Since early 2015, Yemen has been almost completely dependent on three external sources to secure foreign currency inflows and stimulate economic activity: foreign humanitarian aid, Saudi financial support to the internationally recognized government, and – by far the most significant – remittances from Yemeni expatriates, most working in Saudi Arabia. All three of these foreign currency sources have dramatically declined in 2020 because of the global COVID-19 pandemic. The current acute shortage of foreign currency has profound implications for the value of Yemen’s domestic currency, and the country’s ability to finance fuel and basic commodity imports. This is likely to lead to the rapid intensification of the humanitarian crisis. This White Paper presents policy recommendations to address this situation for relevant national and international stakeholders.
The sustainability of a peace agreement in Yemen will, amongst others, depend on two critical insights: First, in a conflict that is largely over access to resources, the issues of distribution and control of those resources can make or break peace. Second, where peace agreements lack provisions that create overall economic stability, warfare can resume during the fragile implementation period. At the sixth Development Champions Forum in Amman, Jordan, from 25 to 27 January 2020, the Development Champions therefore focused on identifying urgent macroeconomic, fiscal, and monetary issues that pose a direct threat to the successful implementation of any peace agreement in Yemen. This Policy Brief summarizes their key recommendations on economic provisions that need to be included in the peace agreement.
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This White Paper explores the historic development of Yemen’s microfinance industry and its players, as well as the impacts of the ongoing conflict. This analysis is followed by recommendations that address four specific areas – capacity building, financing, program design and research – to help create a more conducive operating environment for microfinance overall. The objective is to better place the industry to achieve its socioeconomic aims in the near term and contribute to Yemen’s recovery post conflict.
This policy brief summarizes discussions regarding Yemen’s fishing industry at a ‘Rethinking Yemen’s Economy’ workshop held in al-Mukalla, Yemen, on November 26-28, 2019. The workshop participants, among them numerous stakeholders in the fishing industry from across Yemen, agreed that given the inability of the Ministry of Fish Wealth to carry out its basic institutional functions due to the ongoing conflict, it is crucial that the ministry’s executive privileges for short-term policy making and regulation be temporarily delegated to local councils and that they be empowered to regulate the industry during the conflict. The participants also identified longer-term policies for the government and international stakeholders to revitalize the industry and enhance its capabilities.
This Policy Brief summarizes discussions regarding Yemen’s human capital at a ‘Rethinking Yemen’s Economy’ workshop held in Amman, Jordan, on August 24-25, 2019. The workshop participants agreed that many of the obstacles to improving Yemen’s human capital were present prior to the current conflict. This Policy Brief thus recommends: countrywide population surveys; more funding of development projects over emergency humanitarian assistance; education reforms; and the targeting of sectors with high human capital returns. Crucially, policymakers should not wait for the end of the conflict to implement these recommendations.
This Policy Brief addresses the issue of public finances in Yemen, which have long suffered from an overdependence on energy exports, one of the lowest tax collection rates in the world, and chronic budget and balance of payments deficits. With the intensification of the conflict in 2015, energy exports and foreign grants were frozen, while general economic and state collapse saw a precipitous decline in tax revenues. Public debt has thus risen, while the fracturing of state institutions across frontlines has hobbled public revenue collection, as well as fiscal and monetary policy. On April 27-29, 2019, the Development Champions convened in Amman, Jordan, and brought forward recommendations for the internationally recognized Government of Yemen on necessary steps to restructure public finances. These are laid out in the full text.
This Policy Brief addresses the issue of Yemen’s bloated public sector. Amid consistently large budget deficits, the inflated public sector wage bill is fiscally unsustainable and threatens to undermine economic recovery and future stability in Yemen. Recognizing the multiple challenges of reforming the public sector, even in a stable country, the recommendations brought forward in this Policy Brief are addressed to the post-conflict government, which should: conduct an assessment to evaluate the conflict-driven growth of the public sector payroll; reduce administrative corruption through the biometric registration of all public sector workers; and develop a strategy to demobilize and reintegrate fighters into society without absorbing them into the public sector. Further recommendations in the full text.
