The ‘American’ economic war against Yemen

Abdel Qader Osman, The Cradle, September 28, 2023 —

While a fragile ceasefire exists between the Saudi-led coalition and Ansarallah-allied forces, Yemen remains subjected to severe economic warfare, designed, backed, and orchestrated entirely by western powers.

The UN-brokered truce between Sanaa and Riyadh, which was announced in April 2022 and technically expired in October, has plunged Yemen into a neither-peace-nor-war purgatory. Not only did the truce utterly fail to relieve the country’s dire economic crisis caused by the US/UK-backed Saudi and Emirati aggression, but it also exacerbated the crisis to a degree not witnessed in years.

The military option for resolving the conflict has long expired; In recent years, as the war shifted in favor of the Yemeni army and Ansarallah-backed popular committees, a balance of deterrence was struck deep within Saudi territory, forcing foreign coalition forces into a military ceasefire. At a dead-end, they instead scaled up economic pressure on Yemenis in an attempt to turn the population against the Sanaa government led by Ansarallah.

Auctioning Yemen to the highest bidder

It is within this alarming backdrop that Yemen’s foreign occupiers began the illegitimate process of selling off the country’s assets. The Saudi-aligned Yemeni government faction recently sold 70 percent of the Yemeni telecommunications company Aden Net to an Emirati enterprise called UAE NX Digital Technology. This unconstitutional move was justified by the UN-recognized government as a joint investment agreement following the failure of local institutions to generate returns for the state treasury.

The deal sparked angry reactions and exposed the impotence of Prime Minister Maeen Abdul Malik’s government in the face of Saudi demands and diktats. That government has been enabling foreign aggressors to incrementally exert more control over Yemen, its resources, and assets, and further exploit its people.

Regrettably, this sale of Yemeni national sovereignty to coalition countries was not the first of its kind. The government-in-exile, which controls the natural resources in the oil- and gas-rich governorates of southern and eastern Yemen, had already ceded Yemeni assets and revenues to various foreign states and businesses in exchange for regular financial support.

US economic warfare

Ibrahim al-Saraji, spokesman for the Supreme Economic Committee in Sanaa, provides some background on how Yemen reached this unfortunate juncture. “After the mid-2016 Kuwaiti negotiations over prisoners of war, until this very moment today, we can see that the Americans are the ones who led the war and the economic siege of Yemen.” 

“In those negotiations, the US ambassador openly threatened our national delegation that if we didn’t accept the coalition demands, they would target the (Yemeni) rial so that it would not be worth the paper it was printed on. After that, with no legal authority, a decision was made to transfer Yemen’s Sanaa-based Central Bank to Aden and print the national currency there.”

Since its 1973 military failure in the Vietnam war, Washington has widely applied a policy of economic warfare, that includes sanctions, blockades, and sieges to bring into line countries that challenge the unipolar order based on US rules. This policy has silently destroyed the economies of targeted countries, causing extreme currency depreciation, financial collapse, economic underdevelopment, and, in some cases, catastrophic humanitarian crises – the worst of which, according to the United Nations, is in Yemen and affects 20 million civilians.

Events over the past eight years underscore the key role played by western financial powers like the US and Britain in planning and orchestrating crippling economic warfare in Yemen. Their objective appears to be to gain control over the resource-rich areas in southern Yemen while exploiting the humanitarian crisis as leverage against Sanaa.

Three years after the war started, in November 2018, UNICEF reported that approximately 2.2 million Yemeni children were already suffering from malnutrition, with 400,000 of them experiencing acute malnourishment. By the end of 2022, this dire situation had escalated dramatically, with 11 million children now affected, including 540,000 children under the age of five facing severe malnutrition. According to data from the World Bank Group in March, foreign aggression against Yemen has driven up the nation’s poverty rate to a staggering 78 percent – more than three-quarters of its population.

Despite these alarming statistics, the UN World Food Program (WFP) has recently cut food aid to Yemen, leaving approximately 3 million people in the north and 1.4 million in the south without access to the food assistance they desperately need to stave off malnutrition.

The authorities in Sanaa view starvation as yet another tool of foreign political manipulation, and have accused the organization of diverting aid originally intended for Yemen to Ukraine. Mohammed Ali al-Houthi, a member of the Supreme Political Council, voiced these concerns during a meeting with the Regional Director of the WFP (for West Asia and North Africa) Corinne Fleischer. 

Shortly after, he tweeted: “The program’s decision to reduce the aid allocated to Yemen resulted from the fact that it was transferring it to Ukraine at the request of the United States.”

Yemeni livelihoods under fire 

Yemeni economist Rashid al-Haddad tells The Cradle that manipulating the human condition to gain political concessions is par for the course for Washington:  

“The US often throws around its diplomatic weight to thwart efforts that could lead to peace – and exploits the humanitarian file to achieve a breakthrough.” 

The news isn’t all bad. Haddad points out that “despite the humanitarian repercussions of the foreign aggression on Sanaa and the free governorates, and the decline in the rate of household income as a result of the war and blockade, the National Salvation Government [NSG] has been able to a large extent to control the economic situation.”  

