It is a matter of fact that the economic aspect holds great significance in the ongoing crisis in Yemen. It is deeply interconnected with various other factors and has been a prominent catalyst for conflicts throughout the modern history of Yemen. The struggle for power and wealth has fueled tensions and led to the perpetuation of the crisis. Understanding and addressing the economic dimension is essential in order to achieve a sustainable resolution and pave the way for stability and prosperity in Yemen. Recognizing the significance of the economic dimension, not only in the current crisis but also in the long-standing series of Yemeni crises, is essential. By adopting a current approach to the country's economic situation, we can analyze all its elements systematically and objectively. This will enable us to develop informed and effective visions for Yemen's future.
Absolutely, a comprehensive approach to the state of the Yemeni economy requires a thorough examination of various historical milestones in Yemen, from a political economy perspective and other related elements. Therefore, this research paper will review a range of transformations and interactions related to the political economy in Yemen since the establishment of the Republic of Yemen. over the course of more than three decades of the unified state's existence, there is a wealth of accumulated facts and realities that hold tremendous importance in answering many questions regarding the current economic situation in Yemen. These questions encompass the chronic and escalating challenges, as well as the emerging issues during the years of the ongoing conflict. They explore the ramifications of the Yemeni economic situation, its effects, trends, and components. The answers to these questions are crucial in understanding and addressing the current economic state of the country and its various complexities.
Besides, these answers provide key insights and directions for shaping the future of the Yemeni economy. Moreover, they offer guidance for shaping the future of the entire country, contributing effectively to efforts aimed at extricating Yemen from the pitfalls of underdevelopment, economic recovery, reconstruction programs, and damage mitigation.
It is worth noting that approaching the economic situation in Yemen requires considering the impact of political, military, and security transformations on it, and vice versa. Political conflicts have always had a profound influence on the Yemeni economy, shaping its structure, content, and components. This includes the effects of the nature, condition, and identity of the political system, with all the changes and challenges it has undergone in its various stages of formation. This also encompasses the various factors related to the military and security institutions, which have had multiple impacts on the economy, its inputs, processes, outputs, and outcomes. The same applies to the effects of social structural changes and the positioning of power centers and influences on the Yemeni economy. These factors include tribal, regional, sectarian, cultural, political, and geographical aspects, in addition to a wide range of other geopolitical factors. It is essential to consider these dynamics and their interplay with the economic situation in order to develop a comprehensive understanding of Yemen's economic challenges and potential solutions.
It is necessary to highlight the fact that Yemen lacks effective professional structures and mechanisms for collecting, processing, and presenting accurate data, information, statistics, and indicators regarding the Yemeni economy and other related aspects. This deficiency hinders the ability to measure, analyze, and evaluate the performance of various economic sectors and all that is related to them. Thus, the presence of such structures and mechanisms is of utmost importance for any country and society, as well as for any authority and system. Their significance extends beyond research, studies, and reports. Having robust structures and mechanisms for data management is vital for any nation which goes beyond the realm of research, studies, and reports. These structures and mechanisms play a crucial role in assisting economic, political, and security decision-makers in making well-informed and thoughtful decisions. They also contribute to the development of effective plans and policies that can address the economic challenges and promote sustainable development in Yemen. Addressing this deficiency and investing in building such structures and mechanisms is essential for the future of the Yemeni economy.
The lack of effective professional structures and mechanisms for data collection and analysis in Yemen has resulted in a scarcity of specialized studies and reports that are crucial for developing a comprehensive understanding of the Yemeni economy and related areas. As a result, there is often a reliance on subjective impressions, observations, and guesswork when it comes to available reports, studies, research, plans, and policies. This overreliance on subjective information undermines the trust in the data, content, and findings of these reports. It also compromises the credibility of the recommendations derived from them. Consequently, it becomes challenging to fully utilize these resources when it comes to shaping policies, making informed decisions, and developing comprehensive plans.
Addressing this challenge and investing in the development of professional structures and mechanisms for data collection and analysis is crucial. It will enable the generation of accurate and reliable studies and reports, fostering a greater level of trust and confidence. This, in turn, will enhance the utilization of these resources in informing policies, decision-making processes, and the development of comprehensive plans for the betterment of Yemen's economy and society.
The pre-conflict Yemeni economy
Since the declaration of the Yemeni Republic on May 22, 1990, Yemen has witnessed a worsening of severe economic, social, and political crises. The newly formed Yemeni state inherited a heavy burden of economic challenges from previous cycles of political conflict before the unity declaration. Additionally, there were significant challenges related to the integration of different structures and systems, one adopting a socialist identity and the other closer to a capitalist system. The unification process occurred without well-planned measures and precautions, including pre-merger precautionary measures, protective measures accompanying the integration process, or subsequent remedies to address these challenges. This complex economic situation has had a detrimental impact on Yemen's economic development and has added to the difficulties faced by the government in achieving economic and social stability. Yemen requires concerted efforts and well-thought-out measures to address these challenges and make improvements in its economic infrastructure, promote investment, create job opportunities, enhance financial inclusion, and develop various economic sectors. It is crucial to focus on developing sustainable strategies for economic growth and enhancing Yemen's competitiveness in the global economic arena.
