Mazen Issa, using a pseudonym at his request, endured unimaginable hardships from early 2017 until mid-2019. His suffering slightly eased when he managed to return to work at the government-owned "Ammran Cement" factory.
Mazen, along with numerous other workers, were forced to cease operations after the facility faced multiple airstrikes by the Arab coalition, led by Saudi Arabia and the UAE, during that period. The bombings inflicted extensive damage on the factory, making it challenging to restore production capabilities. Machinery and equipment deteriorated significantly, with no possibility for comprehensive maintenance. Additionally, the lack of raw materials and the difficulties in importing them due to the blockade on Yemeni ports exacerbated the situation.
Moreover, Mazen shared his story with "Khuyut," expressing the impact of the bombings and the ongoing challenges faced by the factory and its workers.
In Yemen, the Arab coalition airstrikes, initiated on March 26, 2015, have strategically targeted numerous manufacturing facilities, resulting in the loss of livelihood for many workers who solely depend on these establishments. This deliberate destruction has also triggered a substantial surge in the prices of essential commodities, such as cement, within the local market.
Yemen currently houses three state-owned cement factories and approximately three privately-owned counterparts. The relentless assault on the industrial sector has had profound repercussions, with the sector bearing the brunt of coalition bombardments that have decimated factories and disrupted operations.
Impact of the Conflict on Yemen's Industrial Sector and Operational Challenges
Since the outbreak of conflict in 2015, Yemen's industrial sector has emerged as one of the hardest-hit areas, bearing the brunt of relentless warfare. The sector has been systematically targeted by coalition airstrikes, leading to the devastating destruction of vital factories and facilities. Official data, a copy was obtained, sourced from the Yemeni private sector underscores the severity of the situation. These statistics, which have come to light, paint a grim picture of the industrial landscape in Yemen. Approximately 12 food and consumer factories have been rendered inoperable, alongside numerous companies, institutions, economic hubs, service providers, and both public and private investment entities across the nation. The ripple effects of this widespread devastation have reverberated throughout the industrial ecosystem, exacerbating operational challenges and compounding the already dire circumstances faced by workers and businesses alike.
In a recent report released by the Committee of the Private Sector in Yemen, it has been revealed that over 80 private facilities, owned by companies and businessmen, have fallen victim to targeted attacks. These facilities, primarily categorized as companies engaging in economic activities, have collectively incurred an estimated damage value of approximately $867 million. This revelation underscores the devastating toll of the ongoing conflict on Yemen's industrial landscape.
Mr. Abu Bakr Ba Obaid, President of the Aden Chamber of Commerce and Industry and Deputy Director of the General Union of Chambers of Commerce and Industry, has emphasized the exorbitant price paid by the private sector amidst the ravages of war. The widespread destruction of factories and companies has not only led to significant financial losses but has also triggered a substantial outflow of capital, reshaping the economic dynamics in the country.
Despite these challenges, Yemen's industrial sector has displayed remarkable resilience in the face of adversity. Efforts for self-recovery and restoration of production capabilities have been spearheaded by affected factories and the industry at large. Technical expert Fouad Ghailan, specializing in industrial production and affiliated with a prominent food factory in the capital city of Sanaa, has acknowledged the commendable endeavors undertaken to revive operations and mitigate the impact of the conflict.
Targeted Factories and their Crises in Yemen's Industrial Sector
Official data released in 2018 by the General Union of Chambers of Commerce and Industry indicates that the targeted factories represent over 45% of Yemen's industrial sector. The damages incurred by these facilities exceed $50 million, with losses in import and export activities estimated at around $150 million.
Additionally, a committee, established by the General Union of Chambers of Commerce and Industry in Sanaa in collaboration with the Chamber of Commerce and Industry, has assessed the damages inflicted upon the industrial sector at approximately $1.373 billion. Direct coalition airstrikes accounted for 55% of the total damages, while indirect airstrikes followed at 35%. Additionally, internal city conflicts contributed to about 10% of the losses.
Other factors exacerbating the private sector's losses were highlighted by Ahmed Hassan, the Director of Communication and Media at the Chamber of Commerce in Sanaa. He pointed out restrictions on individual trade movement, currency exchange rate fluctuations, national currency depreciation, increased import costs, multiple and duplicate taxes, all of which significantly impacted markets and commodity prices, particularly food and consumer goods.
However, the resurgence of vital factories such as the "Al-Sawari" rubber industries and the "Al-Aqil" light food factory in Sanaa stands as a testament to the unyielding resolve and resilience of Yemen's industrial sector in surmounting the adversities brought about by the persistent conflict, notwithstanding the constrained resources and multitude of challenges.
According to the findings of a comprehensive survey conducted by the Private Sector Committee and released at the close of 2018, approximately 80 private establishments owned by companies and entrepreneurs were singled out for attack. Among them, companies primarily engaged in economic activities accounted for a commanding 38%, with their collective damages estimated at a staggering $867 million. Following closely behind were service-oriented establishments, bearing the brunt of damages amounting to $212 million.
