After Houthi rebels executed a coup against the government in January 2015, and marched towards Aden, absorbing the territory of the internationally-recognized President Abd-Rabbuh Mansour Hadi, the Saudi-led coalition launched a military campaign in Yemen (26 March 2015), under the declared aim of reinstating the legitimate government and protecting its southern borders. From that moment on, the conflict has escalated and fighting fronts extended, resulting in a complex war that has so far defied all efforts at peacemaking.
The internationally recognized government, based in Aden but de facto operating from Riyadh, controls the majority of the country including all southern governorates; nevertheless, nominally allied factions, as the Southern Transitional Council, do not adhere to its governance. The Houthi militias control the northern part of Yemen, including the capital Sana’a, yet they lack popular support and they have no allies after breaking the alliance and killing former President Ali Abdullah Saleh. Some northern cities (as Taiz, Al Baydha and suburbs of Hodeidah), are still contested between both sides (see this digital map for more details). The main UN-led peace process has been deadlocked after three failed rounds of talks.
The situation continues to escalate: the proliferation of armed conflicts across the country, together with Saudi-led air strikes, are considered the main drivers of the humanitarian and economic catastrophe. The imposed Saudi-led coalition’s blockade of all Yemeni ports (plus sea, land and air space) have aggravated the crisis, deteriorating basic services and livelihoods.
Consequently, after three years of conflict, Yemen’s already fragile state turned into a failed state, damaging its economy, infrastructures and disintegrated Yemeni social fabric and political structure: basic services, highways, schools, hospitals, factories were all affected by the crisis. Yemen has been announced the largest man-made humanitarian crisis with over 22.2 million people in need of humanitarian assistance, 11.3 million of which are in acute need (see 2018 Humanitarian Needs Overview).
Yemen’s dysfunctional economy has continued to collapse since the start of the conflict. This is evident in the contraction of Yemen’s gross domestic product (GDP), which shrank by 14.4% in 2017, following a loss of economic activity by about 40%. Since 2015, the private sector lost 40% of its workforce and operating hours of commercial business were reduced by almost half. Oil exports, Yemen’s most vital sector for the acquisition of foreign currency and government revenues, were halted, although oil production weakly resumed in 2016, yet it has been constantly interrupted. The banking and financial sector was severely impacted. Yemen imports 90% of its food and medicine, thus the prices of basic commodities and medicines have constantly increased, due to three factors: the depreciation of the Yemeni rial (by over 100%) restricted access to the country, plus shipment and transportation challenges affecting costs for importers. Moreover, the absence of state institutions and the current political vacuum has exacerbated food insecurity, hampering the access to basic services such as education and health.
This crisis has burdened the country with the most unaffordable bill in its history. The fragmented and ill-performing government has failed to respond to the day-to-day needs of citizens and is unable to provide basic services. For the past one year and half, salaries have been paid only in the areas controlled by the internationally-recognized government, which pays the civil service workforce (about 1.2 million people who are estimated to be the breadwinners of about 7 million people across Yemen), only very irregularly.
Prior to the current conflict, Yemen experienced a range of unsuccessful reconstruction processes in response to natural catastrophes or armed conflicts. Although international aid was delivered, Yemen had limited institutional capacity to absorb it or effectively implement reconstruction projects. The destruction of the current conflict has outweighed all Yemen’s previous damages combined.
Recovery will require massive resources to tackle grievances that the country can neither afford nor donors are willing to pledge: the imperatives for reconstruction will entail the return of basic services, reforms of the banking and financial sector and the rebuilding of the economic sector. This could help to repair Yemeni social fabric, and most of all to rebuild state institutions: these subjects need to be addressed in a comprehensive but decentralized manner, as they are all of high priority.
Designing recovery and reconstruction projects for all these issues is necessary, yet prerequisites for implementation, as the legitimacy of institutions and functioning bodies with the necessary capacities, must be in place. The current government has failed to respond to citizens’ basic needs and no longer has popular support: the issue of legitimacy is fundamental to ensure the existence of a legitimate body which citizens can hold accountable.
Moreover, (re)-building state institutions is another priority, but a challenging one, given the complex nature and implications of the conflict: long term impact is essential to enhance the effectiveness of reconstruction projects. The country lacks a consolidated central power and is run by national and local governments that don’t trust with each other. Thus, reconstruction efforts will need to adopt a decentralized approach looking at the increased divisions in the “internal geopolitics” of Yemen. Decentralization is the form Yemen should take in order to preserve the unity of the state and ensure its efficacy. The future political process must prioritize the rebuilding of state institutions. Above all, Yemen’s disintegrated social fabric has to be healed: this will contribute to face past grievances, enhancing the cohesion of a community shattered by the conflict.
The international community has already started discussions on the reconstruction and recovery process. On 7 February 2018, Yemen Development partners convened a meeting on Yemen’s recovery and reconstruction priorities in Riyadh, as part of their monthly coordination meetings. The initiative gathered about 54 representatives of international donors, GCC states and non-state institutions, included a delegation of the internationally-recognized Yemeni government to discuss economic and development issues. Previously, the World Bank opened consultations with Yemeni local actors on a draft Recovery and Reconstruction Blueprint. Saudi Arabia has recently announced the Yemen Comprehensive Humanitarian Operation (YCHO), which encompasses the rehabilitation of main roads in liberated areas controlled by the Saudi-backed government. Although this appears to be productive, the project is not part of a comprehensive reconstruction plan, but rather represents an ad hoc support in order to acquire short-term political gains.
From a local and Yemeni-owned level, Yemeni Development Champions have been engaged in relevant discussions in the framework of the Rethinking Yemen’s Economy (RYE) project, a track II initiative which aims to identify Yemen’s economic, humanitarian, social and development priorities, thus preparing for the post-conflict recovery period.
The international community still lacks the understanding of Yemeni internal dynamics and has failed to approach Yemen with a local-based and bottom-up approach. The Western political mainstream monopolized their view and the political interest of Western states (as the US and the UK) camouflaged their interventions.
With regards to needed funds for recovery projects, the current cost for Yemen’s reconstruction could exceed $80 billion, according to World Bank’s estimates (which are yet to be finalized). Yemen is a poor country and will rely on international community and regional powers, such as Saudi Arabia, to fund the reconstruction process. The rebuilding plan will always be influenced by these wealthy and powerful states: external powers operate pursuing their own interests, and these will not necessarily always be in the best interest of Yemen.
Both warring parties have few incentives to end the conflict or engage in a lasting reconstruction process: Yemen’s burgeoning war economy is the only winner so far. Among the key mechanisms of corruption facilitated by the current conflict are weapons and fuel smuggling: these add to ever-evolving financial and money laundering networks that enable to safely transfer money outside of Yemen, depriving the economy of the necessary cash liquidity.
These networks of corruption transcend the war factions, pragmatically crossing frontlines with adversaries on the ground, who are more than happy to cooperate with enemies for the sake of maximizing profits. Moreover, some of these informal smuggling groups notably extend also beyond Yemen’s borders. As a result, with so many players inside and outside Yemen reaping the financial rewards from Yemen’s war economy, there is little appetite for peace.