As a result of years of mismanagement and improvisation, the economic situation in Yemen worsened during the period from 1990 to 1994. This followed the failure of national reform efforts that followed the Round Table Conference of Donor Countries to Yemen, held in the summer of 1992. The situation deteriorated significantly, especially with the return of over 800,000 Yemeni expatriate workers from Gulf countries following the Gulf crisis.
In addition to the impact of various international and regional developments, as well as the repercussions of the global financial crisis, the economic situation in Yemen was affected by a series of critical local events. This includes the political crisis that led to the outbreak of the summer 1994 war, with all its alliances, consequences, implications, military, security, political, social, economic, and humanitarian effects. This war disrupted the balance in the political system that had emerged after the unification.
Furthermore, the economic situation was further impacted by a succession of political crises, which hindered Yemen's ability to repay its external debts and meet the requirements for improving its credit rating with foreign donor and creditor countries. These challenges contributed to the worsening economic conditions in Yemen during that period.
The successive governments in President Saleh's regime failed to fulfill their commitment to implement necessary reforms. Instead, they continued to remove government subsidies on essential goods and petroleum derivatives, leading to increased financial burdens on the citizens. This decision had a significant impact on the cost of living, making it even more difficult for people to afford basic necessities. Furthermore, the prevalent corruption and illicit enrichment within the government exacerbated the economic challenges faced by the Yemeni people.
Economic reform program in Yemen
Under the escalating growth of economic globalization, which aimed to seize the legacy of the socialist system that collapsed with the Soviet Union in 1990, and the adoption of extensive economic reform and correction programs by most countries worldwide, dominated by the capitalist system and its economic ideology and principles, the government of the Republic of Yemen initiated an "Economic Reform Program" titled "Economic Stabilization and Structural Adjustment." The program began after extensive negotiations with both the International Monetary Fund and the World Bank, regarding the components of the economic and financial reform program, which Yemen started implementing in two main stages. The first stage began in March 1995 and extended until October 2000. The second stage started in 2001 and continued until 2005, as part of the second five-year plan for economic and social development and the poverty alleviation strategy (2003-2005). It encompassed several steps, including the gradual removal of subsidies on petroleum derivatives, essential goods, and services, privatization processes for various sectors and institutions, and Yemen's approval of the "GATT" agreement (General Agreement on Tariffs and Trade). These steps were supposed to be carried out in parallel with administrative reform measures, addressing issues such as job duplication, institutional inflationary problems in all government institutions, reforming structural, organizational, legislative, procedural, and operational distortions, revenue reform, curbing the chaos and mismanagement of spending, and activating mechanisms to combat financial and administrative corruption, while adhering to the principles of governance and good administration.
However, the successive governments under Saleh's regime evaded their commitment to these measures, continuing to remove government subsidies on essential goods and petroleum derivatives, which further burdened the citizens. This was especially challenging considering the rampant corruption and illicit enrichment that prevailed during that time.
The limited resources, poor management, and rampant corruption
Given the limited resources and poor management, as well as the widespread corruption, Yemen has faced significant challenges. The country's resources are predominantly dependent on oil and gas revenues, which form the backbone of its economy. Additionally, remittances from Yemeni expatriates have played a significant role, but they are subject to various fluctuating factors. Yemen also relies on external aid and loans, as its other resources are weak. Moreover, the economic impacts of the blows to the tourism sector, resulting from a series of jihadist operations, have further exacerbated the situation. The widespread corruption in Yemen has also hindered progress and hindered the fair distribution of resources. It has created a system where those in power exploit their positions for personal gain, leaving the majority of the population deprived of basic necessities and opportunities for growth. This has resulted in a significant wealth gap and social inequality, exacerbating the country's economic and social challenges. The "Economic Reform Program" has been plagued with numerous shortcomings throughout its various stages, preventing it from achieving even the minimum of its goals. The most significant of these shortcomings include the weak social protection networks and measures, the lack or inadequacy of mechanisms and measures to alleviate poverty and protect vulnerable groups from the effects of the economic reform program, the successive governments under Saleh's regime failing to implement all the steps of the economic reform program in a timely manner, the lack of simultaneous real financial and administrative reform measures, the slow progress in reforming the civil service sector, as well as the military and security sectors. Additionally, there has been obstruction in the implementation of the biometric system in various government facilities and institutions, and a failure to create and manage developmental pathways that ensure the enhancement and diversification of the state's investments and resources, as well as creating employment opportunities for university graduates, particularly the youth.
It seems that the challenges facing the country are quite extensive. Corruption, particularly in vital sectors like oil and gas, is prevalent and has significant implications for the management of public finances. The lack of commitment to building a strong private sector and creating a favorable investment environment is hindering economic development. Additionally, there are issues related to security, the independence of the judiciary, and the rule of law, which all contribute to the overall governance challenges. The centralization of power and lack of transparency in financial and administrative processes further exacerbate the situation. Outdated practices and a lack of efforts to update and enhance efficiency in various sectors pose additional hurdles. The regime's focus on consolidating power and creating parasitic capital, rather than promoting equal opportunities and merit-based competition, is concerning. Inheritance-based familial control over key aspects of power and the economy is also problematic. The strategic use of terrorism and security concerns to evade necessary reforms is disheartening. Indeed, the regime's inefficiency and susceptibility to shocks underscore the urgent need for enhanced governance and administration throughout all levels of the government. It is imperative to address the issue of overlapping authorities and responsibilities between the presidency, government, and other executive structures. Such ambiguities only serve to hinder effective decision-making and implementation. The prevailing institutional weakness negatively impacts the performance of various authorities, institutions, and agencies, hampering the country's development and stability. By addressing these shortcomings and strengthening governance, we can pave the way for a more efficient and resilient system that better serves the interests of the people.
