On February 11, 2011, a peaceful revolution took place against the regime of Ali Abdullah Saleh, and caused a major division in Yemeni society between supporters and opponents. The conflict continued between the two parties until the Houthis (Ansar Allah), in alliance with former President Ali Abdullah Saleh, were able to overthrow the capital, Sana’a in September 21, 2014. As a result, most of the northern governorates were controlled, while most parts of the Marib and Taiz governorates remained under the control of the Islah Party, and the Southern Resistance with all its components took control of all the southern governorates, and the situation remains like this up to this moment.
Although the Saudi and Emirati intervention in Yemen, aimed - as was declared - at supporting the President Hadi regime, was announced on March 25, 2015, the actual beginning of the war in Yemen dates back to 2014 and continues up to date. In spite of this, the scope of the conflict has recently begun to shrink due to international and Arab efforts aimed at putting an end to the conflict and moving to the path of a political settlement.
It was natural for all these stormy political events to have a catastrophic impact on the economic situation, especially after the fragmentation of one country into several conflicting political entities, dominated by regional and sectarian fanaticism.
One of the critical outcomes that the war in Yemen led to, was the use of the economy as a tool of fighting, and the first action in this context was taken by Abdu Rabbuh Hadi, who issued on September 18, 2016 a decision to transfer the Central Bank from Sana’a to Aden. As a result, and since that time, the salaries of the public employees have been suspended for more than one million and two hundred staffs in the areas ruled by the Houthis up to date.
For its part, the legitimate government firmly refused to pay the salaries of public service workers in areas under the control of the Sana’a government, unless Houthi government agreed to supply the revenues of state institutions in those areas to the Central Bank. However, this condition was absolutely reject by the Sana’a government.
Consequently, the interruption of salaries of public service employees has accelerated the process of economic downfall, because it pushed millions of Yemenis to the brink of famine, and this led to a contraction in the income of Yemenis working in trade and various services so that the bankruptcy swept many of them out of a decent life.
One of the factors that seriously affected economic life in Yemen is the monetary division in the country, which arose following a decision taken by the Sana'a government in 2019, which stipulated absolute banning on the new edition of the Yemeni banknotes, under the pretext of combating inflation.
As such, it is clear that the decision to transfer the Central Bank from Sana'a, whose purpose was to dry up the Houthis' financial resources, led, in fact, to the severing of the bank's economic relationship with the geographical areas under their control and deepened the country's political division.
Moreover, the Sana'a government's decision to ban the new edition of the Yemeni currency, issued by the Central Bank in Aden, led to the same results, as this resulted in a shrinkage of financial transfers and trade exchange between the areas administered by this government and the areas subject to legitimate government.
Unfortunately, the limits of this article do not allow delving into all the economic repercussions resulting from the war, and here I will suffice with mentioning key consequences, the first of which is related to the gross national product:
Whereas, “according to the report of the Yemeni Ministry of Planning and International Cooperation (MOPIC), the gross domestic product in Yemen decreased by 14.4 percent in 2017, which means if it is added to the contraction of 15.3 percent in 2016 and 17.6 percent in 2015, and thus the percentage of loss reached 40.5 in percent in economic activity since the outbreak of the war.
In this regard, it is important to point out the decline in oil production in Yemen. “In the final months of 2014, Yemen was producing 125,000 barrels per day of crude oil from the Masila, Ma’rib, and Shabwa basins, but exports completely halted immediately following the eruption of the conflict in 2015.
In 2017, oil production resumed in Yemen, but exports were intermittent, fluctuating significantly from month to month, from 18,000 barrels per day to 81,000 barrels a day, according to Global Platts statistics.
The second key consequence that we would like to point out here is related to the increasing annual inflation rate in Yemen, as it rose to 45% at the end of 2021 compared to 35% in 2020, recording its highest levels ever in one year. On the other hand, the overall balance of payments witnessed a large deficit with the continue of the bloody conflict in the country for the eighth year in a row.
