ABHA: Yemeni Finance Minister Mansour Alqaiiti has said that the Yemeni economy is on the verge of collapse and is unable to meet its international obligations. He explained that when the Houthis entered Sana in September 2014, Yemen had $5.2 billion in reserve, however, now its Central Bank has only $1 billion remaining.
Alqaiiti said that the Yemeni Central Bank is suffering due to monthly withdrawals from the Houthis, estimated at around 25 billion Yemeni riyals, or $100 million. He said that the coffers of the Central Bank's branches in Aden and in some other provinces are empty.
The now-diminished reserves were mostly used abroad to meet some of the country’s oil needs last year, while some of the reserves have also been used to pay for certain commodities like wheat, rice and sugar.
He said that the Houthis have exploited the difficult economic situation and have indulged in corruption, selling these commodities to the people at inflated prices.
Additionally, the Houthi’s appointment of unqualified supporters to key positions in the Finance Ministry has had a significant effect on the country’s budget as well as on the administration as a whole. These decisions, especially in the finance and banking sectors, have reflected poorly on the country’s fiscal indicators, suggesting that the economy is on the verge of collapse due to lack of funds.
He added that all of the state apparatuses are under Houthi control, including the financial sectors and IT systems, which is enabling them to continue their work at this time. Given that they control the Central Bank and the Finance Ministry, they are able to continue spending as they like, and can continue to pay youths to fight for them in exchange for salaries.
Because of this, the national currency has plummeted, forcing the cost of living to go up, while the overall economic balance continues to decline.
Alqaiiti added that in the liberated areas administered by the government, the available resources are used to cover the obligations in the civil and military sectors. However, the situation is difficult because the money in the Central Bank and its branches remain under Houthi control. Nonetheless, the government is doing what it can to cover its own expenses through customs, tax and financial resources to pay state employees.
Alqaiiti pointed out the Central Bank was already facing a crisis prior to the overthrow due to the implementation of poor financial policies. Today, this means that the bank remains unable to meet its obligations toward other commercial institutions and is also unable to offer financial liquidity, locally.
Yemen’s former president, Ali Abdullah Saleh, continues to play a strong role in the Yemeni economy despite facing charges internationally. He has significant funding inside and outside the country, and recent information suggests he is using his own funds to finance the Houthi war effort.
Alqaiiti said that the Yemeni Central Bank is suffering due to monthly withdrawals from the Houthis, estimated at around 25 billion Yemeni riyals, or $100 million. He said that the coffers of the Central Bank's branches in Aden and in some other provinces are empty.
The now-diminished reserves were mostly used abroad to meet some of the country’s oil needs last year, while some of the reserves have also been used to pay for certain commodities like wheat, rice and sugar.
He said that the Houthis have exploited the difficult economic situation and have indulged in corruption, selling these commodities to the people at inflated prices.
Additionally, the Houthi’s appointment of unqualified supporters to key positions in the Finance Ministry has had a significant effect on the country’s budget as well as on the administration as a whole. These decisions, especially in the finance and banking sectors, have reflected poorly on the country’s fiscal indicators, suggesting that the economy is on the verge of collapse due to lack of funds.
He added that all of the state apparatuses are under Houthi control, including the financial sectors and IT systems, which is enabling them to continue their work at this time. Given that they control the Central Bank and the Finance Ministry, they are able to continue spending as they like, and can continue to pay youths to fight for them in exchange for salaries.
Because of this, the national currency has plummeted, forcing the cost of living to go up, while the overall economic balance continues to decline.
Alqaiiti added that in the liberated areas administered by the government, the available resources are used to cover the obligations in the civil and military sectors. However, the situation is difficult because the money in the Central Bank and its branches remain under Houthi control. Nonetheless, the government is doing what it can to cover its own expenses through customs, tax and financial resources to pay state employees.
Alqaiiti pointed out the Central Bank was already facing a crisis prior to the overthrow due to the implementation of poor financial policies. Today, this means that the bank remains unable to meet its obligations toward other commercial institutions and is also unable to offer financial liquidity, locally.
Yemen’s former president, Ali Abdullah Saleh, continues to play a strong role in the Yemeni economy despite facing charges internationally. He has significant funding inside and outside the country, and recent information suggests he is using his own funds to finance the Houthi war effort.
