Alternative mechanisms based on transparency.. A research report proposing solutions to support the economy
English - Tuesday 05 September 2023 الساعة 06:35 pm
Aden, NewsYemen:
A research report issued by the Sana'a Center for Studies proposed new solutions to support the national economy and the local currency and reduce prices, considering the proposals put forward by the Central Bank of Yemen in Aden difficult and unrealistic.
The report stressed the need to direct the financial transfers allocated for relief aid provided to Yemen towards supporting the stability of basic commodities, protecting the market from the effects of the conflict, and contributing to lowering prices. He said: This policy will benefit the economy in general and support the stability of food prices, and will address the challenges arising from the ongoing competition between the Yemeni government and the Houthi group with regard to economic and monetary policies.
The report referred to the reluctance of United Nations agencies and international non-governmental organizations working in the humanitarian response and the provision of aid to Yemen in dealing with the proposals put forward by the Central Bank for fear of politicizing relief interventions. lack of purchasing power.
He said: Adopting this policy can provide stable access to foreign exchange needed to finance imports of basic commodities.
One of the alternative mechanisms proposed by the report is for relief organizations to be more transparent about the amount of money deposited with Yemeni financial institutions and their deposit periods. It explained that this may represent an essential first step to build the necessary confidence and momentum to ensure that Yemeni importers benefit from these deposits - through the adoption of a neutral, transparent and non-politicized reporting mechanism - and reduce capital flight, reduce the cost of obtaining foreign exchange and support the import of basic commodities.
He pointed out that these results will help - in turn - to achieve stability in the market, and protect it from the negative effects resulting from the conflict, in addition to contributing to lowering prices.
The research report said: The establishment of a transparent system based on the allocation of aid funds to support the stability of the economy is a low-cost strategy, but very profitable, and may be effective regardless of the outcome of the conflict and fragile peace talks.
He added that it "will correct any misconceptions about the amount of money flowing from abroad in hard currency to Yemeni financial institutions, which is much less than the total amount spent by aid actors."
The report made several recommendations to international and regional organizations working in the field of relief and Yemeni economic bodies, including determining the amounts that are transferred to Yemeni banks, to establish the necessary foundations for a system that links international financial transfers with the financing needs of importers of basic commodities.
He stressed the need for the Central Bank in Aden to benefit from its supervision of “Swift” networks to help monitor transfers from relief organizations to Yemeni banks, and to adopt the greatest degree of transparency with regard to disclosing the source of hard currency offered for sale in its regularly held auctions.
