Recurring grants and deposits.. The Yemeni government proves its inability to manage the economic war
English - Monday 07 August 2023 الساعة 09:38 am
Aden, NewsYemen, exclusive:
During the months of October and November of the year 2022, the Houthi militia - Iran's arm in Yemen, launched several attacks with drones on oil ports in the governorates of Hadramout and Shabwa, in the east of the country.
Those attacks forced the oil transport ships that were anchored in those ports to leave, which ended in stopping the export of oil abroad and the loss of the government, which is widely recognized, the most important financial resource that was managing the affairs of the liberated provinces.
The terrorist attacks were accompanied by many economic measures that increased the stranglehold on the government, including preventing the delivery of domestic gas coming from Marib to areas under its control and replacing it with gas coming from Iran, in addition to shifting the import and export compass to the ports under its control.
The Houthi measures have rendered the government helpless in the face of many financial obligations, foremost of which is the payment of employee salaries and the fulfillment of many financial pledges, not to mention the deterioration of the local currency, the collapse of the living situation, and the contraction of the economy, which greatly affected the performance of the government, the Presidential Leadership Council, and the lives of citizens to a large extent.
economic losses
The Yemeni government stood helpless in the face of the economic war, especially since the oil battle waged by the Houthi militia continues, and is entering its second year without any serious government moves to restore its control and influence over oil revenues. At the same time, the Houthi militia continues to exploit the non-war in order to obtain more gains, especially after its refusal to extend the UN armistice in October 2022.
It is known that most of the oil and gas fields are located in the governorates under government control in Marib, Hadramout, and Shabwa. The production of the operating fields is close to 60,000 barrels per day, after the country used to produce about 250,000 barrels. The country's revenues amounted to more than $1.4 billion in 2021, compared to more than $710 million in 2020, an increase of 99.4%.
Acting Permanent Representative of Yemen to the United Nations, Marwan Ali Noman, said that the Houthi attacks on oil ports and economic facilities caused the country to lose hundreds of millions of dollars that would have improved public services and paid employees' salaries.
He added, in Yemen's speech before the Security Council session on famine and food insecurity resulting from conflicts, that the continued threat and attacks by the Houthis on vital economic facilities and oil ports have caused, since last August, the Yemeni economy to lose about one and a half billion dollars, which were intended to improve public services. Paying salaries across the country.
He stressed that these losses, which come in light of the depletion of the government's ability to withstand due to the contraction of the national economy by half as a result of the war, developments in global events and climatic challenges, are all factors that have increased food security in the country.
Search for grants
With every crisis and failure in managing the country's affairs, the Yemeni government appeals to the brothers in the Saudi-led Legitimacy Support Coalition to obtain financial grants to get out of the deteriorating economic situation. However, this gap has continued and recurred since the outbreak of the war in 2015.
In January 2018, Saudi Arabia deposited two billion dollars with the Central Bank of Yemen in the capital, Aden, under the cover of supporting the Yemeni people and the Yemeni economy and improving the exchange rate of the local currency, which at that time witnessed a decline due to the financial division policy pursued by the Houthi militia.
In April 2022, Saudi Arabia, in cooperation with the UAE, provided a new financial deposit of $3 billion, in continuation of supporting the Yemeni government and helping it to carry out its duties in order to restore security and stability in Yemen.
In early August, Saudi Arabia also provided new support worth $1.2 billion, to strengthen the state's general budget, help improve the economic situation and stop the collapse of the Yemeni riyal, in light of the continued suspension of oil exports as a result of the Houthi terrorist attacks on oil ports about a year ago.
The Yemeni government, as usual with its receipt of financial grants and deposits from brothers, comes out with statements by its officials to rely on bridging the gap in the Yemeni economy, recovering the deteriorating conditions and improving the currency. Al-Houthi tampered with the economy and obstructed oil revenues, which represent the country's main revenue.
The government is in trouble
Experts confirm that the new Saudi assistance came at a time when the economic and financial situation of the Yemeni government entered a very dangerous stage, explaining that the support will help temporarily to create relative banking stability as long as the main source of funding for the state budget is suspended, which is the oil and gas revenues that the Houthi militias prevented from exporting. .
The journalist concerned with the economy, Majed Al-Daari, confirms that the government’s continued corruption and its failure to collect all state resources is one of the main reasons for the deterioration of the economic situation, explaining that there is absurdity in government expenditures in hard currency, in addition to deliberately keeping the oversight, accounting and inspection agencies separate from what is going on inside Government and revenue institutions.
He added that the recent Saudi assistance will lead to a relative improvement in the economic situation, but the continued disruption of oil and gas exports will lead to a further deterioration in the coming months.
Among the reasons for the economic decline and collapse in the country is the Yemeni government's continued neglect of implementing a number of requirements set by Arab and international financial and monetary funds to obtain the allocated deposits.
According to economic sources, the government is deliberately slowing down the implementation of many financial and economic tasks and reforms, as well as modernizing fiscal and monetary policy in accordance with requirements set by international and Arab banks and funds, including the Arab Monetary Fund, the World Bank and other financial bodies.
The sources added that the conditions and economic reforms deferred by the Yemeni government greatly delayed obtaining the allocated deposits. These requirements are related to transparency, compliance, limiting corruption, combating the financing of terrorism, and serious reforms in the state’s financial and monetary apparatus, which guarantee improving the collection of resources and the quality of their use.
