Economic War Between Sanaa and Aden Escalates

Sheba Intelligence | 2024-06-06 01:24 PM


Yemen's Aden-based government keeps taking procedures to weaken the Ansar Allah (Houthi) group at the economic level and deepen its control of the banking sector in Yemen.

On Wednesday, the Ministry of Transport instructed Yemenia Airways to shift its revenues to its bank accounts in Aden or overseas, a move many economic experts describe as a "new blow" to the authorities in Sanaa.

The Yemeni government obligated the airline to implement the decision as of June 2024.

The Ministry of Transport justified its resolution, saying it will "distance Yemenia's activities and revenues from the control of the Houthi group, and enable the company to spend on operating and modernizing its fleet, protect the company's assets and funds."

According to the Aden-based Ministry, the authorities in Sanaa took over more than 100 million dollars, which belongs to Yemenia Airways.

Over the past few days, the Central Bank in Aden stopped transactions with six commercial banks in Houthi-controlled Sanaa and ordered all citizens and institutions in government-run provinces to hand over the old banknotes within two months.

Houthi officials consider such a move as an "aggressive and dangerous game" and they accuse Saudi Arabia and the United States of pushing the Central Bank in Aden to make such resolutions.

On Tuesday, the Houthi government in Sanaa said that the decisions of the Central Bank in Aden aim to "transfer the disastrous situation" from South Yemen to North Yemen. It argued that such decisions will have "horrendous consequences" for the living situation in the South.

Meanwhile, EU Ambassador to Yemen Gabriel Munuera Viñals, Ambassador of France Catherine Corm-Kammoun, Dutch Ambassador Jeannette Seppen and the German Ambassador Hubert Jäger concluded a joint visit to Aden on Wednesday.

The European ambassadors expressed support to Yemeni authorities in Aden in introducing reforms to improve the national economy.

A statement said, "The Ambassadors encouraged continued work to stabilize the economy, strengthen public revenues and improve expenditure management, and deliver basic services. They underscored the importance of ensuring respect for fundamental rights and a conducive operating environment for humanitarian and development actors helping Yemenis."

The Minister of Planning and International Cooperation, Waed Badib, confirmed yesterday that the economy has lost about 50 percent of its domestic product over the past years, and poverty has hit 80 percent of the population.

The national currency has lost its value by about seven hundred percent, and the humanitarian crisis has massively increased as a result of the cessation of oil production and export due to the Houthi missile and drone attacks, according to Badib.

While the economic war keeps escalating, Yemeni observers say such a matter could be a prologue to a fresh, decisive military battle.