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 Rethinking Yemen’s Economy initiative aims to contribute to peacebuilding and conflict prevention, (economic) stabilization and sustainable development in Yemen by building consensus in crucial policy areas through engaging and promoting informed Yemeni voices from all backgrounds in the public discourse on development, economy and post-conflict reconstruction in Yemen and by positively influencing local, regional and international development agendas. The project is implemented by CARPO – Center for Applied Research in Partnership with the Orient, DeepRoot Consulting and the Sana’a Center for Strategic Studies. It is funded by the European Union and the Embassy of the Kingdom of the Netherlands to Yemen.
Duration: March 2017 – February 2021
Donors: European Union, the Embassy of the Kingdom of the Netherlands to Yemen