Ironically, Yemeni provinces specifically under foreign coalition control, are experiencing “economic inflation that has risen to over 450 percent since 2015 because of the collapse of the currency exchange rate.”  These regions also grapple with an ongoing state of insecurity because of clashes between the various domestic factions – each backed by a different foreign patron – which in turn exacerbates the living conditions and repels growth and investment. 

Despite these sometimes stark disparities between the Ansarallah-led and the foreign coalition zones, all Yemenis share common hardships: skyrocketing prices for essential goods, a devalued currency (with the exchange rate at 1500 riyals to the dollar in coalition areas and 535 riyals to the dollar in NSG-controlled areas); financial liquidity shortages; stagnant business activity; a scarcity of oil derivatives; and a collapsing healthcare sector.

In his speech last month, Ansarallah leader Abdul Malik al-Houthi drew attention to these worsening conditions in provinces controlled by Saudi Arabia and the UAE, accusing them and other coalition partners of pursuing “hostile policies at the level of targeting the national economy” to create endless suffering for Yemenis. 

Over the past eight years, the foreign war coalition has intentionally and consistently targeted commercial and public infrastructure in Ansarallah-controlled governorates. They have done so by obstructing the entry of essential materials and raw goods needed for light industries and the food sector, hampering investment initiatives, and driving up the costs of local products.

Numerous businesses have been shuttered as a result, causing a livelihood crisis for approximately three million Yemenis employed in the private sector. The situation has been further exacerbated by ongoing foreign-imposed restrictions on maritime traffic at the ports of Aden, Hodeidah, and Sanaa, as well as at Aden airports.

Sanaa’s conditions for peace 

Numerous UN-backed ceasefires have been presented under a “humanitarian” guise aimed at easing the suffering of civilians and preparing the ground for a comprehensive peace. All, however, have managed to fall short of expectations. When the most recent military ceasefire came into effect, direct negotiations between Sanaa and Riyadh resumed but have yet to yield results.

Saraji, the spokesman for the Supreme Economic Committee, tells The Cradle that Sanaa has consistently raised three key demands throughout these negotiations: the complete lifting of the siege on Yemen; the reopening of Sanaa airport to normal operations; and the payment of salaries to both civil and military state employees, pensioners, and social security beneficiaries which have been suspended since the Central Bank’s transfer from Sanaa to Aden. 

Meeting these base demands “will reflect positively on people’s lives if they are implemented,” says economist Haddad. 

But Riyadh’s reluctance to follow through on these commitments – after initially indicating its approval – has resulted in significant setbacks. The issue of unpaid employee salaries in non-coalition-controlled areas, which has gone unresolved for years, has bizarrely been blamed on Ansarallah by the coalition’s own media. This, despite the fact that the coalition controls ports, airports, natural resources, and hence, Yemen’s national revenues – the only means by which to pay public salaries.

The media allegations against Ansarallah were seen as an attempt by the coalition enemy to divide national ranks, as noted by President Mahdi al-Mashat, head of the Supreme Political Council, who pledged to provide employee salaries even if this requires military action.

Both Saraji and Haddad concur on the role of the US envoy to Yemen, Tim Lenderking, in obstructing the resolution of the salary issue and pressuring Riyadh not to meet these basic demands. 

Lenderking appears to believe that the payment of state employee salaries would constitute a significant defeat for the United States and coalition countries, effectively ceding a big part of their leverage over Yemeni matters. 

Saraji also points out that “the Americans are the first to put forward the idea of splitting salaries and only paying certain public sectors,” a divide-and-rule tactic which could turn public employees against each other.

Mediators, not meddlers 

The latest round of Omani-mediated negotiations between Sanaa and Riyadh saw Ansarallah’s top negotiator going to Riyadh for the first time for direct talks with Saudi Defense Minister Khalid bin Salman, brother of Crown Prince Mohammad bin Salman. Observers consider this round of talks – aimed at reaching a permanent solution, ending the war, and addressing post-war issues – to potentially be the last, having witnessed indications of goodwill from both sides. 

US Secretary of State Antony Blinken, unhelpfully ignores these “firsts” and pretends that the negotiations are inter-Yemeni ones, with the US and Saudi Arabia playing a mediator role as opposed to being actual responsible parties to the war.

As peace talks drag on, Yemeni patience is wearing thin and their optimism remains dim. The specter of renewed military confrontation still looms large. The interests of foreign and regional coalition partners diverge in many respects, so a peace settlement does not merely depend on two sides, but many. If disruptive external powers refrain from interference, those chances rise, but that likelihood is nil.

If all else fails, peace-seeking Yemenis may solicit the involvement of trusted mediators with a proven track record – akin to China’s role in facilitating historic talks between Saudi Arabia and Iran – to quietly broker a deal that excludes the US and other foreign stakeholders.

Leave a Reply

Your email address will not be published. Required fields are marked *