In connection with this, the prices of goods and services rose, as the “rate of price upsurge during 2021” reached about 111%, compared to 30% in the previous year. This rise in commodity prices came as a result of the deterioration of the value of the Yemeni riyal against foreign currencies in the exchange market, which then reached unprecedented levels, and this was directly reflected in the prices of imported basic food commodities, which represent about 90% of the total food consumed in Yemen.
All of these changes generated catastrophic social consequences, the first of which was the increasing number of displaced people. In this regard, the United Nations High Commissioner for Refugees confirms that as of 2022, “Yemen is still suffering from one of the largest humanitarian crises in the world. After seven years of a brutal and relentless conflict, approximately 23.4 million Yemenis (73% of the country's population) depend on humanitarian aid to survive, including 4.3 million internally displaced people, making the country fourth in the world in terms of the largest number of internally displaced people as a result of the conflict.”
Solving all economic and social problems is practically impossible without reaching a political settlement, based on a clear vision of the form of the Yemeni state, the form and type of the political system, and without external economic support and thoughtful economic and social programs to revive economic life and improve the life of society.
The United Nations High Commissioner for Refugees says that escalating conflict, continuing insecurity, sanctions, and the collapse of the economy have led to “an estimated 80% of the population being pushed below the poverty line.” Besides, the protection environment across the country remains unfavorable, and civilians continue to endure the serious impacts of the conflict.
If we take into account all the economic causes mentioned above, it can be estimated that about 95% of the country's population lives in the poverty line or below the poverty line, and that the rich class and the middle class together constitute approximately only 5% of the total demographic structure.
In addition, the number of unemployed people has increased, and in this regard, a recent study funded by UNICEF confirmed that unemployment rates in Yemen have risen to significant levels, reaching 32% of the total labor force in 2020, exceeding half of what it was in 2014. ", amounting to 13.5 percent."
Further, it is appropriate for us to explore the impact of war on children. According to UNICEF statistics in 2022, “Yemen is still suffering from one of the largest humanitarian crises in the world, with about 11 million children in need of one or more forms of humanitarian assistance.”
In addition to the above, after 8 years of conflict, the national social and economic systems in Yemen are still on the brink of collapse. Families have become vulnerable to the spread of infectious diseases due to conflict, large-scale displacement, and recurring climate shocks. Millions of children lack access to safe water, sanitation and hygiene services. The country continues to suffer from successive outbreaks of cholera, measles, diphtheria and other diseases that are easily preventable with vaccines.”
Regarding the number of deaths as a result of the war, “The United Nations estimated that the number of victims of the conflict in Yemen will reach 377,000 people at the end of 2021 of which more than 6,872 civilians were killed by direct causes.”
I believe that the number of war fatalities in Yemen has reached approximately half a million people in 2023, leaving behind tens of thousands of orphans. In this regard, the Orphan Foundation reports that the bloody events from 2015 to 2017 alone “left more than 79,199 orphans, bringing the total number of orphans in Yemen to exceed one million and 100,000.”
Based on the above, we can imagine the number of Yemeni war widows, which is a major social problem that the Social Welfare Fund or any other charitable institutions in the country cannot solve. What exacerbates this problem is that the overwhelming majority of war widows come from poor and uneducated families.
In the context of talking about the social effects of the war, it is essential to point out the impact of the war on the social fabric, which is the totality of relationships between members of society. In fact, in Yemen today, it is in its worst condition, because the war generated a kind of hatred and mistrust between the residents of the warring areas, and this is practically embodied in the prevalence of discrimination in dealings and employment.
Resolving all the economic and social problems, which we touched upon previously, is not possible without reaching a political settlement, based on a clear vision of the form of the Yemeni state, and the formula and type of the political system, and without external economic support and thoughtful economic and social programs to revive economic life and improve the life of society.
