With the end of the sixth year of the unjust war on Yemen and as the year 2020 approaches its end, hundreds of thousands of Yemenis received the new year without salaries, within deteriorating and poor living conditions that many of them can no longer afford. The infamous decision of the outgoing Hadi government in September 2016 to relocate CBY administration from the Capital, Sana’a, to the governorate of Aden, had catastrophic consequences for public sector employees. Their salaries have been suspended for four years; and they came to the fifth year without a solution to the crisis of salary interruption. However, various local and international efforts and attempts to resolve this complicated file, which has become a card in the hands of the countries of war coalition against Yemen and their mercenaries, have failed, even though the country is classified by the UN as suffering from the biggest humanitarian crisis in the world.
The negative impacts of interrupting the civil servants’ salaries in Yemen – especially in areas under the control of the National Salvation Government in Sana’a – have been extended to include the rest of society. This has resulted in the absence of many employees in the main service facilities and institutions, such as education, health, water and others, for providing basic services to citizens. It has also led to the emergence of a debt chain in society, where more than 80% of Yemenis are indebted to homeowners, shopkeepers and others. Moreover, it has had a negative impact on aggregate demand, deepening economic downturn, widening the unemployment crisis, and increasing the rate of poverty.
The ongoing war on Yemen has had severe impacts on various economic, development and service sectors in the country. This has exacerbated the current unemployment crisis to record levels, and according to the latest results of the Yemen Labor Force Survey, 44.8% of young people are neither in work nor in education. Since 2015 and until the present day, the private sector facilities have been directly damaged by the bombing of the war coalition countries, which has adversely affected workers.
Yemen Business Climate statement, carried out by the Small Enterprise Development Agency in Sana’a, Aden, Taiz, Hadramout and Hodeida, showed that 41% of establishments laid off about 55% of their employees. Furthermore, 7% of enterprises cut their employees’ salaries by about 49% and laid off about 64% of their employees. Besides, 3% of the enterprises reduced the salaries of their employees by about 57%.
The Yemeni national currency has witnessed the biggest deterioration in its history during the last few days in the southern regions controlled by Saudi-Emirati occupation. On the other hand, the Central Bank of Sana’a could maintain a state of stability in the exchange rates, with slight daily changes at an average of 600 riyals against the US dollar, and 158 riyals against the Saudi riyal. This has been accomplished through sound fiscal policies, steps and procedures, the most important of which are: withdrawing the liquidity recently printed by the bank in Aden from the market, reducing circulation of cash and paper currency, using electronic currency and electronic payment services.
The World Food Program (WFP) and FAO have confirmed that the Yemeni riyal has lost 250% of its value since the start of the war against Yemen in 2015. Besides, food prices have risen by 140%, amid reports that a ship with newly printed banknotes has arrived to the port of Mukalla.
The countries of war coalition against Yemen led by the US, KSA and the UAE continue to directly target and destroy business facilities, with a view to starve the Yemeni people and kill them through various means and methods of war. Moreover, they did not adhere to the principles, rules and provisions of international humanitarian law.
The Ministry of Finance of the National Salvation Government in Sana’a indicates that the damage to the oil sector as a result of the war resulted in the loss of the local economy by 45% of foreign exchange. Yemen Petroleum Company (YPC) confirmed that the direct and indirect losses in the service, industrial and production sectors have exceeded $10 billion. This is mainly due to the continued detention of oil derivative ships by the countries of war coalition on Yemen led by the US, KSA and the UAE.