Furthermore, due to the mismanagement and rampant corruption of successive governments under the Saleh regime, Yemen has faced numerous challenges. These include the diversion of defense and security allocations at the expense of education, development, health, and infrastructure. The continuous smuggling of subsidized petroleum products to be sold at international prices further burdens the national budget. Government spending is characterized by randomness, extravagance, and wastefulness, exacerbating the financial situation. Yemen officially joined the war on terror in 2000, with all its military, security, political, social, economic, and humanitarian implications and consequences. The outbreak of the six rounds of wars in Saada between 2004 and 2010, with their alliances and various military, security, political, social, economic, and humanitarian repercussions, added to the challenges. The successive governments under the Saleh regime accumulated an escalating budget deficit, high inflation rates, low growth rates, a decline in GDP, a decrease in national income, a devaluation of the national currency against foreign currencies, a decline in per capita income, an increase in unemployment rates, a widening circle of poverty, deterioration of infrastructure, limited basic services, nepotism and favoritism in the public sector, escalating political crises, and instability. Simultaneously, these governments resorted to domestic loans, treasury bonds, while mismanaging external and internal aid and loans. The power structure lacks scientific and systematic studies to diagnose the imbalances and problems related to the state of the national economy. It also lacks effective scientific and systematic visions, plans, programs, and strategies for economic reform and development. Instead of adopting improvisation and randomness, the Yemeni governments under the Saleh regime have hindered the potential and capabilities of society. They have limited the space for private sector contributions in the paths of economic and developmental progress. This approach has ultimately rendered successive Yemeni governments and the ruling regime paralyzed, incapable of absorbing billions of dollars in commitments from donor conferences. Despite Yemen's dire need for those commitments and resources, the government has lost the ability to effectively utilize them. Furthermore, the international community's trust in the existing regime and its successive governments continues to erode, along with its internal legitimacy and credibility.
Since the establishment of the Republic of Yemen in 1990, and until 2011, over the course of two decades, successive governments under the former President Ali Abdullah Saleh's regime have squandered numerous opportunities to lead Yemen towards stability, development, modernization, and reform. Instead, they have pushed Yemen into a long series of crises, exacerbating the economic situation, deepening distortions and imbalances in the structures, institutions, and indicators of the state. Ultimately, Yemen has become a leading example of a fragile state, failing to achieve any of the Sustainable Development Goals or ensure a minimum standard of living for all Yemenis. The government has been unable to guarantee the minimum social, economic, civil, political, and cultural rights for its people. As a result, Yemen became highly susceptible to collapse in the face of the transformative winds that swept through the Arab region with the outbreak of the Arab Spring revolutions in early 2011. This vulnerability was further exploited by the Arab authoritarian system's efforts, supported by their vast resources and the backing of dominant powers in the international system. These efforts, along with other factors, have gradually undermined several countries in the Arab Spring, including Yemen.
Disregarding the warnings and recommendations of specialized international bodies.
Despite the numerous reports from specialized international bodies highlighting the deteriorating conditions and warning of the serious consequences and implications at that time, the successive governments under the Saleh regime chose to continue their flawed and catastrophic policies without paying heed to these repeated signals and warnings. This widened and deepened the cracks and impairments, affecting a wider range of structures, institutions, sectors, and social groups. The Yemeni economy remained in a constant state of fragility, pushing Yemen to new levels of vulnerability and bringing the country, its state, government, and society to the brink of collapse. By disregarding the warnings, the Yemeni government has hindered progress and hindered the country's ability to overcome its challenges. Ignoring the warnings of specialized international bodies reflects a lack of foresight and a failure to prioritize the well-being and development of the Yemeni government as it is crucial for the government to recognize the importance of heeding these warnings and actively engaging with international organizations to implement effective solutions.
An economy mired in a decade of war and subversion
Despite the significant opportunities presented by the 2011 uprising against the Saleh regime, which could have been seized by the political elite to implement urgent and necessary reforms, many local, regional, and international factors converged to exacerbate the shortcomings and incompetence of the political elite. This ultimately pushed Yemen towards the precipice of chaos and disintegration. Various factors, including domestic, regional, and international dynamics, interacted with the political elite's ineptitude to undermine Yemen's stability. Starting from 2014, Yemen became embroiled in a destructive conflict where local, regional, and international interests intertwined. The economy became a major battleground and suffered immensely as a result. The consequences of this conflict have been devastating for Yemen, undoing decades of progress. The economy has been shattered, leaving the country in a dire state of economic collapse. The effects of this prolonged conflict have been felt by all sectors of society, with widespread poverty, unemployment, and a severe lack of basic services.
The warring parties in Yemen have systematically and consistently undermined the structures, institutions, connections, and pathways of the Yemeni economy. They have employed various tactics to achieve this, targeting both vertical and horizontal levels of the economy. In addition to direct military attacks and destruction, the warring parties have resorted to tactics such as the closure of ports and airports, cutting off vital transportation routes, and imposing blockades. These actions have severely disrupted trade, hindered the movement of goods and services, and impeded the flow of essential supplies into the country.
