Short-Term Economic Recommendations for Yemen

On June 5th, the Sana’a Center for Strategic Studies published a policy brief containing a series of short-term recommendations as a part of their larger “Rethinking Yemen’s Economy” initiative. The Sana’a Center based the brief on the outcomes of a recent meeting of the Development Champions Forum, a group made up of Yemeni politicians and scholars, during the World Economic Forum in Amman, Jordan. The brief emphasizes the need for a varied international approach focused on stimulating the collapsed Yemeni economy. The recommendations are divided into three categories: the food security crisis, the insecurity of the banking sector, and the absence of basic public services.

With regards to the food crisis, the “development champions” called on the international community to fulfill their aid pledges. The champions further advocated for a focus on cash-based aid as a response to high food prices and low purchasing power. Furthermore, the forum acknowledged that cash based aid is not always possible, calling for locally sourced in-kind aid where possible.

If in-kind humanitarian distribution is necessary, priority should be given to purchasing these in-kind items from local manufacturers and suppliers to ensure sustaining local job opportunities and mitigating the collapse of the Yemeni private sector.

The collapse of the Central Bank and public services have significant overlap. The lack of public revenue has left the Central Bank unable to pay the salaries of 1.2 million civil servants. This in turn has led to the collapse of Yemen’s public service, with chronic disruption to waste collection, health care, and education services. To restore public revenue and, by extension, salaries, the champions call for a rapid restoration of oil and gas production and exports, as well as the reestablishment of the Central Bank as a singular entity. Therefore, the champions call on all parties to recognize the relocation of the Central Bank to Aden. A nationally recognized and functional Central Bank will bring relative economic stability, salary payments and will begin the process of restoring formal public services.

The recommendations put forward by the Sana’a Center mirror many of the same initiatives suggested by UN Under-Secretary General for Humanitarian Affairs Stephen O’Brien in his recent testimony to the UN Security Council.