The Collapsed Yemeni Economy and Salaries-Cut Off, Why Yemen Is a Step Away from Famine?

Yamanyoon

Employees of Yemen have lost their salaries, which has been a major cause of Yemen’s famine and the collapse of the economy, it is the inevitable consequence of the war in Yemen. More than one million and five hundred thousand employees have not been getting their salaries for more than a year.

A Yemeni employe told Al-Monitor website about his suffering in a press report, Hassan walks about one mile each day to get to his new job as a private security guard, to save on transportation costs. He barely makes $100 each month. The 42-year-old used to be a departmental director in the Ministry of Electricity and Energy, but the war has led to massive power outages in the country and he lost his job after much of the ministry’s work was halted.

“I try to provide my family with the minimum food needs with my job,” he said. “Our situation has changed since the war broke out; our salaries have been suspended for more than a year, and I am spending all my savings and selling what I can. Five months ago I left my apartment in downtown Sanaa because of accumulated rent due. I now live with my wife and child in a room at my parents’ old house.”

More than 1.2 million government employees have found themselves in a similar situation since their salaries were suspended 14 months ago.

Meanwhile, the economy in Yemen continues to go downhill. The Yemeni riyal is collapsing against the dollar and has reached its lowest level, recording 475 Yemeni riyals against the US dollar compared with 215 Yemeni riyals before the war broke out in March 2015.

According to a report by the Ministry of Planning and International Cooperation, gross domestic product dropped by 41.8% since the beginning of the war on Yemen.

Mustafa Nasser, the head of the Economic Media Center, an independent center specialized in economic studies and set up jointly with the World Bank and international organizations, talked about Yemen’s economy, “The unpaid salaries are a key reason behind the economic collapse in Yemen. If the crisis continues, millions of people will starve and economic activity will be paralyzed. Employees are the main economic and financial element in Yemen.”

The United Nations has repeatedly said that the salary halt exacerbated the economic crisis and eradicated food security, but no breakthrough has been recorded to solve the problem. In January, UN Undersecretary for Humanitarian Affairs and Emergency Relief Mark Lowcock expressed in a press statement deep concern about the deteriorating humanitarian and economic situations in Yemen.

Economist Ahmed Shamakh told the Monitor: “salaries crisis exacerbated the economic deterioration, along with the apparent lack of performance of the central bank in its tasks. “If it were not for the remittances of Yemeni immigrants in the past period, the dollar would have exceeded 750 riyals.”

Yemen has been under attack by the Saudi-led coalition since March of 2015, according to the United Nations 22.2 million are in urgent need of assistance because of the coalition.