This Policy Brief addresses the need for private sector recovery in Yemen and gives recommendations for the improvement of the overall business and investment climate. While the private sector has shown a far greater degree of resilience than the public sector and in many cases stepped in to replace government services, its situation – and that of its working force – remains challenging. The surest means of laying the foundations for private sector recovery in Yemen, and indeed recovery for the country overall, is to end the ongoing conflict and reunify public institutions and governance mechanisms. While the conflict is ongoing, however, there are still practical, realistic steps national and international stakeholders can take to support the Yemeni private sector.
This Policy Brief offers recommendations to maximize the effectiveness of governance in post-conflict Yemen – whatever the composition or structure of the government. It presents three case studies on government models previously introduced in Yemen, Tunisia and Lebanon after periods of instability. These case studies offer useful lessons on the challenges, risks and opportunities of forming transitional governments in post-conflict contexts.
This Policy Brief sheds light on the impact of the ongoing conflict in Yemen on women’s participation in the workforce. It finds that the protracted conflict has, on the one hand, pushed more women into the workforce and new labor markets, in some cases into professions previously dominated by men. On the other hand, the war has imposed new constraints on an already low women’s participation rate. The Policy Brief recommends, amongst others, that micro-economic initiatives to bring women into the workforce must be accompanied by long-term efforts to address socio-economic structures that have historically constrained women’s access to the workforce.
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.
This Policy Brief brings forward the results of in-depth discussions held by the Development Champions with the aim of developing recommendations and guidelines to ensure the reconstruction and recovery of Yemen is a comprehensive, effective process that has a long-term positive impact.
The Champions’ recommendations include measures to link immediate humanitarian interventions to Yemen’s long-term economic recovery; mechanisms to address fiscal challenges and enhance social protection; guidelines to create new jobs, rebuild infrastructure and strengthen the rule of law; and strategies to enhance local governance and local inclusion in the reconstruction process.
This Policy Brief brings forward crucial recommendations resulting out of the fourth Development Champions Forum in Amman, held in December 2018. The Development Champions recommend that the Yemeni government resumes salary payments to all civil servants working in the administrative apparatus of the state registered in the Ministry of Civil Service database of 2014 across Yemen, prioritizing payments to education and health workers. Meanwhile, Ansar Allah should allow all state revenues in areas under their control to be deposited into the accounts specified by the Central Bank of Yemen temporarily headquartered in Aden, and all parties should work toward the restoration of the Central Bank as a national institution that serves all of Yemen. The Development Champions call on regional and international donors to cover any funding gap to support the payment of salaries and pensions.
This Policy Brief outlines recommendations for the immediate priorities of the Government of Yemen, both to achieve quick wins and to prepare the ground for medium and long-term success. These recommendations are the outcomes of in-depth discussions held during the fourth Development Champions Forum convened on 8-11 December 2018 in Amman, Jordan. They are designed to offer Prime Minister Maeen Abdulmalik Saeed and his cabinet a set of practical measures to help the government build on the momentum and increased visibility it achieved in the final quarter of 2018.
This Policy Brief, which is based on a more extensive 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.
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.
This Policy Brief brings forward crucial recommendations to address Yemen’s worsening economic and humanitarian crises. These recommendations result from the third Development Champions Forum, which took place in Amman, Jordan, between 14–16 July 2018 as part of the “Rethinking Yemen’s Economy” initiative. Amongst others, the Development Champions recommend that policy makers seek to create jobs by investing in sectors that have historically been neglected in favor of oil and gas activities. This includes investing in agriculture, developing the fishing industry, expanding mining operations, and linking reconstruction efforts to the local construction sector. In the medium term, policy makers should look to new initiatives, such as constructing a free zone on the Yemen-Saudi border.
This Policy Brief, which is based on a more extensive 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.
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.
The Policy Brief 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 Policy 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.