Map of the conflict and the addresses of its divisions
The war in Yemen, with all its developments and consequences, has led to the division of the country into five distinct regions in terms of military, security, and political control. This division, however, does not necessarily reflect the actual balance of power among Yemeni factions, as it has been imposed through various regional interventions.
Currently, Yemen is divided into two main economic zones. The first zone is centered around the city of Aden, where the internationally recognized government holds control. However, this zone faces challenges from competing factions vying for power. It is estimated that the population in this zone is around 10 million. The second zone is centered around the capital city of Sana'a and is under the control of the Houthi group, in alliance with the General People's Congress party. This zone encompasses the northwest regions of Yemen, which are the most densely populated areas in the country whereas the population in this zone is around 20 million. It's worth noting that despite this political and economic division, the Yemeni economy remained relatively unified until 2020. However, the consequences of the war and political tensions are evident throughout the country, significantly impacting the daily lives of the population and the overall economy.
Since 2020, the warring parties in Yemen have systematically and consistently undermined the structures, connections, and pathways of the Yemeni economy at both vertical and horizontal levels. In addition to direct attacks, they have resorted to tactics such as closing ports and airports, cutting off road arteries, imposing strict restrictions on imports, exports, and the movement of individuals. They have engaged in a destructive economic conflict, with notable events including the relocation of the Central Bank to Aden after depleting Yemen's foreign currency reserves. This relocation resulted in the cessation of salary payments to hundreds of thousands of public sector employees, perpetuating a state of modern-day servitude.
In addition to printing new currency and the devaluation of the Yemeni rial against foreign currencies, there have been impromptu decisions to float the currency, deepening divisions within national institutions, structures, and frameworks. This has created a system where a class of currency and property speculators, within the war economy, has emerged. There has been an increase in harassment targeting the private sector, along with the reduction of incentives that support its long-term growth and stability. This has created a hostile environment for capital and investments, while favoring and empowering loyal capital.
Furthermore, the export of oil has continued without a transparent mechanism for monitoring and auditing exploration, exports, and the collection and management of revenues from these exports during the war years. However, oil and gas exports were halted after Houthi attacks on ports outside their control. Other factors contributing to the economic challenges include dual customs systems, the seizure of the Chamber of Commerce in Sana'a, and the puzzling manipulation of foreign currency in an environment lacking transparency and standardization.
The burdensome and unjust taxation policies have affected a wide segment of the population, extending back to the pre-war years. The decision to ban interest in banks, the absence of annual government budgets approved by the Parliament, and the haphazard and ill-conceived privatization of sectors such as electricity have further exacerbated the situation. The state and its institutions have evaded their duties and responsibilities towards the people, while imposing restrictions on humanitarian work amidst a reduction in the coverage of the humanitarian response plan.
Additionally, there has been the destruction and failure of productive and revenue-generating institutions, the numerous impacts of climate change, and the consequences of the reclassification of the Houthi group as a terrorist organization by the US administration due to their attacks in the Red Sea following the Israeli war on Gaza.
The most prominent stages of the conflict with economic trends
The conflict in Yemen has indeed had a significant impact on the country's economy. It began with the Houthi group seizing control of the capital, Sana'a, and other provinces in September 2014. Their initial pretext was opposition to price increases imposed by the "unity government" on oil derivatives, as part of a gradual reduction of subsidies. Following this, the Saudi and Emirati-led coalition launched military operations to gain control over ports, islands, and maritime passages, starting from Aden and extending to the Bab al-Mandab Strait and the port of Mocha. Additionally, there were military operations aimed at controlling Shabwa, as well as the offensive on Hodeidah and the western coast.
On the other hand, the Houthis conducted costly military operations to gain control over oil and gas areas in Marib. They also imposed successive and unlawful taxes, while making a series of economic decisions. These decisions included the relocation of the central bank to Aden, the halting of salary payments, the printing of large quantities of currency without adequate backing, the prohibition of its circulation in Houthi-controlled areas, currency devaluation, and the implementation of unilateral measures related to banks and the banking sector.
All of these factors have led to a severe economic crisis in Yemen, with detrimental effects on the livelihoods of the Yemeni people and the overall stability of the country.
It is true that the war operations in Yemen have resulted in significant destruction of infrastructure and civilian property, including economic and industrial facilities. This has had a detrimental impact on the country's economy, leading to a contraction of economic activity since 2015. The "economic conflict" has caused a sharp increase in the prices of essential goods such as food, fuel, medicine, and transportation, as well as other basic necessities. These price hikes have occurred in parallel with the global rise in food, energy, and commodity prices, further burdening the Yemeni population.
The situation has been exacerbated by the COVID-19 pandemic, which has had far-reaching impacts on the global economy. Yemen, already facing economic challenges, has been hit hard by the pandemic. The disruption of supply chains, reduced trade, and investment have all contributed to the worsening economic crisis in the country.
In addition to the impacts of the shocks accompanying the COVID-19 pandemic and the growing gap between the financial requirements for humanitarian needs and the level of commitments from donors, which have reached their lowest level of around 750,000 euros in May 2024, the humanitarian response programs that used to cover the basic needs of millions of vulnerable populations have been scaled back. As a result, the economic situation in Yemen has become highly uncertain.
