What does the conflict- induced public sector crisis mean for food security in Yemen?
The conflict-induced crisis in Yemen has been devastating for the country, aggravating an already deteriorating economic performance. GDP dropped by 34.6 percent between 2014 and 2015. The public budget deficit almost doubled between the first half of 2015 and the first half of 2016. The currency exchange rate in the parallel market has been fluctuating and diverging from the official rate (YER250/ US$), reaching a record high of YER315/US$ in September 2016.
Since late July 2016, the Central Bank of Yemen (CBY) has suspended public budget expenditures and domestic debt service. As a consequence civil servants, who represent 31 percent of the workforce in the country, have experienced irregular salary payments or complete salary cuts. The entire social protection system has collapsed, with a suspension of safety nets to 1.5 million beneficiaries through the Social Welfare Fund since the beginning of the crisis in 2015.
The conflict-driven public sector crisis in Yemen is now escalating. The decision of President Hadi on 19 September to move the CBY from Sana’a to Aden has created a host of uncertainties. The possible breakdown of the banking system and an inability to pay salaries would accelerate economic collapse and could tip large parts of the country into extreme food insecurity.
WFP estimates that the depth of hunger among the Yemeni population, measured by the aggregated household food energy consumption deficit, is almost double that of the pre-crisis period, pushing those who were already food insecure into a severe level of food insecurity. The current worsening of the crisis might triple the depth of hunger, leaving the population in need of twice as much food assistance as in May 2016. The food-insecure population is increasing as the situation deteriorates, and in the worst-case scenario, it is forecasted to reach 21 million people.