Yemen has a heavily cash-based economy with low levels of financial inclusion. The country’s formal banking sector is highly underdeveloped, undercapitalized and concentrated in urban areas, leaving it inaccessible for most Yemenis. Plans by the Central Bank of Yemen to develop and improve electronic interbank transactions and local electronic payment systems, including mobile money services, were interrupted by the onset of the ongoing conflict. This paper examines (and provides recommendations on): the existing regulations surrounding the use of e-money in Yemen; attempts to adopt e-money services both before and during the conflict; the major players and state of infrastructure in the sector; and the challenges and prospects facing greater adoption of electronic currency in the country. 

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This White Paper addresses the impact of Saudi Arabia’s increasingly restrictive handling of its expatriate workforce on the economy in Yemen. The kingdom’s policies, which have forced tens of thousands of Yemenis to return home, have resulted in a dramatic loss of income from remittances for their families in Yemen at a time when the country is already going through a catastrophic humanitarian situation. The authors thus argue that it is incumbent upon GCC states, and Saudi Arabia in particular, to allow Yemeni expat workers an exemption from the current labor nationalization campaigns – at least until a post-conflict Yemen has attained acceptable economic growth and the issue of the repatriation of Yemeni workers can be revisited responsibly.

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This White Paper assesses the multifaceted pervasiveness of corruption in Yemen. It is demonstrated, amongst others, that patronage networks are now emerging among previously marginal or unknown figures and that the financial involvement of Saudi Arabia and the United Arab Emirates has extended patronage across national borders. It is argued that any anti-corruption agenda must aim to understand the complex configuration of patronage networks in Yemen, to be introduced gradually, and to get the buy-in of as wide a group of Yemenis as possible.

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This White Paper assesses the factors weighing on private sector development in Yemen. It lays out the impacts of the 2011 uprising in Yemen, the ensuing political crisis and the current conflict on the economy and the private sector. Following this, recommendations are offered to both the Yemeni government and international stakeholders regarding steps that can be taken to revive and develop the private sector post conflict.

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This White Paper deals with the role of local councils in Yemen and analyses their current situation. In the absence of central state authority and despite all the challenges they face, these councils remain important instruments for coordinating humanitarian relief efforts and local-level conflict mediation. Local councils are among the best-equipped and best-established institutions to support a shift away from the previous centralized model. Thus the Brief concludes that it is imperative that local, regional and international actors seek not merely to keep local governance structures from collapse but to enhance the capacities of local councils in post-conflict scenarios.

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This White Paper proposes an institutional structure for a future reconstruction process in Yemen: a permanent, independent, public reconstruction authority that empowers and coordinates the work of local reconstruction offices, established at the local level in areas affected by conflict or natural disasters. This proposal does not arise only from lessons learned from previous reconstruction efforts in Yemen, but also from the immediate need for such an institution to begin planning and implementing reconstruction work to the greatest extent possible.

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Download the Policy Brief in English or Arabic