The cost of living crisis, Yemen style
Summary: the truce has stopped the fighting but the situation for
the vast majority of Yemenis after more than seven years of war
continues to worsen.
We thank Helen Lackner for today’s article. She has worked in Yemen
since the 1970s and lived there for nearly 15 years, and writes about
the country’s political, social and economic issues. Helen works as a
freelance rural development consultant and is a visiting fellow at the
European Council for Foreign Relations. She is the author of Yemen in Crisis, the Road to War
published by Verso, a seminal study of the current war and what lies
behind it; a revised edition with additional material is coming out
shortly. On 15 July Routledge published her new study Yemen: Poverty and Conflict. Here’s how to purchase
the book and secure a 20% publisher discount. Helen’s most recent Arab
Digest podcast ‘Yemen, a ceasefire and reason to hope’ is available here.
Yemenis have just celebrated their first Eid al Adha without major
fighting since 2015. This has certainly made it a more pleasant and
relaxed event than in recent years thanks to the truce due to expire on 2
August. Throughout these years, their living conditions have severely
deteriorated from an already low base: 49% of Yemenis lived below the
poverty line in 2014, rising to well over 80% by 2020. Since then,
other than the positive development of the truce, the news is bad.
Yemenis have suffered a largely uncontrolled Covid epidemic, with the
lowest vaccinations rate in the world (2%), floods and droughts
emphasising the disastrous impact of climate change on poor countries,
further collapse of the economy and a divided financial system. To cap
it all, in recent months the Ukraine-Russia crisis has both vastly
increased fuel prices and threatens shortages of the main staple, wheat:
the country depends on imports for 90% of its wheat supplies and 45% of
this comes from Russia and Ukraine. So what does the ’cost of living’
crisis mean for Yemenis?
First it is important to realise that, in Yemen as elsewhere, the
situation differs depending on who and where you are. For the small
minority of war profiteers and the few well-paid staff of international
and some national agencies, the impact is low; they can afford the
rising prices and hire others to queue on their behalf at fuel stations
or for gas canisters. For the majority, the situation is dire, but also
varies in different parts of the country, mostly but not exclusively
according to who controls the area.
For the first time in years, people don’t have to worry about
airstrikes or fighting along the major fronts; some roads which were
impassable for military reasons have now re-opened. But the multiplicity
of check-points make travel both expensive and problematic particularly
for ‘northerners’ travelling to Aden and other southern governorates,
something which remains essential for most international travel and
other activities despite the few civilian flights now leaving from
Sana’a.
While the irregularly received monthly income of a teacher or medical
staff is about YR 50,000, the per capita minimum food basked cost YR
9000 in Houthi controlled areas and YR 15,000 elsewhere. Given that the
average household includes about 7 people, normal people’s incomes,
everywhere in Yemen, are significantly below what is needed for basic
survival. A sheep suitable for slaughtering for Eid this year cost
upwards of YR 120,000.
Overall, prices in IRG controlled areas are double those in Houthi
areas because of the IRG’s transfer of the Central Bank of Yemen (CBY)
to Aden in September 2016, worsening the financial crisis. While
exchange rates are important everywhere, in a country which imports
about 80% of its basic necessities their importance is overwhelming. The
Houthis forbid use of new notes printed for the IRG in their part of
the country, so the US dollar is worth about YR 600 there by contrast
with YR 1700 per US dollar in January 2022 in IRG areas. The
Saudi-Emirati promise in April of a contribution of US$ 2 billion to the
Aden-based CBY led to a temporary improvement, but this is waning as
the prospects of these funds arriving becomes increasingly remote; in mid-July the rate was YR 1200 to the dollar.
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