to the Yemeni economy, in March 2018, worth $2.2 billion, and subsidized electricity fuel by about $180 million, but Riyadh expressed its dissatisfaction with the Yemeni government’s performance with Saudi financial support and its failure to direct the economy.
The government did not implement previous requirements provided by Saudi Arabia, the Bank, the International Monetary Fund, and international actors “committing to transparency, mobilizing resources, budget reform and reducing waste, corruption and politicized interventions”; To provide rapid and widespread support to the Central Bank.
The sources confirm that in mid-2019, Prime Minister Maeen Abdul-Malik rejected the recommendations of the report of the Central Authority for Control and Accountability, asking him to refer the leadership of the Central Bank to the Public Funds Prosecution, for its involvement in corruption in the Saudi deposit was proven.
In 2019, the Saudi side demanded that the Yemeni government, in return for providing a grant for a period of six months to support electricity fuel, collect electricity revenues, and opened a special account for it. The Saudi side was surprised that the government did not implement what was agreed upon.
At the end of December 2020, Saudi Arabia called on the government of Maeen Abdul-Malik to prove itself in mobilizing resources, restoring the capabilities of economic and revenue institutions, fighting corruption, working with transparency, and paying salaries, so that international funding would be discussed to support the Yemeni economy.
The reasons for the government’s inaction in improving the capabilities of economic institutions and revenue interests, the loss of confidence in the ability of the central bank, the absence of transparency in the disbursement of funds, accountability, and the lack of progress in the Riyadh Agreement, led to the loss of confidence of Saudi Arabia and donors in the Yemeni government.
Saudi Arabia has reportedly pledged to provide another $2 billion tranche as part of the Riyadh agreement to renew existing shares, which are about to run out.
Without the Yemeni government implementing its commitments, making progress on economic reforms and fighting corruption, and implementing the Riyadh Agreement, the desire of Saudi Arabia and any other donor not to provide funding to Yemen will continue, increasing Yemen's economic vulnerability, and the riyal will likely collapse rapidly.