A report unveiled in July/June 2020 by the Economic Studies and Forecasts Division within the Ministry of Planning and International Cooperation shed light on the direct and indirect repercussions suffered by the private sector, particularly during the turbulent initial three years of conflict, with losses ranging between $25 to $27 billion. The commercial sector bore the heaviest impact at 18%, while the manufacturing industry felt an 8% ripple effect. The residual sectors of the economy comprised the remainder of the impact.
In this context, the businessman Amar Al-Hasani, owner of an import and export company, sheds light on the transportation sector, which he describes as one of the most severely impacted sectors by the war, if not the most affected. He emphasizes that its vulnerability stands out as a leading factor contributing to significant disruptions in the supply of goods, food items, and consumer goods, with import costs skyrocketing by over 100%. This was exacerbated by the establishment of inspection points and centers for all commercial shipments destined for Yemen, particularly those via maritime transport, in addition to the closure of airports and land border crossings, which significantly affected the import of many essential goods, such as medicines.
Furthermore, Al-Hasani discusses the impact on supply chains due to the prolonged arrival time of commercial vessels at operational Yemeni ports, which now take several months to reach. Furthermore, he highlights the diminished capacities of Yemeni ports, such as Aden Port, which has become the primary gateway for commercial imports into Yemen.
The issue of economic recovery, reconstruction in Yemen, and the establishment of sustainable peace remains one of the major issues that activists and stakeholders call for attention, contemplation, and early preparation on the government agenda by all regional and international parties.
On his part, the merchant Abdul Karim Al-Maamari points out the substantial losses incurred by traders and importers as a result of the delays in the import process, the rising costs, financial division crisis, and the resulting complexities in opening documentary credits for importers. The duplication of taxes with multiple collection points in areas controlled by the main warring parties has pushed many importers to focus on a specific number of goods for import from abroad. They are also seeking alternative import options that are equally challenging, in order to meet the needs of local markets to the extent possible.
Consequently, numerous enterprises and factories have been compelled to curtail operating hours and enact substantial workforce reductions. Trade constraints have significantly impeded the ability of affected industrial entities to procure essential raw materials and spare parts. Furthermore, the relentless targeting of crucial infrastructure elements throughout the country, including the incessant aerial bombardment of roads and bridges, has inflicted profound losses and damages upon the private sector.
Multiple Losses
The ongoing war in Yemen for the past seven years has resulted in massive destruction and significant losses in infrastructure and economic development, leading to increased poverty rates, soaring unemployment, and triggering the world's largest humanitarian crisis according to the United Nations classification. The losses from the destruction of infrastructure amount to tens of billions of dollars, as outlined in a report issued by the Economic Studies and Forecasts Sector at the Ministry of Planning and International Cooperation, totaling around $98 billion.
The possibility of recovery?
Economics professor at Sana'a University, Dr. Ahmed Kalib, indicates that the cost of the damages inflicted on Yemen's infrastructure and economy surpasses Yemen's capacity for recovery, reconstruction, and normalization of public life. He adds that the war has disrupted most production sectors, significantly impacting the GDP and per capita income, leading to food security collapse and an expansion of hunger.
The issue of economic recovery, reconstruction in Yemen, and the establishment of sustainable peace remains a major concern that activists and stakeholders call for attention, contemplation, and early planning on the government agenda by all regional and international parties. They believe that it cannot be delayed, especially concerning vital sectors as they are intertwined with the destinies and lives of individuals in the community, their future sustainability, livelihoods, and economy, in addition to the future of the Yemeni state as a whole.
According to the assessment of damages and needs (Phase Three) carried out by the World Bank, in collaboration and coordination with the internationally recognized government represented by the Ministry of Planning and International Cooperation, the cost of damages in 12 sectors in 16 cities covered by the assessment ranged from $6.9 billion (low estimate) to $8.5 billion as of January 2020. The cost of reconstruction and recovery needs for those sectors ranges between $20 billion and $25 billion.
It is worth noting that the previous assessment of the extent of damages and needs remains partial and incomplete, as a comprehensive assessment requires evaluating the damages for all economic sectors across all cities and urban and rural areas whose infrastructure and facilities have been affected. It also requires covering the extended timeframe from the beginning of the conflict until the moment of exit, in addition to quantifying the extent of damages and losses in the facilities.
Furthermore, calculating the cost of damages for the overall economic, social, humanitarian, and institutional repercussions on the short, medium, and long term is essential. It is likely that the extent of damages and costs incurred by the Yemeni economy could be multiples of those estimates if we take these considerations into account in the assessment and estimation process.
The war that Yemen has been experiencing for the past seven years has caused significant damage to the Yemeni economy. With its continuation from year to year, the economic and living conditions worsen and become more complex. The issue of Yemen's economic recovery is dependent on the extent of interest from regional and international parties in Yemen, as well as the adoption of a strategy to emerge from the state of war that Yemen has been experiencing for years.
*This article was produced as a component of a training initiative that engaged journalists from Syria, Gaza, and Yemen. The program was organized by "Awam" and received support from the International Media Support organization.