The ongoing conflict and economic uncertainty have also hindered the provision of humanitarian aid, making it difficult for international organizations and humanitarian agencies to reach those in need effectively. The complex nature of the situation requires a comprehensive and coordinated effort from the international community to address the economic, humanitarian, and security challenges faced by the Yemeni people.
Therefore, it is crucial to find a peaceful resolution to the conflict, prioritize the well-being of the Yemeni people, and work towards rebuilding the country's economy and infrastructure. Only through sustained efforts and international support can Yemen overcome these challenges and pave the way for a more stable and prosperous future.
Ensuring the national security of Yemen and Saudi Arabia requires working towards lifting Yemen out of its current state and restoring it to a path of development and stability. A project similar to the Marshall Plan, which aimed to uplift Europe from the devastating aftermath of World War II, could be instrumental in achieving this goal.
Regional and international factors affecting the economy of Yemen
In addition to the local factors that impact the Yemeni economy, there are several regional and international factors that also play a significant role. Some of the key factors include:
Yemen and its opportunities in the Saudi Vision 2030
In light of the developmental and modernization leaps taking place in Saudi Arabia, Crown Prince Mohammed bin Salman, the Saudi Arabian Crown Prince and de facto ruler of the Kingdom, has expressed his commitment to taking on the responsibility of uplifting the countries of the Middle East, drawing inspiration from the European Renaissance. The seriousness and realism of these statements are reinforced by the cumulative steps taken in Saudi Arabia so far, which reveal the outlines of a developmental vision led by Saudi Arabia to elevate the region as a shared national security area. This vision aligns and integrates with the economic perspectives and dimensions of the Belt and Road Initiative from a Chinese perspective. The Saudi Arabian leadership has demonstrated a genuine dedication to implementing comprehensive reforms and diversifying the economy through initiatives like Saudi Vision 2030. These initiatives aim to reduce the country's dependence on oil, promote economic growth, and create opportunities for both Saudi Arabia and the wider region. Therefore, its commitment to regional development is a significant step towards fostering stability, prosperity, and cooperation in the Middle East.
The Saudi approach to the Yemeni file has witnessed radical transformations since 2022, revealing a serious Saudi inclination to halt the war. These orientations have had significant implications for the overall situation in Yemen and their effects will be multiplied on the security of both Saudi Arabia and Yemen if they are a prelude to addressing all the structural, political, military, security, economic, and social distortions created by the war. The persistence of these distortions without radical solutions poses a serious threat to both Saudi national security and Yemeni national security, from a security and military perspective, as well as from an economic, political, and social perspective. These distortions are being perpetuated and deepened by two main parties, namely Iran and the United Arab Emirates have complex dynamics in their involvement in the Yemeni conflict. While there may be instances of collaboration and cooperation between the two countries, their interests also diverge, leading to conflicting positions. This convergence and divergence of interests play out in relation to any Saudi developmental and progressive situation, as well as any Yemeni developmental and progressive situation. These are dangerous vulnerabilities that will remain exploitable in the future by any regional or international actor who finds it advantageous to target and undermine the Kingdom, based on any change in their own interests.
Therefore, one of the most important conditions for the success of Saudi Vision 2030, and the success of the Saudi leadership's vision for uplifting the Middle East, as well as the requirements for Saudi Arabia's own development, is the imperative of a bridging initiative. This initiative should work effectively to address the numerous serious distortions, starting with the situation in Yemen, which lies at the heart of Saudi national security. Accomplishing the necessary solutions for these distortions becomes essential to secure any Saudi developmental project from the pitfalls of attrition and undermining. This serves as a foundation for dealing with the immense global and regional transformations that are expected to unfold on multiple levels.
The will for change that is driving the footsteps of the Kingdom of Saudi Arabia today necessitates prioritizing the addressing of major challenges in Yemen. This includes initiating efforts to address the human rights, humanitarian, and economic legacy of the war, along with tackling the direct threat to its southern borders. This entails working towards severing the ties between the Houthi group and Iran, and integrating them into a Yemeni national framework that shares numerous common interests with the Kingdom. Simultaneously, it requires addressing all distortions in the southern and eastern regions of Yemen, leading to the disengagement of the Transitional Council from the United Arab Emirates and integrating them into a Yemeni national system that shares countless common interests with the Kingdom. It also involves addressing the situation of other Yemeni components based on the same criteria.
Indeed, ensuring the national security of both Yemen and Saudi Arabia requires a comprehensive approach that addresses the underlying issues and focuses on the development and stability of Yemen. Drawing inspiration from successful initiatives like the Marshall Plan, which played a crucial role in rebuilding Europe after World War II, similar models can be applied to Yemen. By understanding the significance of Yemen to Saudi Arabia and vice versa, taking into account their shared interests and national security perspectives, a new vision can be formulated. In this context, Yemen can become an integral part of Saudi Vision 2030, contributing to its long-term developmental and strategic goals not only within Saudi Arabia, but also on a broader regional scale.
