The humanitarian consequences of Yemen's economic crisis

As Yemen’s war drags on, the country’s economic deterioration is impacting all aspects of life. Proper healthcare is increasingly scarce, government salaries are left unpaid, and prices for food supplies and fuel are fluctuating. Many Yemenis are profoundly affected by even the slightest price increases, as most citizens struggle to afford basic supplies. In a recent analysis for IRIN, Mohammed Ali Kalfood explains why Yemen’s economy--possibly the most underreported side of the country’s 15-month war--is in fact critically important to understanding the extent of damage that the conflict has inflicted.

Kalfood writes that monetary policy and central banking have become normal topics of conversation among Yemenis, as decisions made by the Central Bank of Yemen may determine whether, for example, a cab driver can afford to buy gas for his car, or if an individual has access to simple but life-saving medical treatments.

The central bank’s foreign reserves are running critically low, causing the value of Yemen’s rial to drop. Because of the unstable economic situation, food importers are not granted the loans necessary to bring in supplies. The short supply of grains and other imports have caused their prices to increase by as much as 50% over the past few months.

Despite the dire circumstances, Yemen’s central bank and its governor Mohammed bin Humam have done their best to keep the currency stable and to stay neutral in the midst of a difficult economic, social, and security situation. But these efforts can only go so far while the war continues to impair all sections of Yemen’s society.

The best that could happen is that the conflict parties find a way to a durable peace agreement, and all stakeholders could work together to stabilise and reconstruct Yemen,” -Marwa al-Nasaa, resident representative for the International Monetary Fund in Yemen

Among the most disastrous consequences of the war and economic crisis is Yemen’s failing healthcare system. Karine Kleijer of Médecins Sans Frontières says that basic programs, like vaccinations, have ceased to work due to lack of supplies. There is also the threat that doctors and nurses will go without pay, possible leading to the closure of more clinics.

It is unlikely that Yemen’s economy will see an upturn as long as the war continues. Only once parties to the conflict reach a solution can Yemen work towards stabilizing its currency and renewing imports. Until then, daily life for most Yemenis will remain an uncertainty.