Economic vectors of the UAE’s aggressive roles in Yemen
The foreign policy of the United Arab Emirates (UAE) has had a significant impact on the Yemeni economy and other sectors as well. The UAE's active aggressive roles towards Yemen and its interests have deep roots that can be traced back to the 1960s. By examining and reviewing these actions, we can accurately define and clarify their directions and objectives. Starting with the establishment of the Yemen Arab Republic following the September 26th Revolution in 1962, which overthrew the Imamate system in the northern part of Yemen. Then, the declaration of the People's Democratic Republic of Yemen, with support from the Soviet Union, after the October 14th Revolution in 1967 against the British occupation of the southern part of Yemen. The withdrawal of the last British soldier on November 30th, 1967, marked a significant milestone. These events are closely related to the circumstances and precursors of the establishment of the UAE on December 2nd, 1971. The UAE continues to exist as an entity and function, supported by one of the poles of the Western capitalist system. It emerged from the Indian Company-British occupation concept, which shaped the region amidst the wave of liberation revolutions and national independence from British colonialism in the 1960s. Thus, the UAE's foreign policy towards Yemen has been influenced by historical factors and geopolitical interests that have shaped its actions and interventions in the region. the establishment of the UAE as an artificial and functional entity was met with the creation of an economic and developmental framework. One of its key pillars of existence is based on a broad foundation of economic and developmental benefits, thanks to its exceptional ports and non-natural markets, despite its extremely remote location. It has managed to secure a designated share within the global economy cycle, in addition to harnessing its natural resources to align with the interests and directions of dominant Western systems. The UAE acts as an adopter, protector, guarantor, director, and driving force for these systems. Consequently, the UAE's strategic positioning as a hub for trade and investment has allowed it to capitalize on its unique geographical location and natural resources, making it a significant player in the global economy. By hosting various systems and allies, and assuming the role of a protector and guarantor of regional stability, the UAE plays a vital role in directing and stimulating developmental and economic activities in the region. This reinforces its status as an influential regional and international power, with the potential to contribute to the stability and development of Yemen and the broader region.
In fact, the aggressive foreign policy directions of the UAE towards Yemen become more evident when we consider its stance during the declaration of Yemeni unity and its involvement in the Summer War of 1994. Additionally, the UAE embraced leaders from the non-victorious side of that war and prolonged its support for separatist tendencies. Furthermore, the UAE obtained the management and operation rights of the Port of Aden through an agreement granted to the Dubai Ports World in 2008. These actions align with the deliberate and planned efforts of the UAE to undermine the original Yemeni ports, which hold significant economic value in the global economic cycle. The strategic coastal locations of these ports, including the Bab-el-Mandeb Strait, the Gulf of Aden, and numerous islands, along with the long coastal strip along the Red Sea, Arabian Sea, and Indian Ocean, make them highly lucrative for international trade. However, the Yemeni government eventually announced the cancellation of the agreement on August 25th, 2012, accusing the Dubai Ports World of deliberate disruptions that hindered the operations of the port in favor of other ports managed by the Emirati company.
The UAE has played an active and unprecedented aggressive role in creating, deepening, and imposing distortions in the Yemeni situation since the announcement of the Saudi-led coalition operations in Yemen on March 26, 2015. Throughout the years of war, the UAE, initially a strategic ally of Saudi Arabia, appeared to be supporting the internationally recognized government. However, gradually, contrasting positions emerged, leading to a state of competition and eventually to a risky venture of entering into a conflict with the Kingdom.
Moreover, the UAE's actions have created hotspots along the Saudi national security lines and have posed a challenge to the Saudi Vision 2030. This has led to a significant divergence between the two countries and has further complicated the Yemeni conflict, exacerbating the already dire humanitarian situation in the country. The UAE's aggressive role has had far-reaching consequences, not only for Yemen but also for the stability and security of the entire region. The UAE has indeed been actively pursuing economic, political, demographic, security, and military objectives in Yemen, particularly in acquiring vital and strategic Yemeni territories. Their focus has been on ports, islands, and areas in Yemen that have access to international waterways. They see these areas as potentially impacting the effectiveness of the Jebel Ali Port and the ports in Dubai if operated and managed efficiently. Consequently, the UAE has sought to acquire these strategic areas by establishing military bases or enabling armed groups loyal to them, crushing any forces that do not pledge absolute allegiance to their policies, which may contradict Saudi Arabia's interests in Yemen.
Furthermore, the UAE has exerted absolute control over the ports of Mukalla, Shabwa, Aden, and Mokha, as well as the islands of Socotra, Hanish al-Kubra, Hanish al-Sughra, Bab-el-Mandeb, and Socotra Island in the Indian Ocean. They have also kept a watchful eye on Al-Mahra, the Arabian Sea, the Gulf of Oman, and areas in eastern Yemen. These acquisitions serve the UAE's economic, political, and security interests in the region.
In a broader regional context, the UAE's active aggressive role extends beyond Yemen, shaping its vision of interests, true objectives, and roles in other countries in the region. In addition to acquiring vital and strategic Yemeni ports, areas, and islands, the UAE has effectively gained control over several ports in the Horn of Africa. These include Djibouti Port, Bosaso in Puntland, Berbera in Somaliland, Assab and Massawa in Eritrea. Furthermore, through Dubai Ports World, the UAE invests in and manages a wide network of ports and maritime facilities, estimated to be around 78 ports and terminals across approximately 40 countries on six continents, according to their official website.
These acquisitions and investments in ports and maritime infrastructure serve the UAE's regional and global economic interests, allowing them to extend their influence and secure their position as a key player in international trade and logistics. This expansion of their maritime reach not only strengthens their economic power but also enhances their geopolitical influence in the region.
Based on documented evidence, the UAE's active and aggressive roles appear to have no boundaries as they seek to impose a new reality that aligns with their self-centered and illegitimate interests. They forcefully encroach upon the legitimate interests of other societies in the region, including Yemen and Saudi Arabia. In an effort to pose significant threats to Saudi Arabia's security objectives in the Red Sea and manipulate various bargaining chips, the UAE, as reported by international sources, deliberately instigated a violent conflict in Sudan on April 15, 2023, encompassing the capital Khartoum and several other Sudanese cities. This conflict involved the Sudanese army, backed by Saudi Arabia, and the Rapid Support Forces, supported by the UAE. As a result, the fighting extended to the vital trade port of Port Sudan in September 2023, after weeks of escalating tensions surrounding a plan to transfer power to civilians. Unfortunately, these developments have undermined all efforts by Riyadh, in collaboration with the United States, aimed at halting the conflict and mitigating its consequences since its outbreak. The ongoing events have had a detrimental impact on the economy and stability in the region, complicating international efforts to find a peaceful resolution to the conflict. We must await further developments to obtain more accurate information about the current situation.
In a broader regional context, the aggressive foreign roles of the UAE are evident. They have been involved in fueling the war in Libya, attempting to undermine the Sultanate of Oman, and other Arab countries. Their interventions in Egypt's internal affairs, through the Ras Al-Hekma Land Deal, as well as their pricing of animosity towards Qatar, followed by their hasty and disgraceful normalization with Israel, demonstrate their unwavering commitment to fulfilling Israel's security requirements throughout the region. These actions completely contradict the minimum requirements of Arab collective national security. Furthermore, their unilateral aggressive measures in the maritime borders with Saudi Arabia, without considering the consequences on the future of bilateral relations, are just one link in a long chain of titles that encapsulate the true interests of the UAE. Such actions reveal the dangerous underlying directions that are completely at odds with the development and progress of Saudi Arabia and Yemen.
What Iran has provided to many communities in the region through its allies is nothing more than a combination of gunpowder, fire, deadly ideology, sent slogans, and distortions in the structural, social, political, military, security, cultural, sectarian, and factional aspects. This is exactly what it has done in Yemen.
Iran and its subversive activities and fingerprints in Yemen
The aggressive Iranian roles in Yemen and other non-Arab countries do indeed have a significant impact on their economic and geopolitical situation. Understanding the nature, directions, and goals of Iran's roles beyond its borders, as well as its perspective on national security, requires examining the milestones, facts, and consequences of its expansionist activities. These activities have targeted Yemen and other non-Arab countries under the banner of exporting the revolution and within the framework of resistance and its axis since 1979. These ongoing activities can be observed in the consequences and situations in Lebanon, Syria, and Iraq. The majority of what Iran has provided to those communities through its allies is nothing more than a mixture of gunpowder, fire, deadly ideology, sent slogans, and distortions in the structural, social, political, military, security, cultural, sectarian, and factional aspects. This is exactly what it has done in Yemen, from its perspective of national security and its perceived requirements. Iran sees these countries as mere spaces for maneuvering and exerting pressure through harsh means. Unfortunately, these actions have resulted in weakening and impoverishing those communities and countries, fostering division and fragmentation at all levels. Iran's actions in this regard are similar to other colonial powers such as Britain, the United States, and France, as well as its regional tools like Israel and the UAE. Their foreign policies are influenced by their historical colonial legacies, leading to inevitable consequences that aim to weaken and undermine the targeted nations and communities, even if they were considered allies and friends.
Indeed, through its support for the Houthi group (Ansar Allah), Iran has managed to secure a significant portion of the "sick man's" inheritance in Yemen. It has become a party to the division of the Yemeni cake, with Iran's allies dominating the north and the UAE's allies controlling the south. This arrangement is characterized by a complex interplay of interests, reminiscent of Machiavellian politics and within the framework of political realism. By closely examining the military operations throughout the years of the war, it becomes evident that the majority of conflicts have occurred in the areas bordering the division lines. These disputes, whether regional or local, revolve around defining the boundaries of this division and related issues concerning resources and access points. This is the crux of the matter, neither more nor less.
The contradiction revealed by Iran's calculated and cautious approach in dealing with the repercussions of Israel's targeting of its consulate in Damascus is quite intriguing. Despite its nature and rhetoric, the Iranian regime approaches issues related to its national interests and security within its own Iranian sphere in a completely different manner than its tactics, lines, and paths of proxy conflicts in the region. It carefully weighs every step that relates to its internal situation, with great sensitivity and precision, leaning towards absorbing serious targeting operations that cross its declared red lines under the banner of "strategic patience." It repeatedly adheres to the highest levels of self-restraint and exercises due care to protect Iran's interests, ensure its national security, and safeguard the well-being and stability of its society. It avoids the perils of gambling, adventures, emotions, and wars.
However, this stands in stark contrast to how the Iranian regime deals with anything related to proxy conflicts outside its borders, detached from any considerations of risks and consequences concerning the safety, interests, and risks to Arab societies and nations under the control of its allied formations. It treats them as an advanced theater for its maneuvers and escalating proxy wars under the banner of resistance and its axis. These formations are driven to the highest levels of escalation without any regard for the minimum calculations of risks and unlimited costs regarding the security, safety, interests, and stability of those societies and their livelihoods.
These striking contradictions become even more evident when we observe the limited nature of Iranian support for these allied formations and groups, focusing solely on weapons, mobilization, and slogans. Iran completely refrains from providing any form of economic, developmental, relief, or humanitarian support, even in the face of crises affecting these societies and countries. Despite the potential for such support to enhance their economies and create important linkages for mutual benefits and interests between these formations and the people under their control, Iran shows complete scarcity, reluctance, and disengagement.
The Silk Road is intertwined with geopolitical dimensions as it revives international, economic, political, cultural, and social relations. Hence, it is one of the most influential factors shaping the policies and interactions of countries worldwide, including those in the Middle East.
Yemen's promising opportunities with the Silk Road and China
After weeks of announcing the cancellation of the agreement granted to Dubai Ports World to operate the Port of Aden since 2008, the Yemeni government signed a new agreement with China for the development and operation of the port. The new agreement, valued at $507 million and funded by China, includes the expansion and deepening of the container terminal, the construction of an additional berth, and the deepening and widening of the external and internal navigation channels. These development works are carried out by the China Harbor Engineering Company in partnership with the Aden Gulf Ports Corporation.
The agreement was signed during President Hadi's visit to Beijing in mid-November 2013, where he held talks with Chinese President Xi Jinping and signed several economic and investment agreements. This agreement marks one of the cooperation agreements signed during President Hadi's visit to the People's Republic of China.
The significant visit of former Yemeni President Hadi to China and the signing of several agreements between the two sides coincided with the announcement by the Chinese President of the Silk Road Initiative. This timing carries clear implications that can explain the undermining and aggressive roles played by the UAE in Yemen. These roles have focused on Yemeni territories overlooking the Red Sea, the Bab el-Mandeb Strait, and the Indian Ocean, as well as important areas where natural resources are concentrated. These areas have significant geopolitical significance and are closely related to the interests and national security of Yemen and Saudi Arabia, conflicting entirely with the UAE's perspective on its own interests. The UAE's roles during the war in Yemen, its precedents, and its undermining actions in other countries in the region are linked to various economic, regional, and international geopolitical factors. One of these factors is the movement of interests within the framework of the "Silk Road" initiative, which represents China's promising vision of the world with multiple dimensions.
The Silk Road, officially announced by Chinese President Xi Jinping in 2013 and launched in 2015 as the "Vision and Action" project, is indeed a vast network of operations. It encompasses main and subsidiary land routes, extensive bridge networks, high-speed rail tracks and stations, maritime corridors, shipping lines, regional ports, and other infrastructure. This strategic initiative aims to connect the three continents of the world, spanning over 72 countries and encompassing 75% of the global population. It is a transformative project with far-reaching implications for international trade and connectivity.
In addition to what was mentioned, the Silk Road is a comprehensive system that includes industrial cities, free markets, large dams, advanced agricultural techniques, electricity production and transmission lines, oil and gas pipelines, as well as the exchange of goods and services. This project is based on a new international political entity called the BRICS group, which represents a new international alliance. The BRICS group consists of Brazil, Russia, India, China, and South Africa, and aims to enhance economic and trade cooperation among these countries and expand their influence on the global stage. This new international political entity is an integral part of the Silk Road development framework and promotes economic and trade cooperation among the participating nations.
Indeed, the Silk Road holds not only economic significance but also geopolitical dimensions. It effectively weaves international relations, demographics, economics, politics, culture, and society together. Consequently, it becomes one of the most influential factors shaping the policies and interactions of countries worldwide, including those in the Middle East, particularly Saudi Arabia and Yemen, as well as the United Arab Emirates and Iran. Their coordinated roles exist within a framework of intersecting interests and conflicting interests with Yemen, Saudi Arabia, China, and its transnational economic project.
Certainly, it is of utmost importance to work towards creating pathways for deep discussions and negotiations that encompass all parties, forces, components, stakeholders, and actors involved in the conflict. These discussions should have economic dimensions and lead to a framework agreement that ensures the cessation of economic conflict. This serves as the foundation for building a cohesive national strategy for reform processes and pathways.
The Conclusions
While acknowledging the significance of political, military, and security negotiations facilitated by the UN envoy to Yemen, it is of utmost importance to establish avenues for thorough discussions and negotiations that encompass the economic aspects. These dialogues should involve all parties, stakeholders, various actors, and components within the Yemeni context. The ultimate goal is to achieve a comprehensive framework agreement that guarantees the cessation of economic conflicts. Such an agreement will serve as the cornerstone for constructing a cohesive national strategy for comprehensive economic reform processes and pathways. It will provide a precise roadmap outlining the necessary steps for the country's economic development in the short, medium, and long terms.
In order to achieve this, it is necessary to convene a specialized economic dialogue conference that includes the study and diagnosis of the pre-war Yemeni economy and its associated challenges. Additionally, conducting a review process of economic reform priorities is crucial in order to develop a comprehensive and consensus-based national strategy for economic reform. This process should also involve the formulation of various executive plans and policies. In this context, I would like to propose some suggestions that have been derived from research, reports, studies, and experiences:
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